What is your experience with lack of State Income Tax in the State of Washington? (sales, real estate)

[JJH2011]

I understand that the effect of state income tax or no state income tax will vary from person to person, but can you share your experience with having no State Income tax burden in the state of Washington? Does it help you financially or is it pretty much a wash with states having State Income Tax?

(I also understand that the states no levying income tax tends to have high real estate property taxes, but I am in Maryland which is about the same as the New Jersey, known for abusive property taxes, and both Maryland and New Jersey have state income taxes.

In the case with State of Washington, the sales tax rate seems to be on high end after the additional municipal sales tax rate...)

[trixie09]

I've found that the lack of income tax is a boon for my family and friends. Not sure how long it will last, but there is also a sales tax deduction on the income taxes Federally. I have to chuckle when I read the usual complaints in the online boards about the taxes in Washington (though the complainers complain regardless of what State they live in,) because Washington is pretty low in the tax-burden category.

Anyone I've known who has moved to another State with income tax, had a major attack of sticker-shock when they got their first paycheck. We are spoilt here. Even with a bit higher sales tax, you still come out ahead. I used to think it would be a wash, but it's not. You definitely do better there than comparable States. Comparable being clean, well-maintained, educated, States. Sure, you can find places with less tax burdens, but you wouldn't want to live there, necessarily.

I own a small business and my State taxes are tiny. Plus, if I choose to incorporate, the fees are a fraction of what you'd find in Oregon or California. Oregon, even with their lack of sales tax, is pretty harsh when it comes to taxes. Their income tax is high, and their fees for everything have gone up.

I don't think that taxes should be anyone's sole reason for judging a place.. the online community has gotten so out of control in that regard, being anti-tax. But your money does go further here.

[Gully Foyle]

Originally Posted by trixie09

Anyone I've known who has moved to another State with income tax, had a major attack of sticker-shock when they got their first paycheck. We are spoilt here. Even with a bit higher sales tax, you still come out ahead. I used to think it would be a wash, but it's not. You definitely do better there than comparable States. Comparable being clean, well-maintained, educated, States. Sure, you can find places with less tax burdens, but you wouldn't want to live there, necessarily.

You mean like New Hampshire or Alaska which have neither a state income tax nor a sales tax?

Retirement Living - Taxes by State: Kansas - New Mexico

[SIZE=3][SIZE=3][SIZE=3][SIZE=3][SIZE=1][SIZE=3][SIZE=3] [SIZE=3]NEW HAMPSHIRE[/SIZE][SIZE=3]
[/SIZE][SIZE=2]Sales Taxes
State Sales Tax: None. There is an 8% tax on lodging and restaurant meals and a 7% tax on two-way communications.[/SIZE][SIZE=3]
[/SIZE][SIZE=2]Gasoline Tax: 19.6 cents/gallon[/SIZE][SIZE=3]
[/SIZE][SIZE=2]Diesel Fuel Tax: 19.6 cents/gallon
Cigarette Tax: $1.78 cents/pack of 20
[/SIZE]
[SIZE=2]Personal Income Taxes
New Hampshire depends more upon real property taxes for revenue than most states since there are no general income, sales or use taxes. The state also receives substantial revenue from taxes on motor fuels, tobacco products, alcoholic beverages sold through the state liquor stores, and pari-mutuel betting. The state income tax is limited to a 5% tax on dividends and interest income of more than $2,400 ($4,800 for joint filers). A $1,200 exemption is available for residents who are 65 years of age or older. For an overview of New Hampshire taxes, click here (http://www.nh.gov/revenue/munc_prop/documents/2010taxratereport.doc - broken link).
Retirement Income: Not taxed.

Property Taxes
Local property taxes, based upon assessed valuation, are assessed, levied and collected by municipalities. To view the tax rates for each town, click here (http://www.nh.gov/revenue/munc_prop/documents/2009taxratereport.doc - broken link). [/SIZE]
[SIZE=2]A state education property tax rate of $2.35 (2010) per $1,000 of total equalized valuation is assessed on all New Hampshire property owners. An elderly exemption for property taxes can be age, net income limits, including Social Security income, and net asset limits. Property taxes can be deferred but accrue interest at the rate of 5% per annum. The deferred property tax may not exceed more than 85% of the equity value of the residence. The deferral is available (if granted) by the assessing officials, to any resident property owner who is at least 65 years old. For single homeowners 65 and older who earn less than $5,000 and married couples who earn less than $6,000, $5,000 of their property's assessed value is exempt from taxes. In addition, the homeowner's other assets besides the home must be worth less than $35,000.

There is a Low & Moderate Income Homeowner's Property Tax Relief program in New Hampshire. Click here. You must own a homestead subject to the state education property tax; reside in such homestead as of April 1 of the year for which the claim for relief is made; have a total household income of (1) $20,000 or less if a single person or (2) $40,000 or less if married or head of a New Hampshire household.

Call 603-271-2687 for details on property taxes or click here (http://www.nh.gov/revenue/munc_prop/municipalservices.htm - broken link) for municipal tax rates.

Inheritance and Estate Taxes
New Hampshire's Legacy & Succession Tax was repealed in 2002 and is effective for deaths occurring on or after January 1, 2003. As a result there is no inheritance or estate tax.[/SIZE]


Retirement Living - Taxes by Ste: Alabama - Iowa

[/SIZE][/SIZE][/SIZE][/SIZE][/SIZE][/SIZE][/SIZE][SIZE=3]ALASKA
[/SIZE][SIZE=2]Sales Taxes
State Sales Tax: The state currently does not have a sales and use tax. However, 62 municipalities impose local sales taxes that range up to 7%. Anchorage does not have a sales tax.[/SIZE]
[SIZE=2]Gasoline Tax: 8 cents/gallon[/SIZE]
[SIZE=2]Diesel Fuel Tax: 8 cents/gallon
Cigarette Tax: $2.00/pack of 20 (Anchorage - add $1.32)[/SIZE]
[SIZE=2]Personal Income Taxes
No state income tax[/SIZE][SIZE=4]
[/SIZE][SIZE=2] Retirement Income: Not taxed.

Property Taxes
Alaska is the only state in the United States where a large part of the land mass is not subject to a property tax. Although property tax is the primary method of raising revenues for most of the larger municipalities in the state, smaller municipalities favor a sales tax. This is due primarily to the fact that the smaller incorporated areas lack a tax base large enough to support the property tax. The unincorporated areas of the state do not have the legal authority to levy a tax. Of the 18 Boroughs, only 14 levy a property tax. Only 11 Cities located outside of Boroughs levy a property tax. Therefore, only 25 municipalities in Alaska (either cities or boroughs) levy a property tax. These 25 municipalities can be found on the Directory of Taxing Jurisdictions. [/SIZE]
[SIZE=2]Alaska taxes both real and personal property. there are several municipalities that have chosen to exempt some or all categories of personal property. For a listing of those municipalities and categories, see the Alaska Taxable information. Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of the assessed value of their property. This also applies to disabled veterans. The average assessed value exempted from taxes for senior citizens and disabled veterans is $138,486 which equated to a tax exemption of $1,851 for 2009. In 2009, the total full value for all municipalities (over 750 in population) was $91.5 billion (including TAPS -- Trans-Alaska Pipeline). With a statewide population of 679,720 the per capita full value was $140,292. Intangible personal property is exempt from taxation. Call 907-269-6620 (Anchorage) or 907-465-2320 (Juneau) for details.[/SIZE]
[SIZE=2]Inheritance and Estate Taxes
There is no inheritance tax and the estate tax is limited to federal estate tax collection.
[/SIZE]

[allforcats]

No state income tax is neato -- fewer forms to fill out, fewer bits of information to remember or keep filed.

Financially, of course the state and local governments must have revenue in order to operate (and I DO want the services) so we pay high sales taxes on a wide variety of goods and services.

Financially, I'm sure it pretty much evens out. But I win because I have less paperwork to do! Cheers for me!

[rkcarguy]

They get you one way or another. In additon to whats already noted above, we are right up there for the highest state gas taxes in the country.

[cabocurtis]

Besides the property taxes which we seem to be in the middle rate compared to other states, but relatively high valuations compared to most other states. For individuals the sales tax which for seattle shoppers is 9.5% and 10% at restaurants(a bit lower in other parts of the state) is fair since its based on consumptions of goods and some services(most groceries are exempt) So if you consume alot you pay more. For businesses I do not think the state is particularly tax friendly especially to service businesses. We pay 1.8 percent of our gross income(not net like other states) so we could be a business not making a profit and still paying a substantial tax. If your in a city like seattle add a near .5 percent so now we are at 2.3 percent of gross service income. On top of that most counties including King charge a annual personal property tax on assets owned every year including equipment, computers, leasehold improvements. All in all not a cheap place to due business.

[Hemlock140]

I agree that for business it's difficult, with city and state B & O taxes, some cities with employee "head" taxes. For personal though, despite what I consider high sales and property taxes, they are not that bad. I think the lack of income tax still allows us to come out ahead. They seem to try and make up the difference in fees and now even donations, but at least with most of those you have a choice. Like $5 on the car registration to help state parks,
you can check a box or not.

[StealthRabbit]

No Income Tax loses it's luster (advantage) real fast when you have no income.... (unemployed / early retired / disabled ...)

[JJH2011]

Originally Posted by cabocurtis

On top of that most counties including King charge a annual personal property tax on assets owned every year including equipment, computers, leasehold improvements.

Are you saying most counties in the state of Washington charge property tax on person computers and laptops used at your home???? I did not know that, and that is surprising. If you computer was bought at $800, do they assess it at like $1,000? How much do they collect on your personal home computers?

By the way, I would still believe that it's indisputable that counties in Washington has lower real estate property taxes that the counties in Maryland? How much lower? I don't know. You tell me.

[Ira500]

Originally Posted by JJH2011

Are you saying most counties in the state of Washington charge property tax on person computers and laptops used at your home???? I did not know that, and that is surprising. If you computer was bought at $800, do they assess it at like $1,000? How much do they collect on your personal home computers?

By the way, I would still believe that it's indisputable that counties in Washington has lower real estate property taxes that the counties in Maryland? How much lower? I don't know. You tell me.

No, a computer at your home used for personal use would not be charged a personal property tax. If it was your own business and the computer was used for business purposes, then theoretically you could be paying a personal property tax, but all household effects are exempt from personal property tax.