Tired of feeling in a tight spot come tax time? You’re not alone. According to a recent Pew Research report, just over half of Americans believe they pay “more than their fair share” in taxes.
Fortunately, you could have a say over how much the taxman takes if you’re willing to relocate. But you should consider a state’s overall tax landscape before making a move.
For instance, some states make up for low income taxes with higher taxes in other areas, like sales and property tax rates — making you perhaps no better off than you were before relocating, tax-wise.
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Kiplinger found the one U.S. state that may offer the best balance of low income, sales, and property taxes for your family’s wallet. Here it is.
The most tax-friendly state for the middle class
To determine the “most tax-friendly state for the middle-class,” Kiplinger considered each state’s median annual salary to determine which states have the lowest tax burden for households with middle incomes.
Then, we calculated the average annual tax spent on three tax categories: state income tax, property taxes, and sales taxes on essential items (groceries, diapers, and gas). (See the end of the article for more information about methodology.)
The state with the lowest tax burden is considered the most “tax-friendly ” for these rankings.
Best state for middle-class taxes
Nevada.
Nevada has no state income tax, which is just one reason it’s the most tax-friendly state for middle-class families. Among the many types of income that you’ll find tax-exempt in the Silver State are:
Plus, Nevada residents save on property tax bills, too. The annual median property tax paid in the Silver State is $2,143, which is about $1,000 less than the national average, according to the latest U.S. Census Bureau data.
- This is partly due to Nevada’s effective property tax rate of .49%, per the Tax Foundation, which is one of the lowest rates in the nation.
- Plus, Nevada has a property tax abatement law that caps yearly increases on property taxes for primary residences, protecting homeowners from sudden hikes.
What’s even better is that the Silver State is one of the few states that don’t tax inheritance or estates, meaning more money for your heirs is also tax-exempt.
But even though these tax benefits generally outweigh the tax cons in our ranking, like all states, there may be a few tax reasons you wouldn’t want to move to Nevada. Let’s go over those next.
(Image credit: Getty Images)
Nevada taxes for middle-class families
Nevada has low taxes compared to other states, yet there is one primary tax caveat that may raise an eyebrow for middle-class families.
- The Nevada sales tax rate is 6.85%, which may be higher than where you are living now.
- This is especially true when you factor in local taxes, which average 1.39%, for a combined average local and state tax rate of 8.24%, per the Tax Foundation.
Yet while Nevada may levy higher sales taxes to compensate for lower taxes in other key areas, several essentials are exempt from the Silver State’s high sales tax rate.
- Nevada has one of the lowest state gas tax rates in the U.S., which may help reduce your weekly commuting expenses (though local taxes can raise the rate).
- Groceries, diapers, prescription medicine, and feminine products are all tax-exempt in Nevada, which may further reduce your monthly spending.
So, if most of your annual spending is on essentials, you may save on your state sales taxes even if the Nevada rate is a little higher than where you currently reside.
Is Nevada a good state for middle-class families?
Of course, before you’re ready for a move to Nevada, there are other important factors to consider.
While Kiplinger’s ranking considered state tax burdens, you’ll probably want to research other key considerations, like cost of living, political climate, and crime rates.
- For instance, Nevada is famously known for extreme heat, which may increase your monthly utility bill. Plus, the state’s desert geography makes the transportation of goods more challenging and limits local agriculture compared to most other states. Because of this, the cost of groceries may be higher than where you live now.
- Yet year-round sunshine supports Nevada’s thriving outdoor recreation scene, with a variety of national parks, and, of course, entertainment centers like Las Vegas.
- However, Nevada typically receives a lower score in national rankings that compare pre-K-12 education quality and outcomes.
Ultimately, consider your family’s unique lifestyle and financial needs before deciding to move to a new locale. Just because Nevada is generally the most tax-friendly state for middle-class families, it may not be the most optimal state for you and your family.
Note: No matter where you move, federal income taxes still apply, and local taxes may vary. The definition of “middle-income” can also differ greatly. For purposes of this ranking, “family” means any household with at least one adult still raising at least one child. The amount of taxes paid can vary depending on several factors, including family size and the number of adults in the household who work. Full details about the methodology Kiplinger used to rank state tax burdens for this story are available in Kiplinger’s report, Low-Tax States for ‘Middle-Class’ Families in 2026.
