Nevada Offers ‘Tax Haven,’ but Hawaii Is a ‘Tax Hell’

Residents in only four states are taxed less than people living in Nevada, according to the latest issue of Money magazine that lists the Silver State as a “tax haven” as opposed to a “tax hell.”

And Gov. Bob Miller’s office said today that finding, along with Inc. magazine’s recent ranking of Nevada as No. 1 for “business climate,” shows the growing state is gaining national attention for its favorable tax climate.

“One of the advantages of moving to Nevada is the tax climate, especially compared to California,” Miller’s press secretary Larry Henry said. “It’s just a good place to do business, and we’re getting the national attention we deserve from this and people are moving here.”

The average Nevada household pays $231 a year in taxes for the 47th lowest overall tax bill in the nation, and state residents do not face local or state income taxes or estate taxes, the January Money magazine issue reports.

“Sales, gambling and gas taxes are the biggest sources of tax revenues” in Nevada, the article states, adding that state and local taxes across the rest of the nation are “taking off” overall.

But states that do not rely on income taxes, such as Nevada and six others, have the highest sales tax rates, according to the Money survey. In Nevada, the state imposes a 5.75% sales tax rate and local governments can push that up to a total 6%.

Money Magazine said the No. 1 “tax haven” is New Hampshire, which has the lowest household tax bills and no sales tax. That state was followed by Florida, Alaska, Texas and then Nevada as being states that tax the least.

The “tax hells” were Hawaii, followed by Oregon, the District of Columbia, Maryland and Idaho. In Hawaii, only in death do residents escape local and state taxes, and they pay the highest overall tax bills in the nation at an average $4,463 a year.

“To some taxpayers, a march of steady local tax-rate hikes is making the feds seem almost friendly,” Money Magazine reports. “Further, between cost shifting by Washington and the mounting expense of state or local programs . . . the trend is expected to continue.”

Between 1980 and 1988, state and local tax revenues from individuals gained 116%, almost double compared to federal tax hikes of 60% during those years, according to the article.