Top states with the lowest taxes in 2022

Timely collection of taxes from individuals and legal entities is the basis for the stable development of any state. The USA is no exception. All Americans are convinced that paying taxes is their main responsibility. In addition to federal taxes, Americans pay plenty of other taxes. Do you know the most cost-effective states regarding taxation, and which, on the contrary, can reduce welfare? Please, get the details below. 

States with the highest taxes

California takes first place. The favorable California climate comes with a 12.3% state tax if you earn up to $1,000,000. If you are a millionaire, the state tax will be 13.3%.

Top 10 states with the highest taxes:

• California - 13.3%

• Hawaii - 11%

• New Jersey - 10.75%

• Oregon - 9.9%

• Minnesota - 9.85%

• District of Columbia - 8.95%

• New York - 8.82%

• Vermont - 8.75%

• Iowa - 8.53%

• Wisconsin - 7.65%

Each state has its progressive taxation system. It means that residents of the states will not pay the full percentage indicated above but the amount taking into account their expenses and benefits.

Seven US states impose no personal income taxes. These are Texas, Nevada, Washington, Alaska, Florida, Wyoming, and North Dakota. New Hampshire and Tennessee levy taxes on interest and dividends on bank deposits, not on salaries.

Property taxes

Property tax is the most important in the US. This tax must be paid first. Property tax falls under local jurisdiction. Residents in New Jersey pay the highest taxes. Depending on the locality, property tax varies from 12.5% ​​to almost 17%. As you can see, owning real estate in New Jersey is rather expensive.

Louisiana has some of the lowest property tax rates. According to local law, the first $7,500 of a property's appraised value is tax-free. For example, the property tax in Grant County is only 0.68%. The appraised value of the house is 1/10 of the market value of the house. Hence, a $100,000 house would have an estimated value of $10,000. Consequently, the first $75,000 of the market value of the house is not included in the property tax calculation. 

Sales taxes

The state of Alaska has no income tax thanks to the oil and natural gas production tax. However, Alaska is one of the 37 states where local governments can levy sales tax by adding state and city taxes. The maximum sales taxes are recorded in Tennessee (9.55%), Arkansas (9.51%), and Washington (9.23%).

Taking into account all tax collections, the most profitable states in this regard are as follows:

1. Wyoming

2. Florida

3. Nevada

4. Tennessee

5. Alaska

6. North Dakota

7. Washington

8. California

9. Arizona

10. Delaware

Perhaps, taxes are not a determining factor when choosing a place of living in the US. However, knowing the US tax system in general and at the state level, in particular, will help you save money in the long run.