Which state suits you? 13 states compared

When you move to the USA, you don't move to America, you move to one of 50 states. That state decides whether a second tax comes off your salary, how big the property tax bill on your house is and what a dollar buys at the checkout. This comparison puts 13 states side by side, using figures from the tax authorities, the Census Bureau and the Bureau of Economic Analysis.

When you move to the USA, you don't move to America, you move to one of 50 states. That state decides whether a second tax comes off your salary, how big the property tax bill on your house is and what a dollar buys at the checkout. This comparison puts 13 states side by side: the four big destination states Texas, Florida, California and New York, plus Hawaii and Montana, which our readers ask about especially often, and seven more states that levy either no income tax or a low one, or have a large population of German descent. Every figure comes from an official source, usually a tax authority, the Census Bureau or the Bureau of Economic Analysis, with the year and source listed below the table.

1Where you live and where your company is: two separate decisions

Before we get to the numbers, here is a distinction many people only learn after the move. The state where your company is formed and the state where you live are two different things. A company can be registered in Delaware or Wyoming while you live in Florida. For your personal income tax, your property tax, your children's school and your driver's license, only your state of residence counts. How to choose your company's home state is covered in our article Which US state is best for your company, and which taxes the state you do business in levies is explained under Your US company and your state of residence.

This page compares states as a whole. Within one state, a big city and a small town are often worlds apart. Which metro areas lead economically is shown in our article Where in America is the best place to live?, and where your money still stretches to a house with a yard, in our list of the ten best small towns in the USA. Which visa suits you is a separate question; our article on US visa types gives you the overview.

2Income tax: from zero to over twelve percent

You pay the same federal income tax to the IRS everywhere. On top of that, most states levy their own income tax, and this is where the models differ widely. Our 13 states fall into three groups.

2.1States with no tax on wages

Texas, Florida, Nevada and Tennessee levy no income tax on salaries. The Texas Comptroller puts it simply: Texas has no state income tax. The Florida Department of Revenue states that Florida has no personal income tax, so there is no filing requirement either. In Nevada, residents pay no state tax on wages and salaries. Tennessee long had the Hall Tax on interest and dividends; it no longer applies for tax years beginning on or after January 1, 2021.

Washington only partly belongs in this group. The state levies no tax on wages, but in 2021 it enacted a 7% tax on long-term capital gains from stocks, bonds or business interests above the standard deduction (2025: $278,000). From tax year 2025, a surcharge of 2.9 points applies to the portion above $1 million, for a total of 9.9%. And with Senate Bill 6346, the legislature passed a 9.9% income tax that applies from January 1, 2028 to taxpayers with adjusted annual income above $1 million. If you're moving to Washington with a large portfolio, you should know this.

2.2States with a flat rate

Arizona charges a flat 2.5%, North Carolina 3.99% (4.25% for 2025), Colorado 4.4% and Georgia 4.99%. Montana has two brackets: 4.7% on the first $47,500 and 5.65% above that, for single filers in tax year 2026. North Carolina, Georgia and Montana lowered their rates from 2025 to 2026, which is why the table shows the tax year for each rate.

2.3States with graduated rates

California starts at 1%, and the top rate of 12.3% kicks in for single filers at $742,953 of taxable income. On the portion above $1 million, a 1% Behavioral Health Services Tax is added, for a total of 13.3%. Hawaii ranges from 1.4% to 11%, with the top bracket starting at $325,000 for single filers. New York charges 4% to 10.9%, although the top bracket only applies from $25 million. If you live in New York City, you also pay the city's income tax, whose rates start at 3.078%. How federal and state tax add up on your own return is covered in our article on the US tax return for Europeans, and why the price at the register in America is higher than on the tag is explained in our article on sales tax.

3Property tax: the bill that comes every year

A state without income tax pays for schools, roads and police some other way, and the most important one is property tax. In the US it is levied mainly by counties, cities and school districts, in some states such as Washington by the state itself as well, and it is based on the assessed value of your home. If you rent, you pay it through your rent.

To make the states comparable, we take two figures from the Census Bureau's 2024 American Community Survey: the median value of owner-occupied homes and the median property tax their owners pay each year. Divide one by the other and you get an effective rate. It is an approximation, not a tax rate, because every county sets its own rate, and exemptions for owner-occupied homes lower the bill.

The result partly turns the income tax ranking upside down. In Texas, the typical homeowner pays $4,108 a year on a home worth $313,200, an effective 1.31%. In New York it is $6,542 on $449,800, an effective 1.45%. Hawaii, by contrast, comes in at just 0.27% with $2,385 on a home worth $875,900, and Arizona and Tennessee sit at 0.43% and 0.45%. For a renter this matters less, but for a buyer with a large house, property tax can eat up a good part of the income tax saved. What else to watch for when buying property as a foreigner is covered in our article on buying real estate in the USA.

4Price levels: what a dollar is worth in each state

There is an official measure for price levels: the Bureau of Economic Analysis's Regional Price Parities. They show how expensive overall consumption is in a state, measured against a US average of 100. The agency published the 2024 figures on February 19, 2026. The most expensive states overall were California at 110.7, Hawaii at 110.0 and New Jersey at 108.8, the cheapest Arkansas at 86.9 and Mississippi at 87.0.

In our selection, Tennessee is the cheapest at 91.9, ahead of North Carolina at 94.3 and Montana at 94.6. Texas sits just below average at 97.1, Florida above it at 103.4. Housing makes the biggest difference. The rent index is 154.3 in California and 79.1 in Tennessee. A salary that comfortably covers life in Nashville gets tight in the Los Angeles area, without much change in taxes or grocery prices.

These figures are averages across an entire state. Austin is more expensive than the rest of Texas, Miami more expensive than the rest of Florida. You'll find an everyday price comparison between Germany, the UK and Austin in our cost of living list, and what health insurance costs by state in our article on health insurance by age.

5Climate and natural hazards

The 13 states range from high mountains to the tropics. Average temperatures matter less for your decision than three questions: How hot does summer get, how long is winter, and which natural hazard calls this place home?

On the Atlantic and Gulf coasts, hurricane season runs from June 1 to November 30, according to the National Hurricane Center. That affects Florida, the Texas coast, Georgia and North Carolina. If you buy there, find out before you sign what storm and flood insurance will cost and whether the house sits in a flood zone. Arizona and Nevada are desert states: in the south the summers are long and very hot, while winters at higher elevations in the north can turn cold. Colorado and Montana have real winters with plenty of snow in the mountains. Western Washington is mild and rainy, the east is dry. Hawaii is warm all year, but it lies thousands of kilometers from the mainland, which makes every flight, every shipping container and many goods more expensive. California and New York are so large that they span several climate zones.

Climate also drives your utility bills. The federal index for utilities such as electricity stands at 190.2 in Hawaii and 72.1 in Tennessee, against a US average of 100. Air conditioning in the South, heating in the North: budget for both.

7When a state treats you as a resident

Each state decides under its own law who it treats as a tax resident, and the rules vary from state to state. If you move from California to Texas, document the move carefully: lease or purchase contract, new state driver's license, vehicle registration, voter registration for US citizens, bank address. For newcomers from Europe, this matters most in the year of the move, when part of the year is still spent at home. Our article on the year of the move in your US tax return explains how that first year works for tax.

If you later leave a state with an income tax, you also have to end your residency there. Our article State tax after you move away explains what to watch out for.

8How to make your choice

There is no ranking that works for everyone. A high-earning employee who rents gains the most from a state with no income tax. A buyer with a large house and a middle income may do better in a state with low property tax and a moderate income tax. A family will put the school district above everything else, a retiree health insurance and climate. So work through it in this order:

• Write down your expected income by type: salary, profit from your company, investment income, pension. In Washington, investment income is an issue, salaries are not.
• Decide whether you will buy or rent, and work out the property tax on a house of the size you are looking for.
• Take housing costs seriously. The differences between states are far bigger here than for tax.
• Check climate, natural hazards and insurance for the region, not the state.
• Ask yourself how far away your consulate, an airport with connections to Europe and a community from your home country can be.
• Go there before you sign anything. A few weeks on the ground tell you more than any table.

We have listed the other costs you can expect before and after the move under What does moving to the USA cost, and the overall pros and cons of life in America under Moving to the USA: pros and cons. Coming with children? You will find the rules on visas, school and family benefits under Moving to the USA with children.

In short

• Texas, Florida, Nevada and Tennessee levy no income tax on wages; Washington taxes capital gains and has passed a tax on income above $1 million for 2028.
• At the other end are California at up to 13.3%, Hawaii at up to 11% and New York at up to 10.9%, with a city tax on top in New York City.
• Property tax often flips the ranking: in Texas and New York the effective rate is above 1.3%, in Hawaii it is 0.27%.
• On price levels, Tennessee is the cheapest at 91.9 and California the most expensive at 110.7; the biggest gap is in housing.

How we help you

• Your US Tax ReturnForm 1040 or 1040-NR, handled in English.
• Moving to the USAVisa, bank account, taxes and where to live: your move with Mount Bonnell Advisors.
• Visa RoadmapIn writing: which visa fits you and your family, prepared with the immigration attorney on the firm's team.
• US Tax ConsultationYour US tax question, answered by people who know both sides.