Photo: Nora Carol Photography / Moment / Getty Images
FLORIDA - A recent WalletHub study suggests that Florida remains one of the most tax-friendly states in the nation, ranking among the lowest for state and local tax rates.
According to the report, Florida has an effective total state and local tax rate of 8.67% for the median U.S. household.
This places the Sunshine State at No. 8 among states with the lowest tax burdens.
When adjusting for cost of living, Florida moves up even further, securing the No. 6 spot.
The state also ranks at the bottom for income tax and vehicle property tax, meaning residents pay little to nothing in those categories.
However, Florida’s ranking isn’t as favorable in real estate property taxes, where it lands at No. 24 nationwide.
The study found that Alaska has the lowest combined state and local tax rate at just 6.77%, while Illinois residents bear the heaviest tax burden at 16.58%.
WalletHub’s analysis shows that residents of high-tax states often pay more than double what those in low-tax states pay.
Despite not having a state income tax, some states still impose significant financial burdens on residents through other means.
For example, Washington state citizens allocate nearly 9% of their income to sales and excise taxes, while Texas residents spend 1.58% of their income on real estate taxes—one of the highest rates in the country.
In contrast, California residents face almost 6% in sales and excise taxes but only 0.71% in real estate taxes.
Florida’s relatively low tax burden allows residents to retain more of their income compared to people in high-tax states.
This is particularly beneficial in times of inflation when every dollar counts.
However, while Florida’s tax structure is favorable, other factors such as property taxes and the overall cost of living should still be considered.
As April 15th approaches, Floridians can take comfort in the fact that they live in one of the most tax-friendly states in the country.
While taxes are inevitable, Florida’s system makes them a little easier to manage compared to many other states.