If you’re a high earner, where you live has a lot to do with what you owe the government.
WalletHub generated estimates of the state-specific tax burden on residents earning at least $150,000 by using 2018 data from the Institute on Taxation & Economic Policy.
"It’s important to note that our analysis does not focus on tax rates but rather on the share of a person’s income that he or she contributes toward various tax obligations," the report stated. "For instance, tax rates may be lower in one state, but because of a comparatively higher cost of living, the actual tax burden may be higher for that state’s residents."
The ranking includes all taxes that a state resident would pay, including sales, excise, property and income taxes, according to WalletHub.
The following, in ascending order, are WalletHub’s 10 best states to be wealthy:
10. Delaware
Delaware has six different income tax brackets, ranging from 2.2 percent to 5.95 percent, and does not assess a state sales tax. If you live in Delaware, you’ll pay 6.88 percent of your annual income in state taxes.
9. Alabama
Since Alabama’s tax structure generates the most revenue from consumer spending, property taxes there are the lowest in the country. If you earn $150,000 or more per year, you’ll pay just 6.31 percent of your annual income in state taxes.
8. North Dakota
North Dakota has had a budget surplus every year since 2008, thanks to an oil boom, and is a leader in job growth. That’s good news for the state’s high earners, who pay just 6.01 percent of their annual income in state taxes.
7. New Hampshire
There is no state sales tax or income tax in New Hampshire, so it should come as no surprise that it has one of the highest per capita number of millionaires in the country. If you live in New Hampshire, you’ll pay just 5.87 percent of your annual earnings in state taxes.
6. South Dakota
South Dakota is one of seven states that do not have a personal income tax, and at 4.5 percent to 6.5 percent, its sales taxes range among the lowest in the U.S. If you make your home in South Dakota, you’ll pay just 5.76 percent of your annual earnings in state taxes.
5. Florida
There is no personal income tax in Florida, and the state sales tax is only six percent. If you are a Florida resident, you’ll pay just 5.45 percent of your annual earnings in state taxes.
4. Tennessee
Tennessee’s tax on dividends and interest will be phased out by the year 2021, but in the meantime, the wealthy will pay only 5.11 percent in combined state taxes on their earnings of $150,000.
3. Wyoming
Wyoming does not have an individual or corporate income tax, and since 2016 the state no longer requires beneficial owners of limited liability corporations to be disclosed upon filing. That makes it a tax haven. If you earn $150,000 in Wyoming, you’ll pay a scant 5.03 percent in combined state taxes.
2. Nevada
Nevada wants new residents and businesses, so it has no personal income tax or corporate income tax. Instead, tourists and consumers subsidize state and local spending. If you earn $150,000 in Nevada, you’ll pay 4.31 percent of your earnings in combined state taxes.
1. Alaska
Alaska is one of five states with no state sales tax; one of seven states with no personal income tax; and with New Hampshire, one of only two states that have neither. In fact, residents receive annual checks from the government just for living there. If you earn $150,000 in Alaska, you’ll pay 3.01 percent of combined state taxes.
The full report can be viewed here.
