Live Here, Save More: 21 States Offering the Best Tax Breaks

Most people don’t realize how much state taxes eat into their income until they do the math. Taxes aren’t just an annual headache, they’re the silent drain on your paycheck every single day.
That’s why the right state can make all the difference between just getting by and building real wealth. The best part is, you don’t have to work harder, you just need to play it smart.
According to recent data, the average single worker faced a net tax rate of 24.2% in 2023. That’s nearly a quarter of every paycheck gone before it even hits your bank account. Imagine what you could do if you kept more of that.
In this article, we’re breaking down 21 states that offer the best tax breaks. You’ll see how each state’s tax policies impact your income, your business, and your retirement plans, so you can make decisions that actually grow your wealth.
Table of Contents
Alaska

Alaska isn’t just cold, it’s cool for your bank account. No state income tax. No sales tax. That’s already a win. But the cherry on top? The Permanent Fund Dividend, a yearly cash payout just for living there.
Property taxes are manageable, especially when you consider how much you’re already saving elsewhere. The state actively supports small businesses with minimal red tape and tax obligations, making it a financial sweet spot for entrepreneurs.
While Alaska does not impose a state-level sales tax, many local jurisdictions within the state do levy their own sales taxes.
Retirees love it too, Alaska won’t tax Social Security benefits or pensions, letting them stretch their retirement dollars further. For anyone looking to cut down on taxes and bank some extra cash, Alaska makes a strong case.
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Florida

No state income tax. That’s Florida’s biggest flex, and it’s a game-changer. If you’re working or retired, that’s money back in your pocket every single paycheck. The state also throws in a homestead exemption that slashes property tax bills for homeowners.
The business climate? Equally tax-friendly. Florida keeps corporate taxes low, attracting small businesses and big companies alike. And thanks to the state’s tourism-heavy economy, local incentives keep things booming.
Retirees don’t just move here for the beaches, the state doesn’t touch pension or retirement income either. Between the tax perks and the warm weather, it’s no wonder Florida is one of the top choices for anyone looking to keep more and pay less.
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Wyoming

Wyoming is one of the rare places that feels like it was designed with financial freedom in mind. No state income tax. No corporate tax. And property taxes? Among the lowest in the country.
That means if you’re earning, investing, or just living your best life, more of your money stays with you. For businesses, Wyoming is a dream. It’s got some of the simplest tax structures around, plus incentives for industries like tech and energy.
Entrepreneurs can start and run companies without the usual tax headaches. Retirees benefit too, Social Security and retirement income go untaxed, making Wyoming a low-cost haven for those looking to maximize their golden years.
If keeping what you earn is the goal, this state delivers.
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Nevada

Nevada knows how to put on a show, especially when it comes to taxes. No state income tax means residents immediately get a financial leg up. Property taxes? Still below the national average. Sales tax is higher than some other states, but for many, the trade-off is worth it.
The business landscape is where Nevada really shines. With no corporate income tax, it’s an easy pick for entrepreneurs and big players alike. The state actively supports gaming, tech, and renewable energy, offering major incentives that drive growth.
Retirees also love it here, not only is their retirement income untouched by state taxes, but they also get access to a lively, entertainment-filled lifestyle. If you want low taxes without sacrificing excitement, Nevada is a solid bet.
Texas

Texas plays it big, including when it comes to tax advantages. No state income tax means residents keep more of every paycheck, a massive benefit if you’re working or retired.
Property taxes are on the higher side, but homestead exemptions help homeowners cut their tax bills down to size. For business owners, Texas is a powerhouse. The absence of corporate income tax makes it a magnet for startups and large companies, especially in tech and energy.
Its central location boosts logistical advantages for trade and expansion. Retirees? They get a good deal too, Social Security and pensions aren’t taxed at the state level, making Texas a strong choice for anyone looking to make their money go further.
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South Dakota

South Dakota isn’t just famous for Mount Rushmore. It’s a financial stronghold. No state income tax, no corporate tax, and some of the lowest sales taxes in the country. That’s a triple win for residents and businesses alike.
With one of the smallest overall tax burdens, South Dakota is a haven for entrepreneurs looking for minimal red tape and maximum profits. Property taxes are low, and the cost of living is equally manageable.
Retirees benefit too, Social Security and other retirement income are fully exempt, meaning they can enjoy their golden years without Uncle Sam dipping into their savings. If you’re after a financially stress-free environment, South Dakota checks all the boxes.
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Tennessee

Tennessee keeps taxes simple and low. No state income tax means residents automatically take home more. The last remnants of the Hall tax, which used to apply to dividends and interest, disappeared in 2021, making the state even more appealing.
For businesses, Tennessee is a goldmine. The state actively encourages growth through tax incentives, especially in manufacturing and tech. Retirees also win big here, Social Security and other retirement income are completely untaxed.
Pair that with Tennessee’s low cost of living, and it’s no surprise that more people are choosing to settle down here. Fewer taxes, more money, and a growing economy? That’s a solid combination.
Washington

Washington state keeps it simple, no state income tax, period. That’s a big deal for anyone earning a paycheck. Yes, sales tax is on the higher end, but without an income tax draining your wallet, it evens out for most people.
Property taxes are also reasonable compared to other states with high-income taxes. Businesses thrive in Washington due to its absence of corporate income tax. Tech, healthcare, and manufacturing industries get extra incentives to grow, making the state a hub for innovation.
Retirees also benefit, no state tax on Social Security means more money stays in their accounts. With a booming economy and financial advantages, Washington offers both opportunity and long-term savings.
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New Hampshire

New Hampshire is all about simplicity when it comes to taxes. There’s no state income tax on wages, which keeps more money in your pocket. While the state does tax interest and dividends, that’s small potatoes compared to what you’d pay elsewhere.
Property taxes are on the higher side, but you won’t find sales or use taxes adding to your expenses. For business owners, New Hampshire offers a streamlined environment with limited corporate taxes, making it attractive for entrepreneurs.
The state’s strong economy and quality of life make it a solid pick for those looking to work smarter, not harder. Retirees find it appealing too, there’s no tax on Social Security benefits, and most retirement income stays untouched, allowing savings to last longer.
Add in the natural charm of New England, and it’s easy to see why people choose to settle here.
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Delaware

Delaware is small, but its tax benefits pack a punch. No sales tax at all means everything you buy comes without that extra sting at checkout. Property taxes are low compared to national averages, and there’s no tax on Social Security benefits, giving retirees more breathing room.
The state is also a business magnet. Delaware’s corporate-friendly laws make it the go-to place for company incorporation, with simple legal processes that cut down on costs.
Entrepreneurs appreciate the ease of setting up shop, while large corporations thrive under favorable tax codes. For individuals and businesses alike, Delaware is proof that good things come in small packages, especially when it comes to tax savings.
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Montana

Montana skips the sales tax altogether, which can lead to big savings over time. That’s right, no state-level sales tax. Income tax does exist, but the state offers generous deductions and credits, helping to soften the blow.
Property taxes are moderate, striking a balance that’s easy on homeowners. For businesses, Montana fosters growth through tax incentives and funding programs, making it attractive to entrepreneurs looking for a fresh start without the heavy financial baggage.
Retirees also benefit from tax breaks on certain types of retirement income, and the cost of living stays reasonable. When you combine financial perks with Montana’s stunning landscapes, it’s an easy choice for people looking to stretch their dollars and enjoy the view.
North Carolina

North Carolina keeps things competitive with a flat state income tax rate that simplifies budgeting for residents. Property taxes are reasonable, and targeted exemptions help homeowners reduce their bills even further.
Sales tax is manageable, keeping everyday expenses in check. Businesses thrive here thanks to incentives aimed at technology, research, and manufacturing industries. Entrepreneurs find North Carolina appealing for its central location, which provides logistical advantages for growth.
Retirees also benefit, Social Security income isn’t taxed at the state level, which helps preserve their financial security. With a booming economy and a reasonable cost of living, North Carolina offers a balanced approach to life and money.
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Arizona

Arizona offers financial perks that go beyond its sunny weather. State income tax rates are low, and property taxes are affordable, making it attractive for both residents and investors. The state also provides deductions for families, reducing overall tax burdens.
Arizona’s business environment is strong, thanks to tax credits focused on innovation, renewable energy, and manufacturing. Entrepreneurs appreciate the cost-effective corporate taxes that support growth and expansion.
Retirees enjoy exemptions on Social Security income, which helps maintain financial stability during retirement. Pair that with a low cost of living, and Arizona proves it’s more than just desert landscapes, it’s a smart financial move.
Georgia

Georgia keeps taxes in check with a competitive state income tax rate and a range of exemptions for residents. Property taxes are moderate, which makes homeownership more accessible.
Families benefit from credits related to education, energy efficiency, and other key expenses. Businesses in Georgia thrive thanks to generous tax incentives, especially in industries like film, tech, and logistics.
Entrepreneurs take advantage of the streamlined registration process and the supportive business environment. Retirees find financial comfort here with favorable tax treatment for Social Security income and other retirement funds.
Between a strong economy and a reasonable tax burden, Georgia offers both opportunity and security.
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Hawaii

Hawaii’s appeal isn’t just its beaches, it’s also the tax benefits. Property taxes are among the lowest in the U.S., offering significant savings for homeowners.
While the state income tax is progressive, it provides relief to low and middle-income families, balancing out the costs of living in paradise. Hawaii promotes sustainable industries through tax credits focused on renewable energy and agriculture.
Entrepreneurs find opportunities through incentives for small businesses, especially in tourism and tech sectors. Retirees enjoy exemptions on Social Security and pension income, which adds to their financial security.
When you factor in the lifestyle perks alongside the tax benefits, Hawaii becomes more than just a vacation spot, it’s a smart financial choice for many.
Oklahoma

Oklahoma offers low state income tax rates and some of the most affordable property taxes nationwide. Families benefit from credits for childcare, education, and other living expenses, which helps stretch every dollar further.
The business environment thrives due to generous tax breaks in key industries like energy, aerospace, and manufacturing. Entrepreneurs appreciate the low cost of doing business and the supportive economic landscape.
For retirees, Oklahoma’s tax exemptions on Social Security and certain retirement income ensure financial stability in later years. Affordable living combined with smart tax policies makes Oklahoma a hidden gem for savvy savers.
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Mississippi

Mississippi keeps property taxes among the lowest in the country, providing real savings for homeowners. The state income tax is progressive, which means tax rates are fair across different income levels.
Tax credits for education and renewable energy investments offer even more opportunities to save. Businesses benefit from targeted incentives that support growth in agriculture, manufacturing, and tech sectors.
Entrepreneurs enjoy low startup costs and an environment that encourages innovation. Retirees also win here, Social Security income isn’t taxed, and certain retirement benefits are exempt, making Mississippi a financially friendly place to settle down.
Arkansas

Arkansas blends low property taxes with a progressive state income tax system that’s easy to manage. The state offers valuable tax credits for higher education, energy efficiency, and other family-focused expenses.
Businesses thrive here with tax breaks designed for key industries like transportation, agriculture, and technology. Entrepreneurs find Arkansas attractive for its affordable operations and business-friendly climate.
Retirees benefit from exemptions on Social Security and other retirement income, helping their savings go further. Add in affordable housing and healthcare, and Arkansas becomes an appealing option for both working families and retirees looking for value.
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Michigan

Michigan stands out with moderate property taxes and a flat state income tax rate, offering predictability for residents. Families can take advantage of credits for education expenses and home energy improvements, easing the cost of living.
Businesses benefit from Michigan’s strong incentives, especially in manufacturing, research, and renewable energy sectors. Entrepreneurs are drawn to the skilled workforce and supportive infrastructure that helps new ventures succeed.
Retirees enjoy tax breaks on public pensions and specific retirement income, providing extra financial comfort. Michigan offers a balanced mix of economic opportunity and lifestyle benefits, making it a great place to live and save.
Utah

Utah’s tax structure keeps things competitive with reasonable state income tax rates and moderate property taxes. Deductions for education, charitable contributions, and energy-efficient home upgrades help reduce tax bills.
The business scene in Utah is thriving, thanks to low corporate taxes and strong support for tech and healthcare industries. Entrepreneurs benefit from a highly educated workforce and state programs that encourage growth.
Retirees enjoy tax benefits on Social Security income and pension distributions, allowing them to maintain financial stability. Combine that with a growing economy and reasonable living costs, and Utah offers a smart choice for both work and retirement.
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Alabama

Alabama offers significant financial relief with low property taxes and progressive state income tax rates that work well for various income levels. Tax credits for education and energy-efficient home improvements provide additional savings.
Businesses thrive here thanks to incentives targeting industries like manufacturing, aerospace, and technology. Entrepreneurs find the state’s low operating costs and skilled workforce a major advantage for growth.
Retirees benefit from exemptions on Social Security and certain retirement income, which helps stretch their savings. Combined with affordable healthcare and housing, Alabama offers financial security without sacrificing quality of life.
Winning the Tax Game

At the end of the day, taxes can make or break your financial game plan. Choosing the right state isn’t just about where you live, it’s about how much you get to keep.
The difference between a tax-friendly state and a high-tax one could mean thousands of dollars back in your pocket every year. That’s money you can invest, save, or spend on things that actually matter to you.
So, if you’re serious about building wealth, don’t just think about where you want to live, think about where your money lives best.
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