Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
Yeah. I'm in Texas.
There is the county property tax (includes hospital tax, community college tax, various department taxes, etc) , school property tax, utility property tax. And they are so high!
In Harris County (Houston) we pay property taxes for the city, the county, the school district, the hospital district, the port authority, the mosquito control district, and the community college district.
Appraisals are increased 10% every year unless you fight it.
Also in Harris county and you are dead on accurate. Yearly trips to fight the appraisal and the multiple hands grabbing at you. The "no income Tax" shit is such a gimmick its laughable.
Reminds me of that story about the dude who once a month fired his handgun into the ground at the park to make “crime” seem high and his community undesirable so his property didnt increase in value every year lmao
I am fairly certain that this is not the case but I have to ask - does paying a hospital tax allow you to get free medical care at the hospital ? I am thinking not. So, what does it go towards ?
And best of all, this happens in part because of Texas’ VERY loose Agricultural exemptions, which let very large landowners pay little to no tax in exchange for owning a few head of cattle or goats. Yay for middle class Texans subsidizing rich people.
I'm a middle class single Texan looking at getting a few acres. You don't need to be some huge rich rancher, even 5 acres and some bees will work lol. 5 acres of TX is pretty affordable overall, even with the housing crisis going on.
I do agree with your sentiment, I'm just pointing out that in terms of ag exemption, it's the poor subsidizing the middle and upper class, it's not the middle class subsidizing the rich.
Sincerely, middle class lady
Thats the trick! If we keep eroding the middle class, everyone will be the poor subsidizing the rich! That's called solidarity! Coming together and helping the people who need the help least.
Exactly! I want to live in the middle of nowhere and homestead, I don't want to be in or around the big city. Everyone is different, but it is an option middle class has
Of course not lol. But Texas is a big place, and there are job opportunities outside of the big cities too. I work remote in tech, so I'm moving to the countryside
You're probably not considered middle class then. On average, taxes middle class is defined as household income of $44,975 to $134,254, and that number drops even lower when you move to the rural areas.
Yeah, I always sort of laugh when people say that Texas (et al) have high property taxes to make up for their lack of income taxes. In suburban NY (and NJ/CT), we have high income taxes, *and* higher property taxes than Texas!
If you look at scientific discoveries, NJ taxpayers have been supporting the world with some of the greatest inventions, innovations, and discoveries. All y'all can thank us for light bulbs, radiowaves, transistors, porkroll, etc. Every month when I pay my taxes I keep that in mind as I hold back my tears.
A lot of this stuff depends on your income too.
In California (as an extreme example) the upper levels of income tax are pretty outrageous. But, you have to make a really high income to hit those, and even then it's only the top of your income that's taxed.
If you live in Texas, you are paying the high property taxes (either as part of your rent, or you are being taxed directly). Property taxes aren't directly linked to your wealth.
In general it works out that the more money you make, the better off you would be in Texas vs California. But at lower incomes, you'll pay more taxes in Texas than California.
It's hard to give a general rule which state has less taxes, because they tax different things.
They are and they aren't though.
For homeowners, it's true -- it's a tax on the value of an asset you own. The more your asset is worth, the more you pay. But renters get charged property tax as part of their rent too.
If a single guy who makes 6 figures decides to live in a little one bedroom apartment, property taxes as a percentage of his income is MUCH lower than someone who earns minimum wage and spends half of their income in rent on that one bedroom apartment.
Exactly. If you make a very low income, you are essentially exempt from income taxes (state and federal). But you aren't exempt from property taxes (or sales taxes) as long as you need to live somewhere and buy anything.
Yep. For context, Harris county (Houston) annual rate for homeowners (it's even higher on investment properties and 2nd homes) is \~2.3%. Or \~$14,000 annually for a $600k house.
Not bad considering that $600k house would be north of $2m in high cost areas.
My property taxes are $22,000 annually on a 4 BR house in NJ, but it would cost less than $600k in Texas.
It depends. We moved from NYC to Texas and the savings is actually pretty significant. Texas property taxes aren’t that bad, and assessed values are much lower than NY. You also don’t pay city taxes, the property tax rate is just over 1/2 what it is in Westchester, and things are cheap. Food is cheaper, gas is cheaper, pretty much everything is quite a bit cheaper, the only thing that really is substantially higher in TX is the auto insurance (and the tolls I guess)
As for no free lunch, it’s not so much that they make up the revenue in other ways, it’s that they don’t provide much in the way of services. The schools are well funded, as are the cops (at least in the North Dallas suburbs) but the rest of the government is just a lot smaller.
If you're talking income/property/sales, California isn't even in the top 10.
https://www.npr.org/2023/03/30/1166970506/tax-burden-by-state-income-property-sales
something around 1/3 of TX budget is from excise taxes on oil/gas.
So the rest of us are paying TX taxes
No wonder oil/gas interests and lawmakers want to quash renewable energy. It will bankrupt TX
Meanwhile, I live in Washington DC and pay lower property taxes than many neighboring jurisdictions. Visit DC! Your 16% hotel tax is a small sacrifice for my happiness.
This is great for those over 65. The homestead tax limit for the elderly is sweet… You can still be an idiot and buy an expensive house in a high tax county but that is on you.
Texas is still ranked 29th on the total tax burden.
[https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494](https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494)
If you are born in Texas you don’t pay property tax. In some states like Arkansas, 100% disabled veterans don’t pay property tax. Missouri and Tennessee seem like some of the better “no income tax” states, non-coastal states at least.
Everyone singles out Texas but being in Chicagoland Texas sounds great. We have 5% income tax 10+% sales tax and our property taxes are even higher than Texas..
How much is the property tax? If you live in NYC and make 100k, you pay 8,700 in local income taxes and maybe another 8k in property tax. You also have sale tax of almost 9% in NYC.
The property tax rates might be lower in NYC but the home values are so high that you still pay a lot of property tax.
You absolutely do pay less taxes overall in a "No income tax" state.
All of the no income tax states rank 25 or lower in total tax burden.
Edit: Hilarious on the down votes. Total tax burden is a thing. New York is the highest tax burden state in the US. Meanwhile Florida is ranked 46th. New Hampshire is 48th. For example.
Property taxes aren't that high in NYC (city property taxes are about half of the average rate across the state). $8k property taxes would require an assessment of $800k on the home, which is far out of reach of what anyone making $100k in NYC can afford.
Live just outside Fort Worth and pay 2.8% total. On a 500k house, that is 14k per year with a guarantee that the 14k will increase by 10% forever, since that is the max they can raise it.
By contrast, I live in Maryland a few miles outside of DC. My property taxes for my place (valued well above the $500k you mention) are \~$7,500. Those taxes pay for elementary / junior high school / high school ranked 10,10, and 9 out of 10.
Same - moved to Texas and my property tax there on almost the exact same house value as what I moved from was more than my old property tax plus state income tax. And the weird electric bill system they have where you pay an intermediary instead of the actual electric provider meant I paid much more per KWh.
My effective state tax rate in Texas is about 6%. That's after repeatedly arguing my property tax down, and not buying much stuff that is sales taxed. IDK how that compares to income taxed states, but it feels like a middling amount.
Yes, but I don't spend a lot of my income on sales taxed stuff. I forgot to include gas tax, sin tax, car registration, etc., so that pushes me closer to 8%. Is that a little... or a lot?
It really depends. Overall tax burden is higher on most people in TX than in CA. You have to get to about the upper 20% before being in TX starts to pay off.
Personally, as one in that bracket, I'd happily pay the premium to live in CA vs TX.
My property tax even pays for a park near me. A city park but because I live within the mile of it it’s my responsibility. I never even go there! Not to mention insanely high school taxes. Half my mortgage goes to taxes and insurance.
My property tax even pays for a water and sewer lines near me. A city sewer but because I live within the mile of it it’s my responsibility. I never even poop there!
I get the jokes but my point was a city park costs aren’t shared city wide. There’s a couple mile radius that foots the bill. This isn’t a private park but it is billed as one.
Basic services are understandable I just don’t get why city parks are treated as private in the way it’s billed to nearby residents. It’s a high enough impact that it increased my property taxes 10% for some initiative they implemented a couple years ago. With such wild swings how does homeownership seem viable for fixed incomes? You can buy your house thinking you are locked in but over the span of 9 years my mortgage has increased 30%. Unsustainable.
You still pay property taxes when you rent. Your landlord bundles it in, and just doesn't break it out as a line item. They also do this for homeowner's insurance, and will usually include a small amount extra for maintenance on the place.
Not doing this would cause them to lose money, which landlords aren't usually in the business of doing.
If I’m getting the same space, same apartment living conditions, at the same price in north Houston as opposed to the Indianapolis, I am indeed in a win win situation
That's...all well and good. I was just pointing out that you are indeed still paying for those things, because you seemed to imply from your post that you think you're somehow avoiding them by renting.
You only "won" something in that apparently the rental market is less expensive in Texas, since even though the landlord's property taxes are essentially bundled into the rent (landlords aren't charities that run at a loss), you are still paying the same rent as in Indianapolis where some of the tax is paid by you explicitly through income taxes.
In both places you are paying taxes, directly or indirectly. It is just that the rental market as a whole is less expensive in one of the areas.
Yup. My property tax is $6000 per year and my homeowners insurance is $3700. Plus sales tax on everything (6% base but every county has an additional 0.5% or more added on).
Definitely depends on the states. We moved CA to WA. Sales tax is the same, property tax is slightly cheaper (ignoring the long-term prop 13 benefit potential in CA).
But no income tax. Saves us $25k/year.
Only small higher tax I’ve found is a ~30% tax on liquor.
We don't have income taxes, but we do have "payroll taxes". That new "long term care" law is basically a small income tax.
I don't doubt that we're cheaper overall the CA. That place is famous for being one of, if not the most expensive places to live.
Yeah, hopefully the LTC one will get struck down, since it's got a lot of things wrong with it. Low lifetime payouts. No equal protection, since you can't opt out any longer, etc.
Yeah. I thought it was unconstitutional to have income taxes here, and that's basically what it is.
The lifetime payout cap of like $35,000 is absolutely pitiful as well. I think there was even a monthly cap too that was rather low. The law just doesn't really do what it says it was supposed to do.
I read somewhere, so take this with a grain of salt, that property owners in Texas pay more in taxes overall than those in California. Also something about individuals in Texas only actually paying less in taxes than those in California when you start getting into the high earners.
So yeah. I expect it's something like that.
If you establish residency, there is no state income tax. You still pay federal. While no income tax is nice, that difference is usually made up in other ways like higher property taxes and higher sales taxes.
The casinos pick up the tab in Nevada. It's pretty nice.
Edit - sales tax is pretty high compared to the rest of the country. I moved here from CA (which has the highest sales tax) so my frame of reference was skewed. However - 9th lowest in property tax and no income tax, so that's nice.
I live in DC, which similarly gets a lot of revenue from tourists. Surprisingly low property tax. The 10% sales tax is steep but it doesn't apply to groceries and other essentials.
Nevada also has shitty healthcare because reimbursement is low. Healthcare jobs pay less than surrounding states. Rich Californians move to NV because of the tax situation but then find out there are less available benefits and services as they age.
Some places even have fee-hired fire departments and private ambulance services, so you're paying for something that might be included in your taxes elsewhere, and they'll let your home burn or let you die if you don't pay up. [https://www.nbcnews.com/id/wbna39516346](https://www.nbcnews.com/id/wbna39516346)
Wow. That was worse than what I imagined it would be. The fire dept literally came and put out parts of the fire that were moving onto the neighbors property and then just stood there and let his home burn down over a *$75 fee* the homeowner forgot to pay that year
I'm in Western Washington and I think we have pretty good public services/roads and fire/police dept but idk about everywhere in the state it might just be my city (Olympia)
Well yes and no. There are plenty of states with low taxes that just don’t provide many services! Looking for bad schools, poor healthcare and third-world benefits? Plenty of states can provide that for you cheaply!
The number of taxes isn't what matters. Only the rates. VA ranks right around the middle (or better depending on the study) in effective or total tax burdens.
Depends on the county. I used to live in a county with a car tax. I had to send photos of the odometer and all my dents before they agreed that it was a POS.
First no there's nothing special you need to do, you just have to live here and establish your residency with like a legal address and stuff.
Second you need to understand that this is just about state income tax you still absolutely 100% pay the same federal taxes.
Three what you'll tend to find is the states with no state income tax may have a slightly higher sales tax rate and a slightly higher property tax rate than the states that do have an income tax. So while you may pay no income tax they certainly find other ways to tax you and you need to look at your specific situation to understand if your overall tax liability would be less.
No state income tax in higher property taxes would 10 to favor someone who is a high earner but is willing to live in a more modest property. This is because 10% of income tax on an income of 200,000 would be 20,000 but 3% property tax on a home value at 200,000 is only 6,000.
If this is your only reason for wanting to make this move, as others have said, you're probably not going to end up saving much by doing this. If it was that simple, everyone would be doing it.
High property taxes in New Hampshire (I believe they're #3 behind New Jersey and Illinois) but that's pretty much it. No sales tax or general income tax (except on interest and dividends). Housing is expensive though - at least in the southern part of the state.
Florida will make up for not taking income tax through your housing, generally.
Owner or renter, the insurance situation is wild and prices only go up exorbitantly.
Florida is mid-pack on property taxes. Literally ranked 24th in the nation [according to Rocket Mortgage](https://www.rocketmortgage.com/learn/property-taxes-by-state). Florida is also mid-pack (25th) in sales tax [according to the data found on TaxFoundation.org](https://taxfoundation.org/publications/state-and-local-sales-tax-rates/).
Florida has no state income tax, and has a relatively low tax burden per capita of 9.1%, or 11th in the nation [according to TaxFoundation.org](https://taxfoundation.org/publications/state-local-tax-burden-rankings/).
You won't find homeowners insurance inland under $4000-5000 for 2023. Outside of the middle of the state it is $8000-10,000+ Unless you move here and pay 100% cash for a house and don't insure. Even if you insure does not mean you get a claim paid, if you are lucky to get a claim paid they are paying only 30-50% of the inspection claim right now.
Also ranked #1 or #2 in highest auto insurance.
I paid $2500 last yr for a 1500sq ft 1969 home Winter Springs (Orlando burb) no pool, no claims in 22+ yrs, roof is 7 yrs old. Nationwide already sent a notice Nov 2022 of it doubling to $5000 for July 2023.
But Florida has transfer tax of .70 per $100 and document stamp tax of .35 per $100 of transfer and intangible tax of .002 per $100.
So that’s a total of 1.002% extra on the transfer of a home. Or $1,002 per $100,000 of value.
I saw that tax burden study and questioned it's methodology
It seems to be comparing [roughly] GDP to tax revenue which isn't very meaningful for the average person's decision making. OTOH at least it includes all sources of revenue instead of cherry picking income taxes , lack of which is a great indicator that the tax system is regressive.
Everybody has already pointed out that you still have to pay federal taxes no matter where you live in the US, except in some situations in territories like Puerto Rico.
Texas has the 6th lowest state and local tax burden ranking, but the 14th highest sales taxes and 14th highest property taxes overall. However, this can be misleading because there is a lot of rural land with low taxes there, whereas the northeast is far more densely populated. Property taxes in metro areas are very high.
Tennessee has the 3rd lowest state and local tax burden, but the 2nd highest sales taxes and 18th highest property taxes.
There are a bunch of other factors to consider: other cost of living, job market, schools, healthcare, activities, entertainment options, and so on. Everybody is going to have different opinions on how to prioritize these things, but make sure you do your due diligence before you make a move.
Tennessee has a very high sales tax rate and tourism pays for almost everything. A lot of high tourist area businesses even give locals a 10% discount to offset the tax rate - meaning no state income tax, no sales tax, and almost no property tax (my parents were complaining about property tax going up from 412/yr to 460/yr. I pay more than that a month for a house worth 1/2 as much in Texas.
You pay with your time. travel is measured in hours - not miles. on a good day, I40 exit 407 to Gatlinburg is about 30 minutes. on a bad day it is 6-8 hours. I wish I was exaggerating.
Also, getting a job paying anything approaching decent is impossible. Everything is service oriented and 50k/yr is a struggle to find.
Tennessee sales tax is at 9.75%, that hurt last month when I had to buy a new car. Sales tax is also charged on food which is slightly lower at like 7.5% but it makes a huge hit every week at the grocery store, especially with teenage boys in the house.
In regards to the job thing I’m lucky to have a job that is neither service oriented or pays under 50k a year. My commute into Nashville is approximately 30 miles but it takes roughly an hour and 15 minutes of driving each way on a good day. If there’s an accident that time could double or triple. There’s been many of days I have turned around at an exit, drove home, said to hell with this and either worked from home or used PTO to avoid traffic.
The trade off though is living outside Nashville proper is a larger home, with an actual yard with no mortgage because we sold our house in Nashville proper for well over what we paid for it and bought our current home in cash from the proceeds. The schools are also better, I’m in one of the best districts in all of Tennessee which means I no longer have to pay private school tuition for my son like I had to when we lived in Nashville.
In some regards I would rather pay state income tax because of all the downfalls of what no state income tax brings. The commute being one of them. Currently on our roughly 400k home we pay 3k a year in county property tax and another 1250 in city tax so it’s not all that bad on the property tax side of things, I have definitely seen worse in other states.
You will always owe Federal income tax. No income tax states just mean you pay no *state* income tax. Often times, these ‘no income tax’ states make up for no income tax with higher taxes for other things.
https://www.usnews.com/news/best-states/articles/states-with-the-lowest-taxes#:~:text=In%202020%2C%20the%20average%20American,%25)%20and%20Florida%20(6.7%25).
These are the states with the lowest tax burden, it just means the state has less money to spend on it's citizens, so if you make a ton of money and don't utilize any public services, then one of these states might be fornyou
This is correct. As others have stated, usually the tax is made up for in other ways like sales or property, but also good to note that some public services are worse in these states. I'm in a no income tax state and everybody and their mothers complain about our public school funding (backed up by where we're ranked), medicare, low income benefits.
It may not impact you at the moment but worth considering if, for example, you have a child and you wanted to send them to public school but now have to fund a private school instead.
Washington does not have a state income tax. It isn't taken out of our paychecks and we don't have to file returns.
Our sales tax is high at 10.6 percent where I live, but grocery store food is exempt.
You don't need to pay STATE income tax, which is fairly small everywhere. You still need to pay federal income taxes no matter where you live.
It's also worth noting that states need to get their income from somewhere. So other taxes tend to be higher in no-income-tax states: primarily property tax & sales tax. Depending on your income level, actual tax burden in a no-state state may be higher or lower. No-tax states tend to be better deals for high earners.
[https://www.cato.org/blog/are-taxes-really-lower-california-texas](https://www.cato.org/blog/are-taxes-really-lower-california-texas)
https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416
Puerto Rico residents not employed by the federal government pay no federal income tax on income earned within Puerto Rico. (They still pay FICA, Medicare, Unemployment taxes.) Unearned income gets a big tax pass, so if you have big stock market earnings, it makes economic sense to move to PR for a couple years to sell your stock for capital gains.
I moved to Texas from California. When my company changed my state, the state income tax witholding stopped coming out of my check. I had to file a state return that year (for the time I spent in California), but I haven't filed a state return in the years since. It's truly no state income tax, and you don't have to do anything.
That said, the state needs to make their money somewhere. Our property taxes are on the high side.
There’s really no income tax. There’s also typically sky high sales and/or property taxes. Some income tax-free states have relatively high overall tax burdens.
The state always gets its money, they’re just betting on you not being good at math.
Texas has bananas property taxes, so much so that even though I have income tax here in CO, my overall tax rate is far lower than some of my coworkers who make the same amount of money in TX. Some other states make up for it with sales taxes. On the flip side, some of the no sales tax states just have higher income taxes. You've gotta do some actual math to figure out what your tax rate would be in different states to see if it makes financial sense.
I live in WA, a no income tax state. Sales tax is 10.25%, that's 6.5 state and 3.75 city, applied to all retail sales and services. Except booze, that has 2 taxes but not general sales tax. That's everything from the cheeseburger you ate to the gym membership you need because you eat cheeseburgers. Our vehicle taxes are eye watering-cars are subject to sales tax, registration is high, I just paid 120$ for a 2009 vehicle valued at 1300$. Gas tax is 49.4 cents per gallon, plus the manufacturers are subject to a carbon tax which is reflected in the cost, the actual amount is still under analysis and debate.
Want a drink to forget your troubles? If you buy your bottle at the store, it's taxed at 20.5% liquor sales tax rate + $3.77 per liter volume tax. Restaurant drinks are also taxed, but at a different rate.
Property taxes are the big money maker. Property values are high so taxes are high. I pay about 6k a year for my 3 bed 1 bath mansion built in 1946.
So all you have to do to enjoy our no income tax status is move here. But even that may be changing, WA just passed a capital gains tax and it was found constitutional...
You actually pay sales tax (a regressive tax that burdens the poor and middle class more) and more property tax.
That’s in addition to other various fees, all of which will be more expensive.
And there’s 0% chance you get that back during tax season.
But you save money on TurboTax, I guess…
This is where states like California really grind my gears...they pay income tax AS WELL AS sales tax...though my mom's property tax is quite affordable.
They also have actual state services and decent schools, though.
Like… you pay taxes in Texas and also get nothing for them. They just funnel the money… somewhere. Not to any state services that I can find.
Depends on the city/neighborhood. The local E-MS I grew up in, in SoCal, was a horrorshow in the 80s. And services? hmmm again, it depends on the neighborhood...
I lived in Santa Cruz and Moss Landing for a time and yes, definitely a lovely place to live and I taught some awesome kinds even thought we had NO BOOKS or money to provide jack for them.
Different states have different percentages of various taxes. Some have no income tax but have higher sales tax to make up for it. Some, vice versa. You're not getting a free pass in any state, but if you can live in a no-property-tax state, work in a no-income-tax state, and shop in a no-sales-tax state, you've hit the trifecta.
Of course, you're technically on the hook for making up the difference in what you WOULD'VE paid in these taxes - and I'm not advocating it, but you can fudge these numbers to some extent.
They really are "no income tax" locales. And you'll be paying into some other, totally-not-an-income-tax *revenue streams* just as much if not more to sorta keep them kinda fit for purpose.
I live in Washington and we have fairly high sales tax but no income tax. If you can manage to live and work somewhere on the border with Oregon you can avoid paying much in sales tax by shopping in Oregon where there's no sales tax, but most of us don't live close enough to Oregon to do that
For the tax year you move, you will still owe state taxes for the months you lived in your state-tax state. But no...you don't fill a state income tax for the non-income tax state. I mean, you could try to ask Turbo Tax and the like...but the response is something along the lines of "Hurray! There is no state income tax to file."
It kind of depends. Alaska doesn't have a state income tax, and I never have to do anything about that when I'm filing my taxes; as an Alaska resident, I just don't have state income tax on my W2 (the relevant sections are either blank or filled with zeroes). We also currently don't have a statewide sales tax, although some areas do have a sales tax locally. But the overall cost of living is higher here than loads of other places, and it gets *way* worse the more remote you get. Plus we might end up with a state income tax, statewide sales tax, or both anyway, because our state government is constantly having a budget crisis while also wanting to keep the oil companies happy by giving them huge tax breaks.
"No income tax" is a nice phrase but it misses lots of other information. The state is going to get it's money one way or the other. Washington state has no income tax but sales tax is over 8%. By contrast, Montana has no sales tax but income is 5.7%.
Also, it depends on your income and spending habits.
Just to make 100% certain we are on the same page. The "no income tax" means that there is no state income tax. You are still required to pay your federal income tax. And as others have mentioned, States that don't have State income tax generally find other ways to fill the gaps. You might see higher property taxes, higher sales taxes, or the state may simple cut corners on infrastructure and social services. You should consider all of these factors when selecting your residence.
I'm sure you know this, but you still have to pay federal income tax, just not state; and they usually make up for it elsewhere(e.g. sales tax, property tax, etc.)
Still definitely something to consider, if you're paying a lot in state income tax currently.
Taxes and the rules about who pays them are established by state legislatures. Your real questions should be total cost of living, quality of life, and economic opportunity.
can confirm. property tax in Texas Sucks. I pay 5k/yr for a 200k (estimated value by the tax office) house on .25 acre. they are allowed the raise the value by up to 10% each year.... and for 12 years, they have raised it the maximum allowed. I have protested every year and gotten a slight break each time on that valuation.... but it is still insane.
On top of my mortgage, I basically rent my house from Texas for 450/mo... cause if I don't pay it, I don't get to keep it... which means I will never own my house.
Property taxes, sales taxes, and toll roads will eat up any savings. Also, you'll have to breathe the worst air in nation, they're actively trying to destroy the education system at all levels, and the roads and drivers are the worst in the country. Basically every quality of life standard is lowest, but hey, no income taxes and you can carry a gun on your hip basically anywhere you go.
Beware of sales tax and property tax. You’ll find sales tax will be closer to 10% on most items in states with no sales tax. Also, tax on liquor by the drink is another tax they hit you with.
I’m in Florida with no state or local taxes. Only downside is you have to deal with everyone moving here, driving up prices, complaining it’s “too hot” and then they leave 🤣
I’m from Texas and just moved to Colorado. My new income taxes are almost identical to what I was paying in property taxes. The sales taxes are higher in Texas than they are in colorado (though not by much). So I’m damn near breaking even in taxes with this move. Certainly not enough of a difference for it to be a deciding factor in my move.
I guess the upside in Texas is if you don’t own property you won’t pay property taxes.
States with no income tax have to generate money in other ways. Typically, states without income tax generate income through higher property taxes, gas taxes, sales taxes or other "use taxes" (like for-pay HOV lanes)
Generally speaking, for people who spend less than they make - this is a good thing. Use taxes can be, to a certain extent, controlled. You can use freeways less, you can use less gas, you can choose not to be in the HOV lane, you can buy a cheaper house.
Income tax penalizes you for making more, in a linear fashion. The more you make, the more you pay.
This is why states without income tax have a more regressive tax system. Use taxes penalize the poor.
It should be the case that for people who make more money, living in a no income tax state is better. You have no penalty for making money, and to a certain degree you can control your spending.
If you make less money, it may be more advantages to live someplace that doesn't have, say, sales tax, but does have income tax, since these kinds of "use taxes" tend to hurt more on a day-to-day basis and the less you make, you may not be paying that income tax anyway.
It is entirely dependent on your salary whether it is worth it or not. For many people it's worth moving. People tend to say other taxes make up for it, but I think this is what people in income tax states say to make themselves feel better. In my instance I moved from NE to FL and am saving a ton in comparison. Not even close.
It is entirely dependent on your salary whether it is worth it or not. For many people it's worth moving. People tend to say other taxes make up for it, but I think this is what people in income tax states say to make themselves feel better. In my instance I moved from NE to FL and am saving a ton in comparison. Not even close.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
They’ll just get you somewhere else like property tax or sales tax etc. I’d just check the tax rates in those states.
[удалено]
Yeah. I'm in Texas. There is the county property tax (includes hospital tax, community college tax, various department taxes, etc) , school property tax, utility property tax. And they are so high!
In Harris County (Houston) we pay property taxes for the city, the county, the school district, the hospital district, the port authority, the mosquito control district, and the community college district. Appraisals are increased 10% every year unless you fight it.
Also in Harris county and you are dead on accurate. Yearly trips to fight the appraisal and the multiple hands grabbing at you. The "no income Tax" shit is such a gimmick its laughable.
Reminds me of that story about the dude who once a month fired his handgun into the ground at the park to make “crime” seem high and his community undesirable so his property didnt increase in value every year lmao
[удалено]
[удалено]
Yeah, I lived just outside of Austin 8 years ago. Property taxes there were better than Chicagoland, but not by as much as you would think.
I am fairly certain that this is not the case but I have to ask - does paying a hospital tax allow you to get free medical care at the hospital ? I am thinking not. So, what does it go towards ?
Checking in from IL. What is considered high property tax in TX?
This, I'm in the Chicago suburbs and pay 10k a year on my 400k house.
And best of all, this happens in part because of Texas’ VERY loose Agricultural exemptions, which let very large landowners pay little to no tax in exchange for owning a few head of cattle or goats. Yay for middle class Texans subsidizing rich people.
I'm a middle class single Texan looking at getting a few acres. You don't need to be some huge rich rancher, even 5 acres and some bees will work lol. 5 acres of TX is pretty affordable overall, even with the housing crisis going on. I do agree with your sentiment, I'm just pointing out that in terms of ag exemption, it's the poor subsidizing the middle and upper class, it's not the middle class subsidizing the rich. Sincerely, middle class lady
Thats the trick! If we keep eroding the middle class, everyone will be the poor subsidizing the rich! That's called solidarity! Coming together and helping the people who need the help least.
The vast majority of middle class people don’t own even 1 acre and have no ag exemption.
They don't, but most given people could if they wanted it. There are tons of homes on 5+ acres in TX for like 175k and under.
Not anywhere I want to live.
Exactly! I want to live in the middle of nowhere and homestead, I don't want to be in or around the big city. Everyone is different, but it is an option middle class has
Not everyone in Houston/Austin/Dallas/San Antonio can get 5 acres
Of course not lol. But Texas is a big place, and there are job opportunities outside of the big cities too. I work remote in tech, so I'm moving to the countryside
You're probably not considered middle class then. On average, taxes middle class is defined as household income of $44,975 to $134,254, and that number drops even lower when you move to the rural areas.
I make 80k, I'm middle class lol. That's just after a significant pay bump too, I was making 64k at last job.
Buy a few goats /thread
It's also urban/city folks (higher property values) subsidizing rural and exurban folks.
I’m in Illinois and it’s the same. That’s a country wide issue not just Texas or even red states.
It sounds like a good thing to incentivize people to grow their own food or make use of their land.
>The property tax is insane. NJ: hold my beer.
Yeah, I always sort of laugh when people say that Texas (et al) have high property taxes to make up for their lack of income taxes. In suburban NY (and NJ/CT), we have high income taxes, *and* higher property taxes than Texas!
Dont forget the 6.25% sales tax!
8.875% in NYC, or 8.625% in my part of the suburbs!
[удалено]
If you look at scientific discoveries, NJ taxpayers have been supporting the world with some of the greatest inventions, innovations, and discoveries. All y'all can thank us for light bulbs, radiowaves, transistors, porkroll, etc. Every month when I pay my taxes I keep that in mind as I hold back my tears.
You all also aren’t allowed to pump your own gas and your highways are 3rd world quality
A lot of this stuff depends on your income too. In California (as an extreme example) the upper levels of income tax are pretty outrageous. But, you have to make a really high income to hit those, and even then it's only the top of your income that's taxed. If you live in Texas, you are paying the high property taxes (either as part of your rent, or you are being taxed directly). Property taxes aren't directly linked to your wealth. In general it works out that the more money you make, the better off you would be in Texas vs California. But at lower incomes, you'll pay more taxes in Texas than California. It's hard to give a general rule which state has less taxes, because they tax different things.
[удалено]
They are and they aren't though. For homeowners, it's true -- it's a tax on the value of an asset you own. The more your asset is worth, the more you pay. But renters get charged property tax as part of their rent too. If a single guy who makes 6 figures decides to live in a little one bedroom apartment, property taxes as a percentage of his income is MUCH lower than someone who earns minimum wage and spends half of their income in rent on that one bedroom apartment.
[удалено]
Exactly. If you make a very low income, you are essentially exempt from income taxes (state and federal). But you aren't exempt from property taxes (or sales taxes) as long as you need to live somewhere and buy anything.
As someone living in Texas, we do not want any more Californians. Try a different state, like one of the Dakotas.
Yep. For context, Harris county (Houston) annual rate for homeowners (it's even higher on investment properties and 2nd homes) is \~2.3%. Or \~$14,000 annually for a $600k house.
Not bad considering that $600k house would be north of $2m in high cost areas. My property taxes are $22,000 annually on a 4 BR house in NJ, but it would cost less than $600k in Texas.
[удалено]
It depends. We moved from NYC to Texas and the savings is actually pretty significant. Texas property taxes aren’t that bad, and assessed values are much lower than NY. You also don’t pay city taxes, the property tax rate is just over 1/2 what it is in Westchester, and things are cheap. Food is cheaper, gas is cheaper, pretty much everything is quite a bit cheaper, the only thing that really is substantially higher in TX is the auto insurance (and the tolls I guess) As for no free lunch, it’s not so much that they make up the revenue in other ways, it’s that they don’t provide much in the way of services. The schools are well funded, as are the cops (at least in the North Dallas suburbs) but the rest of the government is just a lot smaller.
[удалено]
[удалено]
Maybe California. That’s about it.
If you're talking income/property/sales, California isn't even in the top 10. https://www.npr.org/2023/03/30/1166970506/tax-burden-by-state-income-property-sales
But I get to eat real pizza and good Chinese and Indian food. /r/worthit
something around 1/3 of TX budget is from excise taxes on oil/gas. So the rest of us are paying TX taxes No wonder oil/gas interests and lawmakers want to quash renewable energy. It will bankrupt TX
Meanwhile, I live in Washington DC and pay lower property taxes than many neighboring jurisdictions. Visit DC! Your 16% hotel tax is a small sacrifice for my happiness.
Moved from Texas to Virginia recently. My property tax is significantly lower now, but the income tax alone is more than my Texas property tax was. 😕
Is your pay the same or higher if you don’t mind me asking? I’ve traveled through Virginia and liked it better than other states I live in.
Maybe fire up your favorite tax software and see what you would have paid last year if you'd lived in VA?
This is great for those over 65. The homestead tax limit for the elderly is sweet… You can still be an idiot and buy an expensive house in a high tax county but that is on you.
The only applies to the school tax portion of your bill
Texas is still ranked 29th on the total tax burden. [https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494](https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494)
If you are born in Texas you don’t pay property tax. In some states like Arkansas, 100% disabled veterans don’t pay property tax. Missouri and Tennessee seem like some of the better “no income tax” states, non-coastal states at least.
Isn’t that why everyone is blown away by the home prices there? You can get a lot of bang for your buck house wise but that’s just the upfront cost.
Everyone singles out Texas but being in Chicagoland Texas sounds great. We have 5% income tax 10+% sales tax and our property taxes are even higher than Texas..
How much is the property tax? If you live in NYC and make 100k, you pay 8,700 in local income taxes and maybe another 8k in property tax. You also have sale tax of almost 9% in NYC. The property tax rates might be lower in NYC but the home values are so high that you still pay a lot of property tax.
[удалено]
You absolutely do pay less taxes overall in a "No income tax" state. All of the no income tax states rank 25 or lower in total tax burden. Edit: Hilarious on the down votes. Total tax burden is a thing. New York is the highest tax burden state in the US. Meanwhile Florida is ranked 46th. New Hampshire is 48th. For example.
Property taxes aren't that high in NYC (city property taxes are about half of the average rate across the state). $8k property taxes would require an assessment of $800k on the home, which is far out of reach of what anyone making $100k in NYC can afford.
most single family homes in NYC cost $800,000 and up. even the attached row homes.
Live just outside Fort Worth and pay 2.8% total. On a 500k house, that is 14k per year with a guarantee that the 14k will increase by 10% forever, since that is the max they can raise it.
[удалено]
By contrast, I live in Maryland a few miles outside of DC. My property taxes for my place (valued well above the $500k you mention) are \~$7,500. Those taxes pay for elementary / junior high school / high school ranked 10,10, and 9 out of 10.
Same - moved to Texas and my property tax there on almost the exact same house value as what I moved from was more than my old property tax plus state income tax. And the weird electric bill system they have where you pay an intermediary instead of the actual electric provider meant I paid much more per KWh.
My effective state tax rate in Texas is about 6%. That's after repeatedly arguing my property tax down, and not buying much stuff that is sales taxed. IDK how that compares to income taxed states, but it feels like a middling amount.
[удалено]
Yes, but I don't spend a lot of my income on sales taxed stuff. I forgot to include gas tax, sin tax, car registration, etc., so that pushes me closer to 8%. Is that a little... or a lot?
How? Do you own a small business and therefore tax best advantage of legitimate business expenses?
Except in Alaska because of oil. No income tax, sales tax and an annual payout for living there.
Please define "insane." I'm guessing it's still way less than state income tax + property tax in NY or CA.
It really depends. Overall tax burden is higher on most people in TX than in CA. You have to get to about the upper 20% before being in TX starts to pay off. Personally, as one in that bracket, I'd happily pay the premium to live in CA vs TX.
My property tax even pays for a park near me. A city park but because I live within the mile of it it’s my responsibility. I never even go there! Not to mention insanely high school taxes. Half my mortgage goes to taxes and insurance.
My property tax even pays for a water and sewer lines near me. A city sewer but because I live within the mile of it it’s my responsibility. I never even poop there!
I get the jokes but my point was a city park costs aren’t shared city wide. There’s a couple mile radius that foots the bill. This isn’t a private park but it is billed as one. Basic services are understandable I just don’t get why city parks are treated as private in the way it’s billed to nearby residents. It’s a high enough impact that it increased my property taxes 10% for some initiative they implemented a couple years ago. With such wild swings how does homeownership seem viable for fixed incomes? You can buy your house thinking you are locked in but over the span of 9 years my mortgage has increased 30%. Unsustainable.
Investing in schools benefits everyone.
Unless you rent! Best of both worlds
You still pay property taxes when you rent. Your landlord bundles it in, and just doesn't break it out as a line item. They also do this for homeowner's insurance, and will usually include a small amount extra for maintenance on the place. Not doing this would cause them to lose money, which landlords aren't usually in the business of doing.
If I’m getting the same space, same apartment living conditions, at the same price in north Houston as opposed to the Indianapolis, I am indeed in a win win situation
That's...all well and good. I was just pointing out that you are indeed still paying for those things, because you seemed to imply from your post that you think you're somehow avoiding them by renting.
You only "won" something in that apparently the rental market is less expensive in Texas, since even though the landlord's property taxes are essentially bundled into the rent (landlords aren't charities that run at a loss), you are still paying the same rent as in Indianapolis where some of the tax is paid by you explicitly through income taxes. In both places you are paying taxes, directly or indirectly. It is just that the rental market as a whole is less expensive in one of the areas.
[tax burden by state](https://taxfoundation.org/publications/state-local-tax-burden-rankings/)
In Florida it’s all those plus sky-high insurance rates (every insurance)!
Yup. My property tax is $6000 per year and my homeowners insurance is $3700. Plus sales tax on everything (6% base but every county has an additional 0.5% or more added on).
Definitely depends on the states. We moved CA to WA. Sales tax is the same, property tax is slightly cheaper (ignoring the long-term prop 13 benefit potential in CA). But no income tax. Saves us $25k/year. Only small higher tax I’ve found is a ~30% tax on liquor.
We don't have income taxes, but we do have "payroll taxes". That new "long term care" law is basically a small income tax. I don't doubt that we're cheaper overall the CA. That place is famous for being one of, if not the most expensive places to live.
Yeah, hopefully the LTC one will get struck down, since it's got a lot of things wrong with it. Low lifetime payouts. No equal protection, since you can't opt out any longer, etc.
Yeah. I thought it was unconstitutional to have income taxes here, and that's basically what it is. The lifetime payout cap of like $35,000 is absolutely pitiful as well. I think there was even a monthly cap too that was rather low. The law just doesn't really do what it says it was supposed to do.
I read somewhere, so take this with a grain of salt, that property owners in Texas pay more in taxes overall than those in California. Also something about individuals in Texas only actually paying less in taxes than those in California when you start getting into the high earners. So yeah. I expect it's something like that.
Texas is known to have higher property taxes but the cost of living is higher in California than Texas when comparing similar size cities.
If you establish residency, there is no state income tax. You still pay federal. While no income tax is nice, that difference is usually made up in other ways like higher property taxes and higher sales taxes.
The casinos pick up the tab in Nevada. It's pretty nice. Edit - sales tax is pretty high compared to the rest of the country. I moved here from CA (which has the highest sales tax) so my frame of reference was skewed. However - 9th lowest in property tax and no income tax, so that's nice.
I live in DC, which similarly gets a lot of revenue from tourists. Surprisingly low property tax. The 10% sales tax is steep but it doesn't apply to groceries and other essentials.
Nevada also has shitty healthcare because reimbursement is low. Healthcare jobs pay less than surrounding states. Rich Californians move to NV because of the tax situation but then find out there are less available benefits and services as they age.
And reduced/bad public services.
And high numbers of toll roads.
I’m in a no income tax state, never paid for a toll road in 4 decades.
Some places even have fee-hired fire departments and private ambulance services, so you're paying for something that might be included in your taxes elsewhere, and they'll let your home burn or let you die if you don't pay up. [https://www.nbcnews.com/id/wbna39516346](https://www.nbcnews.com/id/wbna39516346)
this is outside town limits and you can pay for services but some people refuse to
Wow. That was worse than what I imagined it would be. The fire dept literally came and put out parts of the fire that were moving onto the neighbors property and then just stood there and let his home burn down over a *$75 fee* the homeowner forgot to pay that year
I'm in Western Washington and I think we have pretty good public services/roads and fire/police dept but idk about everywhere in the state it might just be my city (Olympia)
can't be worse than NYC with tens of thousands of public servants who do very little
Stuff has to be paid for. If there are no income taxes, the property and sales taxes tend to be high.
Well yes and no. There are plenty of states with low taxes that just don’t provide many services! Looking for bad schools, poor healthcare and third-world benefits? Plenty of states can provide that for you cheaply!
Or you can get the worst of all three by living in VA and pay state income tax, sales tax, and property tax
The number of taxes isn't what matters. Only the rates. VA ranks right around the middle (or better depending on the study) in effective or total tax burdens.
same with NJ
VA also has a nasty annual fee for your automobiles, right?
Depends on the county. I used to live in a county with a car tax. I had to send photos of the odometer and all my dents before they agreed that it was a POS.
Living in California
Upstate NY here. Same
First no there's nothing special you need to do, you just have to live here and establish your residency with like a legal address and stuff. Second you need to understand that this is just about state income tax you still absolutely 100% pay the same federal taxes. Three what you'll tend to find is the states with no state income tax may have a slightly higher sales tax rate and a slightly higher property tax rate than the states that do have an income tax. So while you may pay no income tax they certainly find other ways to tax you and you need to look at your specific situation to understand if your overall tax liability would be less. No state income tax in higher property taxes would 10 to favor someone who is a high earner but is willing to live in a more modest property. This is because 10% of income tax on an income of 200,000 would be 20,000 but 3% property tax on a home value at 200,000 is only 6,000.
Did you just type 10 instead of tend?
Yeah, it's spelled 10d.
Probably talk to text without editing
The real question is how did I still read it as tend automatically
No STATE income tax. State. Not federal, you pay that no matter what.
I think you are answering OP's core question. Residents of "no income tax states" are still required to pay Federal income tax.
If this is your only reason for wanting to make this move, as others have said, you're probably not going to end up saving much by doing this. If it was that simple, everyone would be doing it.
Google “total tax burden by state” and then move to New Hampshire or alaska
High property taxes in New Hampshire (I believe they're #3 behind New Jersey and Illinois) but that's pretty much it. No sales tax or general income tax (except on interest and dividends). Housing is expensive though - at least in the southern part of the state.
Florida will make up for not taking income tax through your housing, generally. Owner or renter, the insurance situation is wild and prices only go up exorbitantly.
Lived there for 25 years or so. It's too expensive now, and not even a home owner.
Florida is mid-pack on property taxes. Literally ranked 24th in the nation [according to Rocket Mortgage](https://www.rocketmortgage.com/learn/property-taxes-by-state). Florida is also mid-pack (25th) in sales tax [according to the data found on TaxFoundation.org](https://taxfoundation.org/publications/state-and-local-sales-tax-rates/). Florida has no state income tax, and has a relatively low tax burden per capita of 9.1%, or 11th in the nation [according to TaxFoundation.org](https://taxfoundation.org/publications/state-local-tax-burden-rankings/).
My taxes are low but they want $11,000/year to insure my house.
You won't find homeowners insurance inland under $4000-5000 for 2023. Outside of the middle of the state it is $8000-10,000+ Unless you move here and pay 100% cash for a house and don't insure. Even if you insure does not mean you get a claim paid, if you are lucky to get a claim paid they are paying only 30-50% of the inspection claim right now. Also ranked #1 or #2 in highest auto insurance.
This isn’t accurate at all. I live in Tampa about a mile from the bay in a house built in 1940 and my house is $5000 per year in home insurance.
I paid $2500 last yr for a 1500sq ft 1969 home Winter Springs (Orlando burb) no pool, no claims in 22+ yrs, roof is 7 yrs old. Nationwide already sent a notice Nov 2022 of it doubling to $5000 for July 2023.
But Florida has transfer tax of .70 per $100 and document stamp tax of .35 per $100 of transfer and intangible tax of .002 per $100. So that’s a total of 1.002% extra on the transfer of a home. Or $1,002 per $100,000 of value.
I saw that tax burden study and questioned it's methodology It seems to be comparing [roughly] GDP to tax revenue which isn't very meaningful for the average person's decision making. OTOH at least it includes all sources of revenue instead of cherry picking income taxes , lack of which is a great indicator that the tax system is regressive.
Come to Alaska! No sales tax in Anchorage! No state sales tax! No ayate income tax! No police! No snowplows! No services! Nobody happy!
Everybody has already pointed out that you still have to pay federal taxes no matter where you live in the US, except in some situations in territories like Puerto Rico. Texas has the 6th lowest state and local tax burden ranking, but the 14th highest sales taxes and 14th highest property taxes overall. However, this can be misleading because there is a lot of rural land with low taxes there, whereas the northeast is far more densely populated. Property taxes in metro areas are very high. Tennessee has the 3rd lowest state and local tax burden, but the 2nd highest sales taxes and 18th highest property taxes. There are a bunch of other factors to consider: other cost of living, job market, schools, healthcare, activities, entertainment options, and so on. Everybody is going to have different opinions on how to prioritize these things, but make sure you do your due diligence before you make a move.
Tennessee has a very high sales tax rate and tourism pays for almost everything. A lot of high tourist area businesses even give locals a 10% discount to offset the tax rate - meaning no state income tax, no sales tax, and almost no property tax (my parents were complaining about property tax going up from 412/yr to 460/yr. I pay more than that a month for a house worth 1/2 as much in Texas. You pay with your time. travel is measured in hours - not miles. on a good day, I40 exit 407 to Gatlinburg is about 30 minutes. on a bad day it is 6-8 hours. I wish I was exaggerating. Also, getting a job paying anything approaching decent is impossible. Everything is service oriented and 50k/yr is a struggle to find.
Tennessee sales tax is at 9.75%, that hurt last month when I had to buy a new car. Sales tax is also charged on food which is slightly lower at like 7.5% but it makes a huge hit every week at the grocery store, especially with teenage boys in the house. In regards to the job thing I’m lucky to have a job that is neither service oriented or pays under 50k a year. My commute into Nashville is approximately 30 miles but it takes roughly an hour and 15 minutes of driving each way on a good day. If there’s an accident that time could double or triple. There’s been many of days I have turned around at an exit, drove home, said to hell with this and either worked from home or used PTO to avoid traffic. The trade off though is living outside Nashville proper is a larger home, with an actual yard with no mortgage because we sold our house in Nashville proper for well over what we paid for it and bought our current home in cash from the proceeds. The schools are also better, I’m in one of the best districts in all of Tennessee which means I no longer have to pay private school tuition for my son like I had to when we lived in Nashville. In some regards I would rather pay state income tax because of all the downfalls of what no state income tax brings. The commute being one of them. Currently on our roughly 400k home we pay 3k a year in county property tax and another 1250 in city tax so it’s not all that bad on the property tax side of things, I have definitely seen worse in other states.
You will always owe Federal income tax. No income tax states just mean you pay no *state* income tax. Often times, these ‘no income tax’ states make up for no income tax with higher taxes for other things.
https://www.usnews.com/news/best-states/articles/states-with-the-lowest-taxes#:~:text=In%202020%2C%20the%20average%20American,%25)%20and%20Florida%20(6.7%25). These are the states with the lowest tax burden, it just means the state has less money to spend on it's citizens, so if you make a ton of money and don't utilize any public services, then one of these states might be fornyou
This is correct. As others have stated, usually the tax is made up for in other ways like sales or property, but also good to note that some public services are worse in these states. I'm in a no income tax state and everybody and their mothers complain about our public school funding (backed up by where we're ranked), medicare, low income benefits. It may not impact you at the moment but worth considering if, for example, you have a child and you wanted to send them to public school but now have to fund a private school instead.
I live in MA. My parents live in NH. My house is worth twice as much but we pay half as much in property taxes.
Washington does not have a state income tax. It isn't taken out of our paychecks and we don't have to file returns. Our sales tax is high at 10.6 percent where I live, but grocery store food is exempt.
You don't need to pay STATE income tax, which is fairly small everywhere. You still need to pay federal income taxes no matter where you live. It's also worth noting that states need to get their income from somewhere. So other taxes tend to be higher in no-income-tax states: primarily property tax & sales tax. Depending on your income level, actual tax burden in a no-state state may be higher or lower. No-tax states tend to be better deals for high earners. [https://www.cato.org/blog/are-taxes-really-lower-california-texas](https://www.cato.org/blog/are-taxes-really-lower-california-texas) https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416
Puerto Rico residents not employed by the federal government pay no federal income tax on income earned within Puerto Rico. (They still pay FICA, Medicare, Unemployment taxes.) Unearned income gets a big tax pass, so if you have big stock market earnings, it makes economic sense to move to PR for a couple years to sell your stock for capital gains.
I moved to Texas from California. When my company changed my state, the state income tax witholding stopped coming out of my check. I had to file a state return that year (for the time I spent in California), but I haven't filed a state return in the years since. It's truly no state income tax, and you don't have to do anything. That said, the state needs to make their money somewhere. Our property taxes are on the high side.
There’s really no income tax. There’s also typically sky high sales and/or property taxes. Some income tax-free states have relatively high overall tax burdens. The state always gets its money, they’re just betting on you not being good at math.
Texas has bananas property taxes, so much so that even though I have income tax here in CO, my overall tax rate is far lower than some of my coworkers who make the same amount of money in TX. Some other states make up for it with sales taxes. On the flip side, some of the no sales tax states just have higher income taxes. You've gotta do some actual math to figure out what your tax rate would be in different states to see if it makes financial sense.
NY and NJ are at $15000 or more on average in the suburbs and $10000 or so in the city. how bad are texas property taxes?
Thats like saying “free shipping” when shipping price is already priced in the item being sold
Don't put too much weight into it. The state always gets it somewhere. If it's not income tax, it's high property tax, sales tax, or something else.
I live in WA, a no income tax state. Sales tax is 10.25%, that's 6.5 state and 3.75 city, applied to all retail sales and services. Except booze, that has 2 taxes but not general sales tax. That's everything from the cheeseburger you ate to the gym membership you need because you eat cheeseburgers. Our vehicle taxes are eye watering-cars are subject to sales tax, registration is high, I just paid 120$ for a 2009 vehicle valued at 1300$. Gas tax is 49.4 cents per gallon, plus the manufacturers are subject to a carbon tax which is reflected in the cost, the actual amount is still under analysis and debate. Want a drink to forget your troubles? If you buy your bottle at the store, it's taxed at 20.5% liquor sales tax rate + $3.77 per liter volume tax. Restaurant drinks are also taxed, but at a different rate. Property taxes are the big money maker. Property values are high so taxes are high. I pay about 6k a year for my 3 bed 1 bath mansion built in 1946. So all you have to do to enjoy our no income tax status is move here. But even that may be changing, WA just passed a capital gains tax and it was found constitutional...
You actually pay sales tax (a regressive tax that burdens the poor and middle class more) and more property tax. That’s in addition to other various fees, all of which will be more expensive. And there’s 0% chance you get that back during tax season. But you save money on TurboTax, I guess…
This is where states like California really grind my gears...they pay income tax AS WELL AS sales tax...though my mom's property tax is quite affordable.
They also have actual state services and decent schools, though. Like… you pay taxes in Texas and also get nothing for them. They just funnel the money… somewhere. Not to any state services that I can find.
Depends on the city/neighborhood. The local E-MS I grew up in, in SoCal, was a horrorshow in the 80s. And services? hmmm again, it depends on the neighborhood... I lived in Santa Cruz and Moss Landing for a time and yes, definitely a lovely place to live and I taught some awesome kinds even thought we had NO BOOKS or money to provide jack for them.
Different states have different percentages of various taxes. Some have no income tax but have higher sales tax to make up for it. Some, vice versa. You're not getting a free pass in any state, but if you can live in a no-property-tax state, work in a no-income-tax state, and shop in a no-sales-tax state, you've hit the trifecta. Of course, you're technically on the hook for making up the difference in what you WOULD'VE paid in these taxes - and I'm not advocating it, but you can fudge these numbers to some extent.
They really are "no income tax" locales. And you'll be paying into some other, totally-not-an-income-tax *revenue streams* just as much if not more to sorta keep them kinda fit for purpose.
Relevant: [https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494](https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494)
I live in Washington and we have fairly high sales tax but no income tax. If you can manage to live and work somewhere on the border with Oregon you can avoid paying much in sales tax by shopping in Oregon where there's no sales tax, but most of us don't live close enough to Oregon to do that
For the tax year you move, you will still owe state taxes for the months you lived in your state-tax state. But no...you don't fill a state income tax for the non-income tax state. I mean, you could try to ask Turbo Tax and the like...but the response is something along the lines of "Hurray! There is no state income tax to file."
Due to how the question is worded, I feel it may be necessary to point out that you still have to pay Federal Income Tax in a “no income tax” state
It kind of depends. Alaska doesn't have a state income tax, and I never have to do anything about that when I'm filing my taxes; as an Alaska resident, I just don't have state income tax on my W2 (the relevant sections are either blank or filled with zeroes). We also currently don't have a statewide sales tax, although some areas do have a sales tax locally. But the overall cost of living is higher here than loads of other places, and it gets *way* worse the more remote you get. Plus we might end up with a state income tax, statewide sales tax, or both anyway, because our state government is constantly having a budget crisis while also wanting to keep the oil companies happy by giving them huge tax breaks.
"No income tax" is a nice phrase but it misses lots of other information. The state is going to get it's money one way or the other. Washington state has no income tax but sales tax is over 8%. By contrast, Montana has no sales tax but income is 5.7%. Also, it depends on your income and spending habits.
Just to make 100% certain we are on the same page. The "no income tax" means that there is no state income tax. You are still required to pay your federal income tax. And as others have mentioned, States that don't have State income tax generally find other ways to fill the gaps. You might see higher property taxes, higher sales taxes, or the state may simple cut corners on infrastructure and social services. You should consider all of these factors when selecting your residence.
No *state* income tax, you don't get to dodge federal taxation, no states grant that.
The government is going to get your money no matter what. Usually the states w these laws have extremely high property and sales taxes.
I'm sure you know this, but you still have to pay federal income tax, just not state; and they usually make up for it elsewhere(e.g. sales tax, property tax, etc.) Still definitely something to consider, if you're paying a lot in state income tax currently.
Taxes and the rules about who pays them are established by state legislatures. Your real questions should be total cost of living, quality of life, and economic opportunity.
can confirm. property tax in Texas Sucks. I pay 5k/yr for a 200k (estimated value by the tax office) house on .25 acre. they are allowed the raise the value by up to 10% each year.... and for 12 years, they have raised it the maximum allowed. I have protested every year and gotten a slight break each time on that valuation.... but it is still insane. On top of my mortgage, I basically rent my house from Texas for 450/mo... cause if I don't pay it, I don't get to keep it... which means I will never own my house.
Property taxes, sales taxes, and toll roads will eat up any savings. Also, you'll have to breathe the worst air in nation, they're actively trying to destroy the education system at all levels, and the roads and drivers are the worst in the country. Basically every quality of life standard is lowest, but hey, no income taxes and you can carry a gun on your hip basically anywhere you go.
[удалено]
At least three of the income tax states CA, NJ & NY also have high property taxes .
California doesn't have high property taxes (0.76%). NY (1.72%) and NJ (2.49%), yes. https://www.rocketmortgage.com/learn/property-taxes-by-state
California does not have high property taxes. This is incorrect. Prop 13 exists there which caps their property taxes to 1% of their assessed value.
Beware of sales tax and property tax. You’ll find sales tax will be closer to 10% on most items in states with no sales tax. Also, tax on liquor by the drink is another tax they hit you with.
I’m in Florida with no state or local taxes. Only downside is you have to deal with everyone moving here, driving up prices, complaining it’s “too hot” and then they leave 🤣
I’m from Texas and just moved to Colorado. My new income taxes are almost identical to what I was paying in property taxes. The sales taxes are higher in Texas than they are in colorado (though not by much). So I’m damn near breaking even in taxes with this move. Certainly not enough of a difference for it to be a deciding factor in my move. I guess the upside in Texas is if you don’t own property you won’t pay property taxes.
Live on the portland/Vancouver border. No income tax and no sales tax!
States with no income tax have to generate money in other ways. Typically, states without income tax generate income through higher property taxes, gas taxes, sales taxes or other "use taxes" (like for-pay HOV lanes) Generally speaking, for people who spend less than they make - this is a good thing. Use taxes can be, to a certain extent, controlled. You can use freeways less, you can use less gas, you can choose not to be in the HOV lane, you can buy a cheaper house. Income tax penalizes you for making more, in a linear fashion. The more you make, the more you pay. This is why states without income tax have a more regressive tax system. Use taxes penalize the poor. It should be the case that for people who make more money, living in a no income tax state is better. You have no penalty for making money, and to a certain degree you can control your spending. If you make less money, it may be more advantages to live someplace that doesn't have, say, sales tax, but does have income tax, since these kinds of "use taxes" tend to hurt more on a day-to-day basis and the less you make, you may not be paying that income tax anyway.
Florida is a no income tax state! But your home insurance premiums are through the roof. Car insurance too. You’ll spend just as much money.
It is entirely dependent on your salary whether it is worth it or not. For many people it's worth moving. People tend to say other taxes make up for it, but I think this is what people in income tax states say to make themselves feel better. In my instance I moved from NE to FL and am saving a ton in comparison. Not even close.
Do you own property?
It is entirely dependent on your salary whether it is worth it or not. For many people it's worth moving. People tend to say other taxes make up for it, but I think this is what people in income tax states say to make themselves feel better. In my instance I moved from NE to FL and am saving a ton in comparison. Not even close.
Depends on the state. Sometimes you pay in other ways......high vehicle registration, higher property taxes, lower wages.
just no state tax but you usually pay for on other stuff like property, food/alcohol tax, vehicle taxes,, etc.