The Most- and Least-Taxed States for Retirement

When it comes to choosing where to live during retirement, weather isn’t the only consideration. State and local tax laws have a big impact on your nest egg.

The charts here show the highest and lowest state tax rates and costs of living, from data provided by nonprofit think tanks the Tax Foundation and the Council for Community and Economic Research.

State Income Tax Rates
Highest Lowest
1. California (13.3%) 50. Alaska (0%)
2. Oregon (9.9%) 49. Florida (0%)
3. Minnesota (9.85%) 48. Nevada (0%)
4. Iowa (8.98%) 47. South Dakota (0%)
5. New Jersey (8.97%) 46. Texas (0%)
6. Vermont (8.95%) 45. Washington (0%)
7. Washington DC (8.95%) 44. Wyoming (0%)
State and Local Sales Taxes (state and average local tax rates combined)
Highest Lowest
1. Louisiana (10%) 50. Delaware (0%)
2. Tennessee (9.5%) 49. Montana (0%)
3. Arkansas (9.3%) 48. New Hampshire (0%)
4. Alabama (9%) 47. Oregon (0%)
5. Washington (8.9%) 46. Alaska (1.8%)
Property Taxes (Rankings based on the statewide average of local rates.)
Highest Lowest
1. New Jersey 50. Hawaii
2. Illinois 49. Alabama
3. New Hampshire 48. Louisiana
4. Connecticut 47. Delaware
5. Wisconsin 46. Washington DC
If taxes were the only consideration in our retirement destinations, everyone would move to Alaska, which has no state income or sales taxes. However, the “last frontier” state also has one of the highest costs of living in the U.S. Therefore, you may also wish to consider which states have high and low costs of living.
Don’t Forget: Cost of Living
Highest Lowest
1. Hawaii 50. Mississippi
2. District of Columbia 49. Arkansas
3. California 48. Oklahoma
4. Alaska 47. Michigan
5. New York 46. Tennessee