It's not what you earn, it's what you keep that often dictates your standard of living. With that in mind, take this quick tour of the ten cities in the nation that have the lowest overall tax burden. These cities came out on top (er, at the bottom, really) of the 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey for the largest city in each state, plus D.C.
Tax rankings are based on 2007 tax return computations for a two-income couple earning $75,000 with one school age child. The real property tax is a function of housing values, real estate tax rates, assessment levels, homeowner exemptions and credits. The auto tax figure assumes the couple owns two cars and is based on the estimated registration fees, state and local gasoline taxes, and personal property taxes, if any.
No. 1 Anchorage, Alaska
Income tax: $0
Property tax: $2,572
Sales tax: $0
Auto tax: $165
STATE & LOCAL TAX BURDEN: 3.6%
(National median tax burden: 8.5%)
Urban Facts: Taxes? Residents of Anchorage actually receive an annual "dividend" payment derived from levies on state oil drilling operations.
In sheer geographic size, the city of Anchorage is larger than the state of Rhode Island. It is home to 42% of all Alaskan residents.
Sponsored Content
No. 2 Manchester, New Hampshire
Income tax: $0
Property tax: $2,349
Sales tax: $0
Auto tax: $493
STATE & LOCAL TAX BURDEN: 3.8%
Urban Facts: New Hampshire's favorable tax structure and Manchester's proximity to Boston makes it an attractive residence for flinty New Englanders.
Sponsored Content
No. 3 Cheyenne, Wyoming
Income tax: $0
Property tax: $1,326
Sales tax: $1,512
Auto tax: $665
STATE & LOCAL TAX BURDEN: 4.7%
Urban Facts: Levies on mining and oil account for nearly half of the Equality State's tax revenues. Cheyenne is in close proximity to the geographical center of North America.
Sponsored Content
No. 4 Seattle, Washington
Income tax: $0
Property tax: $1,698
Sales tax: $1,561
Auto tax: $457
STATE & LOCAL TAX BURDEN: 5.0%
Urban Facts: Seattle may be a tax-friendly city, but it also has a high cost of living, well above the national average.
The median home sales price was $375,000 for last quarter of 2008, compared to $200,000 at the national level.
Sponsored Content
No. 5 Las Vegas, Nevada
Income tax: $0
Property tax: $2,251
Sales tax: $1,072
Auto tax: $486
STATE & LOCAL TAX BURDEN: 5.1%
Urban Facts: Gaming taxes account for 27% of the state's general revenue funds.
The city's rapid growth a few years ago that drew more than 5,000 new residents every month was propped up on subprime lending. Now Las Vegas has the highest foreclosure rate among U.S. cities.
Sponsored Content
No. 6 Jacksonville, Florida
Income tax: $0
Property tax: $2,456
Sales tax: $1,284
Auto tax: $195
STATE & LOCAL TAX BURDEN: 5.2%
Urban Facts: The state intangibles tax on certain investments was repealed in 2007.
Jacksonville is the third-most populous city on the East Coast, after New York City and Philadelphia. (Other cities such as Boston, Washington, D.C., and Miami have larger metropolitan area populations.)
Sponsored Content
No. 7 Sioux Falls, South Dakota
Income tax: $0
Property tax: $2,760
Sales tax: $1,518
Auto tax: $294
STATE & LOCAL TAX BURDEN: 6.1%
Urban Facts: In fiscal year 2007, lottery gaming put $110 million in the state till to provide a 30% property-tax relief.
Sioux Falls has the largest shopping center between Minneapolis and Denver.
Sponsored Content
No. 8 Phoenix, Arizona
Income tax: $1,241
Property tax: $1,401
Sales tax: $1,849
Auto tax: $588
STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Tax information for Phoenix includes the entire metropolitan area which extends to cities of Scottsdale, Mesa, Tempe, Mesa, Chandler, Gilbert, Glendale and Peoria. But housing prices and local tax can vary significantly from locality to locality.
Sponsored Content
No. 9 Billings, Montana
Income tax: $2,559
Property tax: $1,865
Sales tax: $0
Auto tax: $689
STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Billings taxpayers with adjusted gross incomes of less than $30,000 can exclude up to $3,600 of their pension income from state taxes.
Dubbed locally as the "Magic City," Billings is supporting growth by dunning its energy, agriculture, and transportation industries.
Sponsored Content
No. 10 Chicago, Illinois
Income tax: $2,019
Property tax: $1,023
Sales tax: $1,624
Auto tax: $478
STATE & LOCAL TAX BURDEN: 6.9%
Urban Facts: Chicago's effective real-estate tax rate of .70% and various exemption programs keep real property tax low. Just keep in mind that this surprisingly tax-friendly city doesn't offer the same breaks for other cost-of-living expenses.
SOURCE: 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey
Sponsored Content
-
Stock Market Today: Markets Waver as Inflation Continues to EaseStocks gave up early gains as waning consumer price inflation leaves rate-cut bets essentially unchanged.
-
October CPI Report Hits the Mark: What the Experts Are Saying About InflationCPI While the current pace of rising prices appears to have leveled off, the expected path of rate cuts has become less certain.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
Five Cities With the Lowest Property Tax in the U.S.Property Tax Property taxes are ultra-low in these popular metro areas, but is housing affordable?
-
IRS Expands Tax Breaks for Breast Cancer Screenings, ContraceptivesHealthcare Now you can get a tax deduction or reimbursement for certain medical expenses, like over-the-counter birth control and condoms.
-
Colorado Sending Billions in TABOR RefundsState Tax Are you receiving a TABOR refund with your 2025 Colorado state income tax filing? Don’t miss the deadline.
-
Adoption Tax Credit 2024: What You Need to KnowTax Credits The federal adoption tax credit is slightly higher for 2024. Here’s what you can claim under the tax break designed to help grow your family.
