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Posted on: April 18, 2019

Tennessee #1 in HireAHelper’s ‘True Tax Burden’ Study

Tennessee

Tennessee ranked #1 in dollar-for-dollar tax burden ($1,970) and #3 effective state tax rate (4.5%) in HireAHelper’s true tax burdens study. In order to calculate the rankings, HireAHelper surveyed mean wage data, state income taxes, sales taxes (state/local), and property taxes to estimate the true tax burden for a typical resident in all 50 states and the District of Columbia.

“Investigating state and local taxes is an important step in a resident’s decision of whether to move — or where. When comparing possible moving destinations, these tax expenses should be given the same consideration as the local job market and wages, costs of living, and school zones,” said lead researcher Elyssa Kirkham.

The study also found that where you choose to live could cost you up to $7,760 per year in additional local taxes. That’s the difference between the highest estimated state and local taxes in the District of Columbia, at $9,730, and Tennessee with $1,970.

“There are 50 states (plus D.C.) and each has its own local tax code, not to mention local and municipal taxes — and each is unique. On top of the three types of taxes we looked at (income, property and sales taxes), you might also face taxes at the gas pump or corporate and vendor taxes if you run a business. So if you move to a different state or even another city, you should expect it to affect the taxes you pay,” said Kirkham.

Here are the top 10 states with the lowest dollar-for-dollar tax burdens: 

  1. Tennessee: $1,970
  2. Nevada: $2,002
  3. South Dakota: $2,112
  4. Florida: $2,131
  5. Alaska: $2,274
  6. North Dakota: $2,617
  7. Texas: $2,859
  8. Washington: $2,886
  9. Louisiana: $3,027
  10. Wyoming: $3,095

And, here are the top 10 states for ‘effective tax rate’: 

  1. Alaska: 3.94%
  2. Nevada: 4.45%
  3. Tennessee: 4.52%
  4. Florida: 4.76%
  5. Washington: 5.02%
  6. South Dakota: 5.18%
  7. North Dakota: 5.44%
  8. Texas: 5.87%
  9. New Hampshire: 6.10%
  10. Delaware: 6.11%

Methodology

HireAHelper surveyed state income taxes, state and local sales taxes, and property taxes in all 50 states and the District of Columbia to estimate the total tax burden for a typical resident. State income taxes were calculated based on each state’s mean wage data from the Bureau of Labor Statistics’ May 2017 National Occupational Employment and Wage Estimates, using SmartAsset’s income tax calculator. Sales taxes were calculated based on average combined and local sales taxes 27.5%

About HireAHelper

HireAHelper is an online marketplace for hiring hourly mover labor anywhere in the United States. HireAHelper has 1,000 service providers in all 50 states and conducts more than 65,000 moving jobs each year.

View Full Findings of Tax Study (Link)
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