When people retire, they often find themselves living on a fixed retirement income. With the costs of food and gasoline steadily rising, retirees need to protect every penny of their monetary retirement benefits. One way they can do this is by living in one of the nine states that impose no income tax that would reduce their retirement checks.
New Hampshire has no personal income taxes that would reduce a retirement check. The state does levy a 5 percent tax on dividend and interest income, but it offers exemptions to help offset the tax amount. In 2009, however, New Hampshire had the third-highest property taxes in the nation.
Florida has no income tax and does not tax retirement benefits. Florida charges 6 percent sales tax, and local municipalities can add additional taxes to that percentage. Florida has no state property tax, but local municipalities assess and collect their own property taxes.
Tennessee has no personal income tax on retirement benefits. Dividend and interest income are taxed at 6 percent. Sales tax is 7 percent, which above the national average of 6 percent. Tennessee property is taxed at local levels instead of by the state.
Alaska has no state income tax or sales tax of any kind. Instead, local municipalities levy their own sales tax. Real estate and personal property are taxed at the state and local levels. Alaska’s property taxes in 2009 were the 10th-highest in the nation.
South Dakota has no state personal income tax. The sales tax rate of 4 percent is well below the 6 percent national average. South Dakota taxes property at the local level. In 2009, the amount of per capita property taxes collected in South Dakota was lower than 32 other states.
Washington state has no income tax that would reduce a retirement check. The sales tax is 6.5 percent, just over the 6 percent national average. Washington state levies property taxes at the state and local levels and collects more in property taxes than most other states.
Nevada has no personal income taxes that would reduce a retirement check. Likewise, Nevada has no corporate income tax. The sales tax is 6.85 percent and local municipalities can tack additional taxes onto that rate. Nevada collects property tax at the state and local levels.
Texas has no personal or corporate income taxes. Instead, Texas charges a 6.25 percent sales tax. In 2009, Texas property taxes were the 14th-highest in the nation. Property taxes are assessed at the local level only.
Wyoming has no personal income tax or corporate tax. Sales tax is a low 4 percent. However, in 2009, Wyoming’s property taxes were the the 4th-highest in the nation. Property taxes are collected at the state and local levels.
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