10 Tax-Friendly States for a Better Life in the U.S.

Mississippi

State income tax: 3% (on more than $1,000 of taxable income) — 5% (on more than $10,000 of taxable income). Income tax rates are being gradually reduced. By 2022, the first $5,000 of taxable income will be exempt.

Average local sales tax: 7.07%

Gas taxes and fees: 19 cents per gallon

Mississippi is moving to ease its income tax bite on the lowest-earning residents. Starting in 2018, the first $1,000 of taxable income is exempt from the 3% rate. By 2022, that bracket will be gone, and the income tax will start at 4% of $5,000 of taxable income.

Gas is taxed at 19 cents per gallon, one of the lowest rates in the U.S. Vehicle sales are taxed at 5%, two percentage points below the general sales tax rate. Mississippi also charges an annual personal property tax based on vehicles’ age and value. Rates are set at the county level. (In Lafayette County, for example, you’d pay $285 on a vehicle valued at $20,000.)

The property tax on the Magnolia State’s median home value of $105,700 is $841, the 19th-lowest in the nation. Mississippi’s state sales tax rate of 7% is the second-highest in the U.S. (only California, at 8.25%, is higher), and Mississippi is one of a minority of states that charges sales tax on groceries. But prescription drugs, residential utilities, motor fuel and newspapers are all exempt, and localities add little on top of the state’s rate.