10 Most Tax-Friendly States for Middle-Class Families

10. Delaware Taxes

• State Income Tax Range: 2.2% (on taxable income from $2,001 to $5,000) to 6.6% (on taxable income above $60,000)
• Average Combined State and Local Sales Tax Rate: No state or local sales tax
• Median Property Tax Rate: $533 per $100,000 of assessed home value

Delaware's income tax is relatively high for our hypothetical middle-class family. The state's top income tax rate of 6.6% hits anyone with more than $60,000 of taxable income, which is a comparatively high rate for people in that income range.

However, low sales and property taxes earn Delaware a spot on our list of the most tax-friendly states for middle-class families. Sales taxes can't get any lower than they are in The First State – there's no sales tax in Delaware! So, you can shop 'til you drop in Delaware without paying a single penny of sales tax on your purchases.

When it comes to property taxes, Delaware has the ninth-lowest median property tax rate in the nation. As a result, the tax on a $300,000 home owned by our hypothetical family is estimated to be just $1,599 per year.

For more information on these and other Delaware state and local taxes, see the Delaware State Tax Guide (opens in new tab).

9. California Taxes

• State Income Tax Range: 1% (on taxable income up to $10,099 for single filers; up to $20,198 for joint filers) to 13.3% (on taxable income over $1 million for single filers; over $1,354,550 for joint filers)
• Average Combined State and Local Sales Tax Rate: 8.82%
• Median Property Tax Rate: $707 per $100,000 of assessed home value

Wait, what? California is a tax-friendly state? Yes…for middle-class families. If you're a rich person, California taxes will cut deep into your earnings. But for other people, the Golden State's tax hit isn't really all that bad.

Our hypothetical middle-class family's income tax bill was the lowest among states that impose an income tax. Everyone makes a big deal about California's 13.3% income tax rate, which is the highest top rate in the nation, but only a small percentage of Californians pay that rate. In fact, with 10 different tax rates, California has a very progressive income tax system. Our middle-income family, for instance, only fell into the state's 6% tax bracket, and the vast majority of their income was taxed at lower rates (1%, 2% or 4%). That's not too bad.

Although property taxes are sky high in Silicon Valley and certain other parts of the state, the median property tax rate is below average for the state overall. For a $300,000 home in California, the statewide estimated property tax is only $2,121, which is the 17th-lowest amount in the country.

Sales tax is one area where Californians might pay more than residents of other states. The California state sales tax rate is 7.25%, which is the highest state rate in the nation. However, local sales taxes – up to 2.5% – aren't very high. The Tax Foundation calculates the average combined state and local rate to be 8.82%, which is high.

For more information on these and other California state and local taxes, see the California State Tax Guide (opens in new tab).

8. Arizona Taxes

• State Income Tax Range: 2.55% (on taxable income up to $28,653 for single filers; up to $57,305 for joint filers) to 2.98% (on taxable income over $28,653 for single filers; over $57,305 for joint filers)
• Average Combined State and Local Sales Tax Rate: 8.37%
• Median Property Tax Rate: $508 per $100,000 of assessed home value

Low income taxes are what put the Grand Canyon State on this list. Middle-income families like our hypothetical taxpayers don't pay the state's lowest rate (2.55%) for 2022, but they don't pay much more because the highest rate is only 2.98% (there are only two Arizona income tax rates for the 2022 tax year). Plus, beginning in 2023, an even lower flat rate of 2.5% applies.

Arizona residents benefit from low property taxes, too. The median property tax on a $300,000 home in the state is estimated to be only $1,524 per year, which is the 6th-lowest median property tax in the country for a home at that price point.

The state's sales tax is higher than average, though. It starts with a 5.6% state sales taxes. However, all 15 counties levy additional taxes, as do many municipalities. As a result, the average combined state and local sales tax rate is 8.37%, which is the 11th-highest in the U.S., according to the Tax Foundation.

For more information on these and other Arizona state and local taxes, see the Arizona State Tax Guide (opens in new tab).

7. Washington Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 9.29%
• Median Property Tax Rate: $836 per $100,000 of assessed home value

The only reason why Washington makes this list is because it doesn't have an income tax. Without that tax break, the Evergreen State certainly wouldn't be considered one of the most taxpayer-friendly states in the nation. [Note that, beginning in 2022, Washington will impose a 7% tax on the sale or exchange of certain long-term capital assets if the profits exceed $250,000 annually. However, the constitutionality of the tax is being challenged in the courts. A lower court has ruled the tax is unconstitutional, but the Washington Supreme Court has put the lower-court ruling on hold until it can address the matter.]

Sales taxes in Washington are pretty high. The state sales tax rate is 6.5%, which is well above average. Plus, at 9.29%, the Tax Foundation's average combined state and local sales tax rate for Washington is the fourth-highest in the country.

Property taxes in Washington are more modest. For a $300,000 home, the median property tax bill in the state will run you about $2,508 per year. That's a middle-of-the-pack amount when compared to other states.

For more information on these and other Washington state and local taxes, see the Washington State Tax Guide (opens in new tab).

6. Alaska Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 1.76%
• Median Property Tax Rate: $1,171 per $100,000 of assessed home value

Like Washington, Alaska is one of the six states on this list that don't impose an income tax for anyone. Obviously, your overall state tax burden is going to be low if you're not paying tax on your wages and other common forms of income.

However, there's more to the Last Frontier's low tax burden than just the lack of an income tax. Alaska is one of five states with no state sales tax. If you're heading north to Alaska, just remember that local sales taxes – up to 7.5% – might apply. But, according to the Tax Foundation, the statewide local sales tax average is only 1.76%.

Property taxes are bit on the high side in Alaska. If our hypothetical couple were to purchase a $300,000 home in the state, their estimated property tax bill would come to about $3,513 per year. That's above the U.S. national average.

There's one other thing about living in Alaska that's worth noting: Alaska gives each legal resident who has lived in the state for a full year an annual "Permanent Fund Dividend." The 2022 dividend was $3,284, which is the highest payment ever.

For more information on these and other Alaska state and local taxes, see the Alaska State Tax Guide (opens in new tab).

5. North Dakota Taxes

• State Income Tax Range: 1.1% (on taxable income up to $41,775 for singles filers; up to $69,700 for joint filers) to 2.9% (on taxable income over $458,350)
• Average Combined State and Local Sales Tax Rate: 6.96%
• Median Property Tax Rate: $949 per $100,000 of assessed home value

Even though North Dakota imposes an income tax, its income tax rates are relatively minuscule, especially for mid-level earners. Plus, for the 2022 tax year, every resident qualifies for a nonrefundable tax credit of up to $350 ($700 for a married couple). As a result of the low rates and temporary credit, our hypothetical middle-class family wouldn't owe any North Dakota income taxes.

Sales taxes in the Peace Garden State are below average, too. The state rate is a modest 5%. Local governments can add as much as 3.5%. However, according to the Tax Foundation, the average combined state and local sales tax rate is 6.96%, which isn't too bad.

While not dirt cheap, property taxes in North Dakota are quite reasonable. The tax on a $300,000 home is estimated to be $2,847 per year. That's slightly below the national median property tax for a home costing that much.

For more information on these and other North Dakota state and local taxes, see the North Dakota State Tax Guide (opens in new tab).

4. Tennessee Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 9.547%
• Median Property Tax Rate: $560 per $100,000 of assessed home value

There's no income tax in the Volunteer State. There used to be a tax in Tennessee on interest and dividend income, but that expired at the end of 2020 (the tax rate was 1% in its final year).

Property taxes in Tennessee are reasonable, too. Our hypothetical middle-class family can expect to pay only about $1,680 per year for a $300,000 home. That's well below the national average.

Tennessee sticks it to you when you're shopping, though. It starts with a 7% state rate (plus 2.75% on part of the price from $1,600 to $3,200 of single items), but then local governments can tack on up to 2.75% more in taxes on each sale. At 9.547%, Tennessee's average combined state and local sales tax rate is the second-highest in the nation, according to the Tax Foundation. Ouch!

For more information on these and other Tennessee state and local taxes, see the Tennessee State Tax Guide (opens in new tab).

3. Florida Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 7.01%
• Median Property Tax Rate: $804 per $100,000 of assessed home value

Florida is another state with no income tax. (Are you starting to notice a trend here?) That keeps the overall state and local tax burden down for middle-class families and everyone else who can establish residency in Florida. However, other taxes in the Sunshine State are just average when compared to other locations.

For instance, property taxes are fairly close to the national average. For a $300,000 home in Florida, our hypothetical middle-class family's estimated annual property tax bill is $2,412. That's pretty much in the middle when compared to other states.

The state's average combined state and local sales tax rate is middle-of-the-road, too. It's 7.01%, according to the Tax Foundation. That's based on a 6% state tax rate and local rates that can be as high as 2%.

For more information on these and other Florida state and local taxes, see the Florida State Tax Guide (opens in new tab).

2. Nevada Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 8.23%
• Median Property Tax Rate: $484 per $100,000 of assessed home value

Middle-class families in Nevada love the fact that there's no income tax in the state. It's like hitting the jackpot on your favorite slot machine. But that's not the only tax perk for residents of the Silver State.

Nevada also has the third-lowest median property tax rate in the country. So, if our hypothetical middle-class family owned a $300,000 home in the state, they would only pay an estimated $1,452 in property taxes each year.

Sales taxes in Nevada aren't so low, though. There's a relatively high 6.85% state sales tax rate. Then, when you add in local taxes, the average combined state and local sales tax rate shoots up to 8.23%, which is the 13th-highest in the country.

For more information on these and other Nevada state and local taxes, see the Nevada State Tax Guide (opens in new tab).

1. Wyoming Taxes

• State Income Tax Range: None
• Average Combined State and Local Sales Tax Rate: 5.36%
• Median Property Tax Rate: $545 per $100,000 of assessed home value

Congratulations, Wyoming – you're the most tax-friendly state for middle-class families! First, there's no income tax in Wyoming. As with many of the other states on this list, that's the driving force behind the state's favorable ranking. However, what makes Wyoming unique is that it also has both low sales taxes and property taxes.

The state sales tax rate in Wyoming is a modest 4%. Municipalities can tack on up to 2% more, which isn't that much. As a result, the state's combined state and average local sales tax rate is the eighth-lowest in the country, according to the Tax Foundation.

People who move to these parts like to own a lot of land, and low property taxes help make that dream affordable. The property tax on our hypothetical middle-class family's $300,000 home in Wyoming would be about $1,635, which is tied the 10th-lowest property tax amount in our rankings.

For more information on these and other Wyoming state and local taxes, see the Wyoming State Tax Guide (opens in new tab).

About Our Methodology

Our tax maps and related tax content include data from a wide range of sources. To generate our rankings, we created a metric to compare the tax burden in all 50 states and the District of Columbia.

Data Sources

Income tax – Our income tax information comes from each state's tax agency. Income tax forms and instructions were also used. Unless otherwise noted, the rates and threshold amounts listed are for the 2022 tax year. See more about how we calculated the income tax for our hypothetical family below under "Ranking method."

Property tax – The median property tax rate is based on the median property taxes paid and the median home value in each state for 2021 (the most recent year available). The data comes from the U.S. Census Bureau (opens in new tab). By using data on taxes actually paid and median home values, differences between the cost of housing from one state to another are factored into the equation (although the median property tax rate is still a statewide figure).

Sales tax – State sales tax rates are from each state's tax agency. We also cite the Tax Foundation's (opens in new tab) 2022 average combined sales tax rate, which is a population-weighted average of state and local sales taxes. In states that let local governments add sales taxes, this gives an estimate of what most people in a given state actually pay, as those rates can vary widely.

Ranking Method

The "tax-friendliness" of a state depends on the sum of income, sales and property tax paid by our hypothetical family.

To determine income taxes due, we prepared tax returns for each state and the District of Columbia for a married couple with two dependent children, an earned income of $77,000, long-term capital gains of $1,500, qualified dividends of $1,000, and taxable interest of $500. They had $4,500 in state income taxes withheld from their wages. They also paid $3,000 in real estate taxes, paid $2,800 in mortgage interest, and donated $2,300 (cash and property) to charity. We calculated these 2021 returns using software from Cash App Taxes (opens in new tab) (adjustments were made to account for certain 2022 tax law changes).

How much they paid in sales taxes was calculated using the sales tax deduction tables in the instructions for federal Schedule A (Form 1040) (opens in new tab) and the Tax Foundation's (opens in new tab) 2022 midyear average combined sales tax rates.

How much the hypothetical family paid (and deducted on their income tax return) in property taxes was calculated by assuming a residence with $300,000 assessed value and then applying each state's median property tax rate to that amount.