List of the Most Tax-Friendly States

Personal finance site Kiplinger just released its list of the most and the least tax-friendly states in America. To determine how big of a tax bite each state would take out of your hard-earned cash, Kiplinger used a hypothetical couple with two kids and $150,000 in income a year plus $10,000 in dividend income, and then looked at their income, property and sales tax burden.

Some of the most tax-friendly states don’t have income tax including Wyoming, Nevada and Florida. Tennessee has income tax but it only applies to interest and dividends and doesn’t apply to salaries and wages.

The 10 most tax-friendly states:

1. Wyoming
2. Nevada
3. Tennessee
4. Florida
5. Alaska
6. Washington
7. South Dakota
8. North Dakota
9. Arizona
10. New Hampshire

As for the least-tax friendly states, Illinois took the No. 1 spot on the list due to their very high property taxes. Both Connecticut and New York, which have pretty high income taxes, are next on the list. Surprisingly California didn’t crack the top 10 least-friendly tax states due to Kiplinger’s calculation method.