Top 10 Tax-Friendly Towns

Category: Best Retirement Towns and States

Every so often US News & World Reports goes through its database and comes up with another “Top 10″ List. This time their efforts have produced one dear to all tax-fearing hearts, the 10 most tax-friendly towns in America. After all, you can’t do anything about federal taxes, but you can vote with your feet and move to a low tax town or city.

The US News list is an interesting one, will almost all of the towns in the west. Most made the list because there is no state income tax or some other tax absence.

* Billings Montana
* Cheyenne, WY
* Doral, FL
* Henderson, NV
* Juneau, AK
* Manchester, NH
* Nashville, TN
* Sioux Falls, SD
* Spokane, WA
* Stafford, Texas

Tennessee and New Hampshire only tax dividends on interest and dividend incomes, which is partially why Nashville and Manchester made the list. Stafford, Texas has the unusual distinction of having abolished its property tax, in addition to not having an income tax. Nashville is an example of a city with a good property tax relief program for seniors (it freezes them at a base level), along with the entire state of Florida.

Any town in a state that doesn’t have an income tax or a sales tax is going to be tax-friendly. There are 7 states that don’t charge an income tax, and 5 with no sales tax. Only 1 state has neither tax, and that one is Alaska (a state that actually pays residents to live there, thanks to its enormous natural resources). Cities sometimes impose one of these taxes even if the state does not have it. Property tax is the other tax that really whacks retirees, since this one is not related to income in any direct way. Some states offer significant freeze programs and other types of tax relief for seniors – they can be extremely valuable.

Of course being tax-friendly is not the entire picture. If you have to move far away from friends and family just to save some money, it might not be worth it. For many folks, watching their grandchildren grow up is worth the extra expense. For another, other expenses can more than make up for taxes. Juneau Alaska is very expensive (as is everyplace in Alaska), although the cost of living comes out to about average when you factor in paying no taxes and actually getting a tax payment.

For further reference:
Most Tax-Friendly States

Posted by Admin on December 2nd, 2008

22 Comments »

  1. “Of course being tax-friendly is the entire picture. ”
    Given the contents of the ensuing paragraph, Admin meant “is NOT the entire picture”.

    by richard — December 9, 2008

  2. Richard, Thanks for letting me know about this important error. Appreciate you taking the time to correct this

    by Boomer1 — December 11, 2008

  3. New Hampshire does not have an income tax or a sales tax. This guy might want to do a little more research.

    by Jeff — April 4, 2009

  4. Jeff, Thanks for the comment. Actually New Hampshire has a fairly unique tax position. It does not have a state sales tax. It does have an income tax, but it is only on interest and dividends (so wages are not taxed).

    by Admin — April 4, 2009

  5. Are there any places in Florida where you will not be bothered with twisters, hurricanes or tornadoes?

    by joanie thompson — April 17, 2009

  6. :roll: I was looking for the new retirement community in Oregon. I saw it in our newspaper last week and now can’t find the article. Any suggestions?

    by Carol — June 7, 2009

  7. I am thinking of retiring to Georgia as it seems tax friendly for seniors. Any comments regarding Georgia and seniors would be helpful

    by barbara — February 20, 2010

  8. […] 7 Reasons Not to Retire in These 4 States With Some States in Trouble, Be Careful Where You Retire Top 10 Tax-Friendly Towns What Are the Best States for Retirement All Blog […]

    by » The Best of the Best Places to Retire Topretirements — May 18, 2010

  9. You have Juneau, AK on your list, but I think that Anchorage, AK would be a better place in Alaska for this list.

    by Giosue — November 12, 2010

  10. You have Juneau, AK on your list. I live here and must disagree about it being an economical place to live in retirement, airfare alone is a shocker. It costs less to fly from Seattle, WA to the East Coast, than it does to fly from Juneau to Seattle. The cost of housing is still way over the top and unaffordable. Fuel, both heating and at the gas pump is higher than anyplace in Alaska (and most places in the lower 48). I am from a two income household and we have descent incomes. We are very frugal in our lifestyle, and still struggling. It is a beautiful place, mountains on one side and the ocean on the other, hiking, boating, and fishing are really incredible. The downsides are, the weather, Juneau is a rain forest. It’s cold and wet in the long winters, and cool and wet in the summers. There are no roads to drive out, travel by Air or Alaska Marine Highway Ferry System are our only options, and expensive. If you don’t mind long cold dark wet winters, cooler and wet summers, expensive living and isolation, in a political / tourist capital city. You’ll love it here. I am nearing retirement and will no longer be able to afford to live here. I have been in Juneau 25 years, and will miss it. I am looking to find a more economical place to live in our retirement; I can imagine finding a place that will compare to Juneau and still be affordable. :sad:

    by Lover of Alaska — February 18, 2011

  11. Is Asheville, NC area a good and cheep retirement place?

    by Sunnythe3rd — September 22, 2011

  12. You ever BEEN to Stafford, Texas? ReallY?

    by peter — December 9, 2011

  13. Lover of Alaska try living in Fairbanks. Our fuel and electricity are much higher than Juneau’s.

    by Hollis — April 22, 2012

  14. @Joanie Thompson, “Are there any places in Florida where you will not be bothered with twisters, hurricanes or tornadoes?” Answer: The town of Ocklawaha, FL is nestled where what you have are heavy thunderstorms but inland enough and next to Lake Weir that the weather is not as threatening as you find on the coasts or in south Florida. Also, taxes are friendly! It’s worth investigating: do the research — check out south Marion County!

    by Neil S. Schuster — April 23, 2012

  15. Joanie,

    Check out the stats for hurricanes in NE Florida at NOAA (National Oceanic and Atmospheric Administartion). You’ll be very pleasantly surprised at NE Florida’s record of hurricanes. With cooler water in the northern part of Florida combined with the shape of Florida in that area, the incidence of hurricanes is low. I live there, and it was one of the things I checked out before relocating to that area.

    Jan Cullinane, The New Retirement: The Ultimate Guide to the Rest of Your Life (Rodale)
    The Single Woman’s Guide to Retirement (John Wiley & Sons, October 2012)

    Jan Cullinane

    by Jan Cullinane — April 24, 2012

  16. Joanie Thompson, There is no where in Florida that is safe from hurricanes or tornadoes. It is a matter of when. So far the 14 years I have lived in Fl. I have never seen one but they have been a few miles away. A couple years ago The villages had a tornado and the villages is inland just like “Marion County”. Thank God they don’t hit 1 area all the time and Fl. is a large state so I guess we have got lucky so far since we have been here. A few years ago we lived by Tampa Bay and we had to evacuate as a big storm was coming. 1000’s of people went inland to Orlando and the storm hit farther south down the gulf from TB and whet right into Orlando where tons of people evacuated too. Hope this helps….

    by Kathy — April 25, 2012

  17. Jan Cullinane, I like to learn and find new web sites I have not been on. I went to the NOAA site but I could not figure out how to find info on there like you were saying to check out the NE part of Fl. Can you tell me what I have to click on to find areas? THANKS! Kathy

    by Kathy — April 25, 2012

  18. Look at Figure 6 on this site: http://www.aoml.noaa.gov/hrd/Landsea/history/Figures1565-1898.htm#fig2

    There is more data on the NOAA site, but this link will show you graphically how little NE Florida has been affected by hurricanes.

    by Jan Cullinane — April 26, 2012

  19. Jan, Thanks for the link…We have been lucky. Hopeing we stay lucky!

    by Kathy — April 26, 2012

  20. We live in Ohio.both newly retired.would like to move to no.c,so.c or . Scared to make the move ; not sure where to go.need help on deciding

    by maureen north — May 9, 2014

  21. Maureen, two questions for you:
    Do you have any friends who live in NC or SC?
    Have you ever been to either state before?
    I moved to NC for work 24 years ago and would say that having people you know close by is important. Personally, if I were starting from scratch, I would choose SC because of the taxes and the fact that it is a more conservative state which corresponds to my beliefs but that is just me.
    I lived in the Cincinnati area. The area of NC I live in has lots of people from NY, NJ, Conn who want the area to be like the area they came from. It isn’t going to happen. As many people have said before, you need to visit the area you are considering and spend some time there.

    Good luck….

    by Dick — May 10, 2014

  22. Dick…even the area I came from isn’t like it used to be! I know I can not afford to go back to north NJ and do not think I want to now. I have lived in seven different states and more than one area in a few. I liked Chapel Hill, NC and did not like Wilmington, NC so like everybody else, I say spend some time there.

    However, if you liked the area you came from…hopefully, you liked the people too…and you get some of the same type of people and some diversity as well.

    by Elaine — May 11, 2014

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