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One of the most tax-friendly states in the US is South Dakota, and Wyoming. These states levy no corporate or personal income tax on their residents.
These decisions ultimately depend on individuals' needs and desires. However, only considering the no income tax factor before choosing a state is not enough; you have to look beyond it. States with no income tax usually impose higher other taxes, such as sales tax, property tax, or the excise tax. Hence, it is essential to look at the overall tax framework of the state.
Hawaii has the lowest property tax rate with an average of 0.3%. States like Louisiana and Alabama also join Hawaii as states with the lowest property taxes.
Florida has a higher sales tax rate, which usually offsets the lack of income tax revenue deficit.
Taxpayers can use the exclusion, atc deduction, and tax credit that are a legitimate part of the tax code. This helps avoid paying the income tax at a certain level.
By Sanskriti Saxena |Last Updated: December 22, 2025
