Tax rates for individuals vary across the nation. The Tax Foundation has a whole section dedicated to state taxes which provides a detailed look into the different tax rates and deductions available in each state. Each state has its regulations regarding taxation and each taxpaying citizen should be aware of their specific state’s tax laws.
States with no sales tax
• New Hampshire
States with no income tax
• South Dakota
According to the recent study published by MoneyGeek, Washington receives a B grade, making it one of the more tax-friendly states in America. Both studies corroborate the benefits of living in Washington.
You might want to know about the taxes you could be facing if you move from one state to another before making a big decision. According to the recent study published by MoneyGeek, moving from Iowa to New York would cost an average of $7,473 in taxes and fees over 30 years. Moving from New York State to Wisconsin would cost an average of $1,300 more in taxes and fees over that period out of state can result in huge tax bills so make sure you do your research first!
How Tax-Friendly is Washington?
The lack of income tax is ideal for small business owners which is one of the most compelling reasons to move to Washington. Additionally, property taxes are surprisingly modest compared to the rest of the country. For instance, the national average is 1.07%, but Washington State is at 0.93%. To put this in perspective, on a $500,000 home, property taxes wind up being $4,650 annually. Compare this to Washington’s neighbor, Oregon. Oregon’s average county tax rate is 1.16% (a little higher than the national average) and annual property taxes are $5,800 on a $500,000 home.
However, there are a few long-term factors that can make the state’s taxes seem a little less friendly. While there’s no income tax, there is a high state sales tax of 6.5% (above the nation’s average). When combined with local sales tax, Washington ranks the fourth-highest in the country at 9.29%.
Additionally, while nothing is official yet, there is a 7% tax on the sale of capital assets if the profits exceed $250k annually, but an appeal is forthcoming.
Photo by Felipe Galvan