Tax-Friendly Places 2007

See how much you'll play in income, sales and property taxes around the country.

Most tax friendly states - Top 5
State State and local tax burden as % of income
Alaska 6.6%
New Hampshire 8.0%
Tennessee 8.5%
Delaware 8.8%
Alabama 8.8%
Least tax friendly states - Top 5
State State and local tax burden as % of income
Vermont 14.1%
Maine 14.0%
New York 13.8%
Rhode Island 12.7%
Ohio 12.4%
Source: Bureau of Economic Analysis, Census Bureau and Tax Foundation
Tax friendly states
Fed up with your tax bill? Maybe you should consider moving to Alaska.

For the 17th year in a row, the far Western state earned the distinction of being America's most tax-friendly state, according to an annual report published by the Tax Foundation, a nonprofit fiscal policy research group.

Comparing the average taxpayer's total state and local tax burden for 2006 in each of the 50 states and the District of Columbia, Alaska residents had the lightest tax burden across the country.

That burden reflects what residents pay in state and local income taxes, property taxes, sales taxes, luxury taxes and fuel taxes, among others. It also factors in the portion of business taxes passed along to state residents through higher prices, lower wages or lower profits.

So what makes Alaska so tax friendly? Alaskan residents don't have to pay income or state sales tax. They even get tax refunds from the government because of the excess revenue it collects from companies extracting oil from the state. Overall, residents' state and local tax burden comes to 6.6 percent of their income.

That's a far cry from Vermont whose residents pay 14.1 percent of their income to state and local taxes.
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