Yahoo Finance 9 Cheapest States To Live in With No Income Tax
Do you know which states across America are the most affordable states to live in without any income tax?
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To find out, GOBankingRates identified and ranked the cheapest states without income tax by calculating state-level annual expenditure estimates using national average expenditures and each state’s cost-of-living index. Additionally, we provided average costs for groceries, housing, utilities, transportation and healthcare, using the same indices.
These are the cheapest states to live in with no income tax in descending order.
9. Alaska
Cost-of-living index: 125.2
Annual cost of necessities: $48,679
Annual expenditure: $91,355
Even though Alaska doesn’t have any income tax, you’ll still pay more than the national average for your major expenses. One of the biggest expenses is for utilities, which are approximately 58% higher than the national average. Groceries are also a big expense at approximately 24% higher than the national average. These higher costs have a lot to do with the state’s location.
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8. Washington
Cost-of-living index: 116.0
Annual cost of necessities: $44,740
Annual expenditure: $84,642
Groceries are about 10% above the national average in Washington. However, utility costs are about 8% lower.
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7. New Hampshire
Cost-of-living index: 114.1
Annual cost of necessities: $83,255
Annual expenditure: $44,740
Groceries in New Hampshire are just 2% higher than the national average. However, out of all your major living expenditures, you’ll pay the most for utilities. They run 31% higher than the national average.
6. Nevada
Cost-of-living index: 101
Annual cost of necessities: $39,430
Annual expenditure: $73,697
The cost-of-living index in Nevada is just 1% higher than the national average. Utilities are about 1% lower than the national average, while healthcare is about 8% lower.
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5. Florida
Cost-of-living index: 100.7
Annual cost of necessities: $38,072
Annual expenditure: $73,478
Groceries in Florida are about 0.5% lower than the national average. Utilities and transportation and healthcare all are less than the national average by one to four percentage points.
4. Texas
Cost-of-living index: 92.7
Annual cost of necessities: $34,121
Annual expenditure: $67,640
The majority of the cost-of-living expenses in Texas are below the national average. Groceries are about 4% lower and housing is approximately 13% lower. The only cost that exceeds the national average is healthcare, which is 4% higher.
3. South Dakota
Cost-of-living index: 92.4
Annual cost of necessities: $34,648
Annual expenditure: $67,421
If you move to South Dakota, all of your cost-of-living expenses will be less than the national average. For example, utilities are about 12% lower than the national average and groceries are 3% lower.
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2. Wyoming
Cost-of-living index: 92.4
Annual cost of necessities: $33,845
Annual expenditure: $67,422
Three out of five cost-of-living expenses are lower than the national average in Wyoming — namely housing, utilities and transportation. Even so, groceries are just 2% above the national average and healthcare is only a tenth of a percent higher.
1. Tennessee
Cost-of-living index: 90.3
Annual cost of necessities: $33,060
Annual expenditure: $65,889
Tennesse ranks as the cheapest state without income tax on the list. All cost-of-living expenses are lower than the national average. Groceries are 2% lower than the national average, while housing is approximately 18% lower. Additionally, utilities are 7% lower; transportation is 11% lower; and healthcare is 12% lower.
Heather Taylor contributed to the reporting for this article.
Methodology: In order to find the cheapest states to live in with no income tax, GOBankingRates first isolated those 9 states with no income tax. Then found (1) the national average annual expenditures as sourced from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey data. Then, GOBankingRates created (2) state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost of living index score for 2023 from the Missouri Economic Research and Information Center. All qualifying states were then ranked with No. 1 being the state with no income tax that is the cheapest to live in. GOBankingRates provided supplemental information on the average annual cost of groceries, housing, utilities, transportation, and healthcare in each qualifying state by again using MERIC’s cost of living indices for each category to factor out national estimates from the CEX. All data was collected on and up to date as of April 30, 2024.
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This article originally appeared on GOBankingRates.com: 9 Cheapest States To Live in With No Income Tax
