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By Katelyn Washington
last updated
If you hate paying taxes, and you want to keep more of your income, you might consider moving to one of these states that have a relatively low tax burden for middle-income families. After all, the cost of living for families considered to be “middle-class” is high enough as it is, and who doesn’t want to pay less taxes?
'Tax Friendly' States for Middle-Income Families
Median salaries can differ greatly from state to state, so we considered each state's median annual salary to determine which states have the lowest tax burden for households with middle incomes. Then, we calculated the average annual tax spent for three tax categories: state income tax, property taxes, and sales taxes on essential items (groceries, diapers, and feminine hygiene products).States with the lowest tax burden are considered to be "tax-friendly " for these rankings.
Sales tax was not calculated for states that don't tax essentials at the state level. However, it is important to note that local sales taxes may apply. The states with the lowest percentage of income spent on state taxes made our list. And here they are.
Note: See below for full details about the methodology Kiplinger used to rank the states for this story.
1/10
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Wyoming
Median annual household income: $70,042
Percent of income spent on taxes: 2.15%
Wyoming taxes some essentials such as diapers and feminine hygiene products. Even so, no state income tax and reasonable property taxes (when compared to those in other states) place Wyoming as the highest rated on our list for middle-income households, when it comes to low tax burden.
- Average income tax: $0
- Median annual property taxes: $1,442
- Average sales tax for essentials: $62.03
- Total annual amount spent on taxes: $1,504.03
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2/10
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Nevada
Median annual household income: $72,333
Percent of income spent on taxes: 2.50%
Most states still tax diapers, and Nevada is one of them. However, the state has banned sales tax on some feminine hygiene products. No personal income tax and low property taxes relative to other states, make Nevada an overall tax-friendly state for middle-income families and households.
- Average income tax: $0
- Median annual property taxes: $1,736
- Average sales tax for essentials: $74.12
- Total annual amount spent on taxes: $1,810.12
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3/10
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Tennessee
Median annual household income: $65,254
Percent of income spent on taxes: 2.75%
Tennessee taxes diapers and feminine hygiene products. It is also one of 13 states that still tax groceries. However, the state does not have a personal income tax, and property taxes are on the low end when compared to those in other states, so Tennessee comes in at number three in our ranking.
- Average income tax: $0
- Median annual property taxes: $1,270
- Average sales taxes on essentials: $524.90
- Total annual amount spent on taxes: $1,794.90
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4/10
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Florida
Median annual household income: $69,303
Percent of income spent on taxes: 3.1%
Florida has no personal income tax. Additionally, a Florida tax relief bill eliminated the state sales tax on numerous baby and toddler essentials, including diapers, baby wipes, and strollers. The bill also eliminated sales tax on some feminine hygiene products. Average property taxes are not extremely high, but they aren’t extremely low either as compared to those in other states. Florida doesn’t tax groceries.
- Average income tax: $0
- Median annual property taxes: $2,143
- Average sales tax on essentials: $0
- Total annual amount spent on taxes: $2,143
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5/10
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North Dakota
Median annual household income: $71,970
Percent of income spent on taxes: 3.48%
North Dakota does have a personal income tax, but the rates for middle-class households are low compared to most other states that impose income tax. North Dakota property taxes are reasonable, and the state no longer taxes diapers. North Dakota still imposes a sales tax on feminine hygiene products, but overall, it’s still one of the best states for middle-income families when it comes to paying less taxes.
- Average income tax: $396
- Median annual property taxes: $2,092
- Average sales tax on essentials: $16.89
- Total amount spent on taxes: $2,504.89
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6/10
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Alaska
Median annual household income: $88,121
Percent of income spent on taxes: 3.93%
Alaska doesn’t have a personal income tax, and it doesn’t have a statewide sales tax either. However, local tax tax jurisdictions may tax groceries, diapers and feminine hygiene products. Alaska winds up in the middle of our ranking due to its high property taxes.
- Average income tax: $0
- Median annual property taxes: $3,464
- Average sales tax on essentials: $0
- Total amount spent on taxes: $3,464
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7/10
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South Dakota
Median annual household income: $69,728
Percent of income spent on taxes: 4.07%
South Dakota taxes essential items, including diapers, feminine hygiene products, and even groceries. Property taxes in South Dakota are not very low either compared to those in other states. But because the state has no state income tax, South Dakota makes the number seven spot for tax-friendly states for middle-income families and households.
- Average income tax: $0
- Median annual property taxes: $2,331
- Average sales tax on essentials: $506.49
- Total amount spent on taxes: $2,837.49
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8/10
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Washington
Median annual household income: $91,306
Percent of income spent on taxes: 4.23%
Washington has high property taxes when compared with other states. Washington taxes diapers, too, but the state still makes this list since the state has no personal income tax.
- Average income tax: $0
- Median annual property taxes: $3,752
- Average sales tax on essentials: $106.92
- Total amount spent on taxes: $3,858.97
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9/10
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Arizona
Median annual household income: $74,568
Percent of income spent on taxes: 4.34%
Arizona has a state income tax. The state also taxes diapers and feminine hygiene products. But there is no state tax on groceries, and Arizona’s average property taxes aren’t very high compared to those in other states, so Arizona takes the number seven spot on this list.
- Average income tax: $1,491.36
- Median annual property taxes: $1,648
- Average sales tax on essentials: $95.43
- Total amount spent on taxes: $3,234.79
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10/10
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Texas
Median annual household income: $72,284
Percent of income spent on taxes: 4.87%
Texas does not impose a state income tax, and the state no longer taxes essentials either. Still, higher property taxes cause the Lonestar State to barely make this list, at number ten. However, voters recently approved a new Texas property tax relief measure that might give the state a more favorable ranking in the future.
- Average income tax: $0
- Median annual property taxes: $3,520
- Average sales tax on essentials: $0
- Total amount spent on taxes: $3,520
Middle-Class Income and Taxes
Full Methodology
Median annual household salaries for each state were collected from the latest U.S. Census Bureau data (most recent data available). Personal income taxes were calculated using an ADP salary calculator. We used monthly pay periods and opted not to factor in extra withholdings or allowances. Income taxes paid vary from filer to filer and can depend on your income, filing status, and the number of credits and deductions you qualify for when filing your taxes.
Total average grocery costs were calculated by averaging the average grocery spending by high and low-income households as reported by the U.S. Department of Agriculture. The average monthly diaper expense is based on estimates from the National Diaper Bank Network. The average cost of feminine hygiene products was taken from the National Organization for Women. We used sales tax rates (average combined local and state sales tax rates) provided by the Tax Foundation to calculate the average sales taxes spent on essential items. Tax spent on essential items may be higher than $0 in some localities, even if essentials aren't taxed at the state level.
The data for median annual property taxes paid is from PropertyShark and is based on data provided by the U.S. Census Bureau.
Average taxes spent were added for each state to find the total percentage of household income paid to state taxes. Dollar amounts were rounded to the nearest cent. Percentages are rounded to the nearest tenth of a percent.
To determine what “middle income” means, the median household income for each state was used. However, the definition of “middle-income” can vary greatly. For purposes of this ranking, “family” means any household with at least one adult still raising at least one child. The amount of taxes paid can vary depending on several factors, including family size and the number of adults in the household who work.
Related Content
-The 'Food Tax': Grocery Tax by State
-States With the Lowest Property Taxes
-States That Still Tax Diapers
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Katelyn Washington
Tax Writer
Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.
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