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2022 State Tax Rankings... Time for You to Move?

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Taxes and regulation

MJ DeMarco

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Part of the reason why I moved to Utah from Arizona... AZ continues to slowly slide lower, and lower, and lower. Happy to see Utah in the top ten, albeit, just barely. Nevada was a consideration but I have zero trust in their state government, on top of strict Covid protocols (endangering its core business of casinos), my guess NV will be out of the top ten by 2025 as they target the "evil rich" who are using the state as a tax shelter.



The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida and Tennessee have no individual income tax; and New Hampshire and Montana have no sales tax.


This does not mean, however, that a state cannot rank in the top 10 while still levying all the major taxes. Indiana and Utah, for example, levy all of the major tax types, but do so with low rates on broad bases.

Sometimes the best business decision you can make doesn't involve business, but a Uhaul and a roadtrip.
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FNeu

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Thanks for sharing this.

I am originally from Colorado, born and raised. I moved to Texas April of this year for no income tax for my real estate business/investments... But as I get into more of a true business with different ideas I have and researching and learning about everything associated with taxes, no income tax doesn't make much of a difference. I'll probably end up moving to a different state. I like traveling and moving around anyway.

Edit: After looking at more specifics in the article, it looks like I would have been better off staying in Colorado if I would have known the differences and benefits of corporate taxes
 
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AmazingLarry

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That feel when you're #47. Sucks cause all my family is here and I don't want to move out of New England. Might be buying my father in law's New Hampshire house in the next couple years and seeing this just gives me more incentive.
 

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That feel when you're #47. Sucks cause all my family is here and I don't want to move out of New England. Might be buying my father in law's New Hampshire house in the next couple years and seeing this just gives me more incentive.
I’m sure CT is great if you’re already super wealthy. Love NH though, beautiful place and such a chill atmosphere
 

becks22

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I have actually decided to move in 3 years (goal to sell company before my 32nd birthday) and moving from 49 to a top state. I think that will work out in my favor.
 
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Gabbe18

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How big is tue actual difference in taxes between for example the 1st and 50th position? I mean it's the same country after all.
 
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MJ DeMarco

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How big is the actual difference in taxes between for example the 1st and 50th position? I mean it's the same country after all.

Big. So big that moving is a well worth it.

For example, the property taxes on my home in Utah is $10,200 per year.

Drop this same exact house/property in 20 other states (like New Jersey, or California) and the property taxes would be $60,000-$100K per year. So living here in the lap of luxury saves me minimally $50,000 alone in property taxes. This doesn't even account for sales taxes and income taxes which would bring the tax savings up beyond six-figures... all because I refuse to live in a state that views productive entrepreneurs as livestock waiting to be milked.
 

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How big is tue actual difference in taxes between for example the 1st and 50th position? I mean it's the same country after all.
I had a client save $90k in state income tax by not being a resident of the same state in 2020 as they were for 2019.
 
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Gabbe18

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Big. So big that moving is a well worth it.

For example, the property taxes on my home in Utah is $10,200 per year.

Drop this same exact house/property in 20 other states (like New Jersey, or California) and the property taxes would be $60,000-$100K per year. So living here in the lap of luxury saves me minimally $50,000 alone in property taxes. This doesn't even account for sales taxes and income taxes which would bring the tax savings up beyond six-figures... all because I refuse to live in a state that views productive entrepreneurs as livestock waiting to be milked.
Wow! That is a significant difference! I appreciate the response. I having been thinking about moving to the US, specifically Nashville because of its music scene (I am a big music fan), but I never really took the tax difference between the states into consideration. Mainly because in Sweden the difference in taxes is not that big in terms of location so I thought it would be roughly the same in the US.

Luckily Tennessee seems to be a tax friendly state though!
 

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I've been traveling abroad the last two years - and will return to the US in 2022.
What state I setup residency is a vital question.

I want:
a) state with low income / corporate taxes
b) high personal freedom
c) airport with many non-stop flights
d) good weather


I'm pretty sold on Texas, but Florida is also free these days.
(Passes weather test so long as you are not in either for May-October!)

Montana, Wyoming, SD: I'd love to, but, the weather is nice for 3 months, and you can't travel easily without connecting.

--
The more we ALL vote with our feet, the sooner the high-tax states will fail, and the low tax ones will propser.
 

MJ DeMarco

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Luckily Tennessee seems to be a tax friendly state though!

Tennessee is in the top tier, but has some wonky business use tax. Still a good choice.

I'm pretty sold on Texas

Texas is great except for property taxes... my home in TX would have $60K in property taxes, but I would benefit from zero state income taxes, so there's some partial offset.
 
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watchopt

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Thank you for posting this. I'm not to much into luxury and don't mind occasional need to camp either. But to more align with travel, is anyone aware of something similar to this breakdown, probably less official, of the rankings for the ones with (developing) a fast-laner mindset without the fast-laner wealth? Nearly broke. Almost without. Perhaps one that list columns such as: Gov Land Availability, Recreation Fac Avail, Kindness rank, library, access, weather, food cost, .... List more columns if you think of any so I can cipher search and/or begin to build one.

If anything this excercise will help 'keep one small inside' which I think is a virtue.

J
 

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New Jersey (most lifetime taxes) vs West Virginia (least lifetime taxes) > $600k difference in lifetime taxes. That's for an average person. Imagine how much more for a successful entrepreneur. All that money down the drain.
 

ohmamecr

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[URL unfurl = "true"] Life of Tax: How Much Tax is Paid Over a Lifetime | Self. [/ URL]

Nueva Jersey (más impuestos de por vida) vs West Virginia (menos impuestos de por vida)> $ 600k de diferencia en impuestos de por vida. Eso es para una persona promedio. Imagínese cuánto más para un emprendedor exitoso. To


New Jersey (most lifetime taxes) vs West Virginia (least lifetime taxes) > $600k difference in lifetime taxes. That's for an average person. Imagine how much more for a successful entrepreneur. All that money down the drain.
lol it's crazy, I live in Spain and being a civil servant is very incentivized but you get crushed if you start (if a self-employed person makes 300k they literally rob him of 47%, and the more money you make the more they take away but the maximum is 47%) but there is a Next country called Andorra, I love it because it does not have a beach and it is mountainous, which I love and not to say that it is full of entrepreneurs and youtubers and people with ambition, at the end of the day in Spain as in most countries The western notion has hit hard and that touches my balls and it sucks.
In addition, to enter Andorra they ask you for 30k (they will give you back the day you leave although nobody usually leaves) so it is full of people with money, athletes, cyclists, etc. I am 17 years old and my goal is to go there when I have my business in a few years

What do you think about that? the worst thing is that most of the Spanish people get angry when they see the entrepreneurs leave as if they should give them something
 
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Gabbe18

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New Jersey (most lifetime taxes) vs West Virginia (least lifetime taxes) > $600k difference in lifetime taxes. That's for an average person. Imagine how much more for a successful entrepreneur. All that money down the drain.
It's fascinating that the tax difference is so big depending on where you live within the same country!
 

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Tennessee is in the top tier, but has some wonky business use tax. Still a good choice.



Texas is great except for property taxes... my home in TX would have $60K in property taxes, but I would benefit from zero state income taxes, so there's some partial offset.
Yes. The property taxes here are brutal. Although I prefer it to an income tax. At least I get to choose how much house I live in, and therefore how much I feed the enemy. The only way around it here is an agriculture exemption. Which is the plan for our Texas home.

We want to build on acreage and do something agricultural on the land. Then your price per square footage is compared with the county average. So if it’s a 10k square foot mansion, with no comps, it’s taxed per sq footage with the likes whatever junk is in the area, just proportionally larger. Like 5x 2k square foot double wides in a cheap a$$ county.

Even so, It’s possible that we could build our dream home 3x the size of this place and pay less per year in taxes with an ag exemption. But we are also in a high tax gated country club neighborhood so it only goes down from here.
 

Bekit

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Thank you for posting this. I'm not to much into luxury and don't mind occasional need to camp either. But to more align with travel, is anyone aware of something similar to this breakdown, probably less official, of the rankings for the ones with (developing) a fast-laner mindset without the fast-laner wealth? Nearly broke. Almost without. Perhaps one that list columns such as: Gov Land Availability, Recreation Fac Avail, Kindness rank, library, access, weather, food cost, .... List more columns if you think of any so I can cipher search and/or begin to build one.

I've heard that Montana is one of the best states in terms of entrepreneurship.

The state has more entrepreneurs per capita than any other state and a business survival rate (businesses that survive their first five years) that ranks in the top 10. [source]

They would likely also have a ton of camping and government land. Check out Glacier National Park, for instance. If you were near a city, you'd have a library. Weather would be cold. But the cost of living would be way cheaper. I found a 2 bed, 1 bath house for $70,000 on a random Zillow search just now in the first page of results. Where I live, an equivalent house would be $300,000+.

As a bonus, they're the 5th best state in the country for taxes, according to MJ's original post above.

By the way - you should totally build a ranking system of the best places for developing a fastlaner mindest without the fastlaner wealth. That's brilliant!
 
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MJ DeMarco

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Amazing, even with a multi-billion dollar surplus, CALIFORNIA wants to double taxes.

And guess who will fill the largest portion of the bill? Entrepreneurs and business owners with a gross receipts tax.

Wonder when fair-minded entrepreneurs will wake up and refuse to be treated like livestock.

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MTF

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Amazing, even with a multi-billion dollar surplus, CALIFORNIA wants to double taxes.

And guess who will fit the largest portion of the bill? Entrepreneurs and business owners with a gross receipts tax.

Wonder when fair-minded entrepreneurs will wake up and refuse to be treated like livestock.

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LOL this place seems to be hell-bent on destroying itself. I can't imagine any sensible entrepreneurs NOT planning to escape as soon as possible.

Another fun tax from California: California — Stop the Solar Tax

Sure, talk about how eco-friendly you want to be and penalize people who actually want to use renewable energy.
 

loop101

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I'm now looking at Nevada or Montana. Wyoming and Utah are probably better, but cannabis is still illegal. I guess everyone in Utah is not worried about the Wasatch Fault that runs through all the bigger cities.
 
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