The Tax Foundation's recent report draws attention to the most attractive states for relocation in the U.S., with the top features being a lower cost of living, reduced state taxes, and a desirable climate. The foundation used data from the U.S. Census Bureau, which was gathered from July 2023 through June 2024.
The report highlighted that South Carolina, with an affordable average house price of $297,794 and a population growth rate of 1.26% from 2023 to 2024, ranked third in the Most Popular U.S. Destinations list. The state also holds rank #33 in the overall tax burden, with a state sales tax rate of 6.00%.
Idaho followed right behind with a growth rate of 0.83%. It ranked #11 in the overall tax burden, matching South Carolina's state sales tax rate. However, its top marginal individual income tax rate is slightly lower at 5.695%.
Delaware, another favored state, had a growth rate of 0.79%. It is particularly popular with individuals aged 65 and older, and has no state or local sales taxes.
North Carolina and Tennessee also made the top ten, offering significant tax benefits. North Carolina practices a flat tax rate structure and Tennessee does not implement an income tax.
The sunny states of Nevada and Arizona known for their absence of income tax, and Alabama with its notably low property tax rates also made the list.
Rounding off the list was Montana, offering no general-use sales tax, and Arkansas, manifesting a decreased top individual income tax rate from 4.4% to 3.9%.
A pattern emerges from this data, indicating that people are prioritizing affordable living conditions, reduced tax burdens, and suitable climates when choosing a state for relocation. By understanding state taxes and considering the cost of living, individuals can make a well-informed decision best suited to their financial and personal needs.