Are You Living in One of the Fastest-Growing Low-Tax States?

People relocate for many reasons, personal and professional, but the latest report from the Tax Foundation on the most popular U.S. destination states suggests three big factors rule: lower cost of living, lower taxes, and plenty of sunshine.

Of the top ten destinations in the report, most but not all have comparatively low state taxes. Most have lower housing costs than the East Coast and West Coast states. Seven out of the ten states are located firmly in the Sun Belt.

The Tax Foundation report issued in January 2025 was based on U.S. Census Bureau data gathered from July 1, 2023, through June 30, 2024.

Key Takeaways

• The top destination, South Carolina, has a 6% state sales tax and a top state income tax rate of 6.2% but relatively modest home prices.
• Other states on the list of top destinations include Idaho, Delaware, North Carolina, Tennessee, Nevada, Alabama, Montana, Arizona, and Arkansas.
• Many of the top destination states are located in the Sun Belt, offering both sunshine and financial benefits.
• Alabama had the lowest housing costs on the list, with an average home price of $228,101 in 2024.

#1 South Carolina

South Carolina’s population grew by 1.26% from 2023 to 2024, according to U.S. Census data. United Van Lines listed this state at #3 in its 48^th Annual National Movers Study released in January 2025.

The Tax Foundation ranked South Carolina’s overall tax burden at #33 out of 50 in its 2025 State Tax Competitiveness Index, with #1 being the best state and #50 being the worst. South Carolina’s state sales tax rate is 6.00%. Its top marginal individual income tax rate is 6.2%.

The average house price in South Carolina was $297,794 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#2 Idaho

Idaho is #2 on the Tax Foundation’s most moved-to list with a 0.83% growth rate. Realtor.com puts it at #5, however.

The median listing price for a home here is $579,900 as of January 2025 with an average monthly house payment of $3,040.

You’ll have to save some tax dollars to live comfortably here. Tax Foundation places Idaho’s overall tax burden at a fairly competitive #11.

Its state sales tax rate matches South Carolina’s at 6.00% but its top marginal individual income tax rate is a bit lower at 5.695%.

The average house price in Idaho was $454,300 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#3 Delaware

Delaware saw a growth rate of 0.79% from 2023 to 2024, according to the Tax Foundation report. United Van Lines placed this state at #2 on its list noting that more than 50% of the newcomers were age 65 and older and 12% were arriving from New York.

Delaware’s top personal income tax rate is 6.60% on incomes over $60,000 although this drops to 5.55% on incomes under $60,000. The state has no state or local sales taxes.

The average house price in Delaware was $388,163 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#4 North Carolina

South Carolina’s neighbor to the north comes in at #4 on the Tax Foundation migration list at 0.76%.

Realtor.com puts the median home listing price in North Carolina at $428,750 with an average monthly payment of $2,248. United Van Lines gives the state its #5 spot.

North Carolina is kind to its residents when it comes to taxes. It’s a flat tax state so the same rate applies to everyone regardless of income. The rate was 4.50% for tax year 2024 and that’s a reduced rate from the year before. The state’s sales tax rate is 4.75% but county rates can add to that.

The average house price in North Carolina was $330,819 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#5 Tennessee

Tennessee saw an inbound rate of 0.68% according to the Tax Foundation report.

The state has no income tax. Its combined state and local sales tax rate is pretty significant at 9.55%. The state portion of that is a cringeworthy 7.0%.

Tennessee nonetheless comes in at #8 on the Tax Foundation 2025 State Tax Competitiveness Index thanks to its lack of an income tax.

The average house price in Tennessee was $321,434 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#6 Nevada

Nevada is #6 on the Tax Foundation report. It’s another state that doesn’t impose an income tax. It’s #17 on its 2025 State Tax Competitiveness Index.

The state-level sales tax rate is 6.85% but local jurisdictions can add on their own.

The average house price in Nevada was $443,203 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#7 Alabama

Alabama comes in at #7 on the Tax Foundation inward migration list. It’s #6 on the United Van Lines National Movers Study.

Alabama’s combined state and local sales tax rate is a walloping 9.29%. The state-level sales tax makes up just 4.0% of that total so where you buy can save you some money.

Alabama is known for its very low property tax rates. The highest income tax rate is 5% on taxable income of over $3,000 for single filers and $6,000 for married taxpayers who file joint returns.

The average house price in Alabama was $228,101 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#8 Montana

Montana takes the #8 spot on the Tax Foundation Census data list.

They’re not going there for the income tax breaks. Fidelity Investments indicates that this state imposes some of the highest income tax rates in the country on personal income as of December 2024.

Nonetheless, Montana comes in at #5 on the Tax Foundation 2025 State Tax Competitiveness Index. The state’s top marginal individual income tax rate is 5.9% as of 2025. Montana doesn’t have a general-use sales tax, however, making it more tax-friendly overall.

The average house price in Montana was $468,194 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#9 Arizona

Arizona is #9 on the Tax Foundation Census data list. The state comes in a spot lower at #10 on the United Van Lines 2024 National Movers Study.

Arizona offers a very friendly flat income tax rate of just 2.5%, a new development as of tax year 2024. The state sales tax rate is up there at 5.6%, and Arizona cities can level sales taxes as well.

The average house price in Arizona was $431,491 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

#10 Arkansas

Arkansas comes in at #10 on the Tax Foundation list.

Its combined state and local sales tax rate is 9.45%, with 6.5% of that going to the state.

This state has cut its top individual income tax rate to 3.9% from 4.4%, however.

Tip

Realtor.com indicates that the median listing price of Arkansas homes is $285,000 with an average monthly payment of about $1,494.

The average house price in Arkansas was $209,250 in 2024, compared to an average house price of $773,362 in California and $394,728 in Florida, according to Norada, a real estate investors’ site.

The Bottom Line

The migration to these states reflects a growing preference for affordable living, lower taxes, and favorable climates. By understanding state taxes, you can better decide what location best suits your financial needs.