State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

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MikeZ
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State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by MikeZ »

I have been searching for an article on this but have not had much luck. Are there any lists of interesting cities near state Borders that would enable double dipping on lower taxes? E.g., working in a state with low/no income taxes while living in a state with low sales taxes and property taxes as an example. I can think about New Hampshire and Washington/Oregon as examples but was wondering if anyone did a more extensive look into this?
Last edited by MikeZ on Thu Dec 12, 2019 9:54 am, edited 2 times in total.
runner3081
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Re: State Taxes: Interesting State Boarder Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by runner3081 »

Vancouver, WA.

No income tax in WA, no sales tax in Oregon.
MarkNYC
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Re: State Taxes: Interesting State Boarder Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by MarkNYC »

You should be aware that if you live in a high income tax state and work in a zero income tax state, or the other way around, that you will pay the high income tax on your earnings either way.
Hockey10
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by Hockey10 »

PA has a flat tax rate of 3.07%, while neighboring DE has no sales tax. Many people in this area live in PA and shop in DE.
HobbesMB
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by HobbesMB »

Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
Morgan Dollar 1921
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by Morgan Dollar 1921 »

Live in TN, shop in KY used to be a major advantage. I have no details, but family and friends who lived close to the border were smiling when taxes became a topic at reunions. They would comment briefly then listen.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by Jack FFR1846 »

Lots of Southern NH people work in Mass. They get:

They pay the Mass income tax.
They pay the relatively higher NH property tax rate which has no limit on increases. Yes, I understand that some towns have lower prices in NH for housing than in Mass. But it depends. You really need to look at same house and how much $$ are you paying.
Gas tax (NH is about 2.5 cents a gallon less)
Commutes: I take pitty on commuters driving from NH into Mass. I did an opposite commute for 8 years, driving 60 mph, looking at the south bounders going 5 mph. This depends on where, of course.
meals tax: If you go to a restaurant in NH, it's not tax free. There's a 9% tax. In Mass, it's the normal sales tax of 6.25% and the town can add 0.75% to total 7%.
NH has no sales tax. Mass it's 6.25% but food and clothing (up to a limit) are not taxed.

And yes....Mass residents do go to NH malls like Pheasant Lane Mall in Nashua (yards over the border) to buy stuff for no sales tax. Buying a boat in NH to primarily use in NH, even as a Mass resident saves the sales tax on the boat if registered properly in NH. The trailer will need to be registered and tax paid in Mass. Car buying won't get out of Mass tax for Mass residents. You pay those either at the dealer (in Mass) or to the Registry when you register the car.
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hookemhorns
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by hookemhorns »

Some of my family members live in WA near the border with Oregon. No income tax, low property tax (though they have a modest property), and they do a lot of shopping in Oregon with no sales tax. It's a nice little arbitrage which many in the area do.

As mentioned, for really big ticket items like buying a car you will end up paying the sales tax either way. I've never heard of anybody being questioned about whether they paid sales tax on their gas, groceries, or a new TV though.
StealthRabbit
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by StealthRabbit »

Greatly depends on your wages, advancement, other costs, / opportunities to grow (wealth, income, education, quality of life)....

During my "earning years" I was able to land a decent paying job in Camas, WA for 30+ yrs (+ several international gigs while employed in no income tax WA.) I was hourly, so got equivalent of Portland, OR comparable wages.(union at the time).

High wages + no income tax + high home equity growth + relatively LCoL (30 yrs ago) was a boost to FIRE

Most benefit to me:
Great international airport 10 min away.
25+ colleges in region.
Pacific coast 1 hr
Mtns with year-round skiing 1 hr.
Recreation / hiking pics = 5 min.

Killer.... Californication... Home valuation from inflow of CA equity, caused my property taxes to climb from<$3/day to now over $43/day. Same home, no improvements, just more worn out. WA Supreme Court disallowed our voter approved measure to cap property taxes. There are areas that are cheaper (taxes). As in my income property <1 min away. But....spouse prefers the home we built ourselves... brick by brick.

As with all places... +/-.
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I'm gone a lot....

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StealthRabbit
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by StealthRabbit »

WA state has a way, and expects WA residents to pay Use Tax on Internet and sales tax free purchases. As a business, I must do this, and report it qtrly.
criticalmass
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by criticalmass »

MikeZ wrote: Thu Dec 12, 2019 9:40 am I have been searching for an article on this but have not had much luck. Are there any lists of interesting cities near state Borders that would enable double dipping on lower taxes? E.g., working in a state with low/no income taxes while living in a state with low sales taxes and property taxes as an example. I can think about New Hampshire and Washington/Oregon as examples but was wondering if anyone did a more extensive look into this?
Bristol (TN/VA) is interesting. On one side of State St, you pay nearly no income tax, except on things like interest/dividends, but you pay 9.25% sales tax. On the other side of the street, you have a significant income tax, but the sales tax is 5.3%.
hoffse
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by hoffse »

Chattanooga, Tennessee. No income tax, and drive less than 10 miles south into Georgia for no state sales tax on groceries, drugs, and medical devices (GA has a 4% sales tax on other items, though GA and TN both have tax free holidays for clothing and computers at least once a year). Bonus: Chattanooga has some of the fastest internet in the US, and it’s a real city with good health facilities, restaurants, minor league baseball, national parks on your doorstep, a Costco (on the Georgia side), etc. Oddly enough, it’s exactly 2 hours from Nashville, 2 hours from Atlanta, and 2 hours from Birmingham. It’s a gem.
trueblueky
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by trueblueky »

https://howmuch.net/articles/americas-tax-landscape has an interesting graphic on state taxes.

The states vary widely in income tax rate (and treatment of various retirement income streams), property tax rate (and homestead and rate increase rules), sales tax (and in what is exempt from taxation and how much locality rates vary), estate/inheritance tax, gas tax, toll roads, car tags (flat, based on value, based on age, based on weight), and "sin" taxes.

Often, one state can be better than the neighboring one for workers with $75,000 income but worse for retirees with that same income or for workers at $250,000 income.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by jebmke »

StealthRabbit wrote: Thu Dec 12, 2019 11:41 pm WA state has a way, and expects WA residents to pay Use Tax on Internet and sales tax free purchases. As a business, I must do this, and report it qtrly.
I have always paid use tax. When we lived in MA we would sometimes stop at a couple of places in NH but I just kept the receipts and filed use tax in January. Have same situation here in MD (DE has no sales tax).
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by jhfenton »

HobbesMB wrote: Thu Dec 12, 2019 10:58 am Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
+1 The compliance rate is minuscule. (This NPR article from 2013 said 1.6%.) Even if you want to comply, the time required to do an accurate assessment is out of line with the tax owed. It makes/made sense to simply make a high-side estimate and pay it.

It's actually not much of an issue on online purchases any more, at least in Ohio. Ohio sales tax is charged by Amazon and most online merchants.(In SW Ohio, our neighboring states charge sales tax, so it was almost entirely an online issue.)
Lumpr
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by Lumpr »

WY - no income tax
MT - no sales tax
StealthRabbit
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by StealthRabbit »

Lumpr wrote: Fri Dec 13, 2019 3:30 pm WY - no income tax
MT - no sales tax
SD>MT same
AK - Neither Sales, or Income Tax
chevca
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Re: State Taxes: Interesting State Boarder Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by chevca »

runner3081 wrote: Thu Dec 12, 2019 9:51 am Vancouver, WA.

No income tax in WA, no sales tax in Oregon.
This is what came to my mind as well.

I guess it would depend on what the OP means by "interesting cities". To live in, work in, visit, big, small... etc.? But, I would think the Vancouver/Portland combo would be tough to beat. I think most border towns are typically pretty small.

OP, just look up no income tax states, check the borders for what you consider "interesting", and then check the neighboring states. You don't need an article. :happy
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by GuayaquilEcu »

Vancouver - Portland is a good combination but eventually you only just shop mostly where you live to avoid traffic, you will save tax on some big ticket electronics but drive in to portland traffic wears you down. Other bigger downside of WA state if you are in a business owner in professional services there is something called business and occupation tax of 1.5% on revenue/sales ( not profits) this is much less than OR Income tax of course.
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gwe67
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by gwe67 »

As a bonus, you could live in a state that doesn't have a bottle deposit but is next to one that does. Reminds me of a TV show....
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by mcraepat9 »

gwe67 wrote: Fri Dec 13, 2019 9:37 pm As a bonus, you could live in a state that doesn't have a bottle deposit but is next to one that does. Reminds me of a TV show....
This is illegal and any suggestion of this will lead to this thread getting shut down.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by TresBelle65 »

I recall hearing how folks who live in the Florida Panhandle bounce back and forth across the Alabama line for some reason...I think living in Alabama, but get groceries in Florida. IIRC, AL has an egregious sales tax rate, even on groceries.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by PaulF »

StealthRabbit wrote: Fri Dec 13, 2019 4:10 pm SD>MT same
AK - Neither Sales, nor Income Tax
Nor borders! :D
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by RickBoglehead »

Most use tax is collected via the state tax return. By not paying it, and then signing a tax return, the taxpayer has committed tax fraud. Wasn't on the tax return when I lived just over the Delaware state line in PA.

Everything I buy is in Quicken. If sales tax is not charged, like many of my Amazon purchases, I record a negative charge against a Use Tax expense, then pay it on my tax return and zero it out in Quicken. Quite easy.

Bought X for $10.00 category computer hardware
Charged (but did not pay) 6% sales tax on it, $0.60, category computer hardware
Owe ($0.60) tax, category Use Tax, this offsets the tax charge but not paid, so I still spent zero net out of pocket.

When I pay the use tax, it's an expense for use tax paid and an offset against the tax owed. Nets zero, because the tax was charged at the purchase against computer hardware, i.e. included with the item.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by MP123 »

PaulF wrote: Sat Dec 14, 2019 12:09 am
StealthRabbit wrote: Fri Dec 13, 2019 4:10 pm SD>MT same
AK - Neither Sales, nor Income Tax
Nor borders! :D
Very true as long as you don't count Canada. Of course that might provide some exchange rate arbitrage as well as tax breaks.

But since the Alaska Permanent Fund actually pays each resident every year it's maybe the only state where you can make money just by living there.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by PaulF »

MP123 wrote: Sat Dec 14, 2019 9:13 pm
PaulF wrote: Sat Dec 14, 2019 12:09 am
StealthRabbit wrote: Fri Dec 13, 2019 4:10 pm SD>MT same
AK - Neither Sales, nor Income Tax
Nor borders! :D
Very true as long as you don't count Canada. Of course that might provide some exchange rate arbitrage as well as tax breaks.

But since the Alaska Permanent Fund actually pays each resident every year it's maybe the only state where you can make money just by living there.
I actually thought about editing my post to say "nor STATE borders," but opted against it! :D Perhaps I should have saved my comment for Hawaii!
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by StealthRabbit »

PaulF wrote: Sat Dec 14, 2019 9:42 pm
...

I actually thought about editing my post to say "nor STATE borders," but opted against it! :D Perhaps I should have saved my comment for Hawaii!
In Hawaii at the moment. Enjoying some $39 SWA flights w/ free companion. $79 to get here from Oakland. (One came free).... Dave Ramsey would be proud if I had left my mileage CC at home.

Hawaii rates pretty high for LOW retirement spend. Found some very cheap 'local' homes (junkers). Food and gas is only cheap at Costco. Buy a junker Hawaii home between Costco and airport.

Air B&B it to antique hippies.
Big market!
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by PaulF »

StealthRabbit wrote: Sat Dec 14, 2019 10:12 pm
PaulF wrote: Sat Dec 14, 2019 9:42 pm
...

I actually thought about editing my post to say "nor STATE borders," but opted against it! :D Perhaps I should have saved my comment for Hawaii!
In Hawaii at the moment.
Too funny! Enjoy your trip!

May I ask if you are the same "StealthRabbit" as on Early-Retirement.org? If so, I have a picayune question to ask you.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by mpsz »

HobbesMB wrote: Thu Dec 12, 2019 10:58 am Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
+1. States are desperate for use tax funds and are resorting to ugly tactics: https://www.courant.com/business/hc-biz ... story.html
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by mnnice »

I lived along the MN/SD border. We lived in SD. DH worked in SD, I worked in MN. We had friends that lived in MN he worked in SD and she worked in MN. Not sure there was much arbitration to be had in either direction. Lots of advantages in regards to retired post Medicare aged folks for SD not much difference for working accumulators.
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by AlphaLess »

StealthRabbit wrote: Sat Dec 14, 2019 10:12 pm
PaulF wrote: Sat Dec 14, 2019 9:42 pm
...

I actually thought about editing my post to say "nor STATE borders," but opted against it! :D Perhaps I should have saved my comment for Hawaii!
In Hawaii at the moment. Enjoying some $39 SWA flights w/ free companion. $79 to get here from Oakland. (One came free).... Dave Ramsey would be proud if I had left my mileage CC at home.

Hawaii rates pretty high for LOW retirement spend. Found some very cheap 'local' homes (junkers). Food and gas is only cheap at Costco. Buy a junker Hawaii home between Costco and airport.

Air B&B it to antique hippies.
Big market!
Which island?
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.
AlphaLess
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by AlphaLess »

mpsz wrote: Sat Dec 14, 2019 11:10 pm
HobbesMB wrote: Thu Dec 12, 2019 10:58 am Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
+1. States are desperate for use tax funds and are resorting to ugly tactics: https://www.courant.com/business/hc-biz ... story.html
It's NOW the Law of the Land. https://www.cnbc.com/2018/06/21/heres-w ... r-you.html
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by rkhusky »

AlphaLess wrote: Sun Dec 15, 2019 9:15 pm
mpsz wrote: Sat Dec 14, 2019 11:10 pm
HobbesMB wrote: Thu Dec 12, 2019 10:58 am Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
+1. States are desperate for use tax funds and are resorting to ugly tactics: https://www.courant.com/business/hc-biz ... story.html
It's NOW the Law of the Land. https://www.cnbc.com/2018/06/21/heres-w ... r-you.html
Wonder how a state can enforce the rule on an out-of-state retailer without some agreement between the states?
AlphaLess
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by AlphaLess »

rkhusky wrote: Sun Dec 15, 2019 9:22 pm
AlphaLess wrote: Sun Dec 15, 2019 9:15 pm
mpsz wrote: Sat Dec 14, 2019 11:10 pm
HobbesMB wrote: Thu Dec 12, 2019 10:58 am Most (all?) states with a sales tax also impose a use tax that requires you to declare untaxed items and pay the local sales tax on them. So those purchases made over the border are still taxed in your home state. While a significant majority of people fail to comply with this requirement (or are unaware), it is technically required.

Perhaps articles about these locations aren't plentiful because writers can't formally recommend violating state tax policy.
+1. States are desperate for use tax funds and are resorting to ugly tactics: https://www.courant.com/business/hc-biz ... story.html
It's NOW the Law of the Land. https://www.cnbc.com/2018/06/21/heres-w ... r-you.html
Wonder how a state can enforce the rule on an out-of-state retailer without some agreement between the states?
I am not a legal expert. Nor I work in commercial law enforcement.
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.
StealthRabbit
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Re: State Taxes: Interesting State Border Towns? (E.g., Low Income Tax, Property Tax, Sales Tax combo?)

Post by StealthRabbit »

AlphaLess wrote: Sun Dec 15, 2019 9:12 pm
StealthRabbit wrote: Sat Dec 14, 2019 10:12 pm
PaulF wrote: Sat Dec 14, 2019 9:42 pm
...

I actually thought about editing my post to say "nor STATE borders," but opted against it! :D Perhaps I should have saved my comment for Hawaii!
In Hawaii at the moment. Enjoying some $39 SWA flights w/ free companion. $79 to get here from Oakland. (One came free).... Dave Ramsey would be proud if I had left my mileage CC at home.

Hawaii rates pretty high for LOW retirement spend. Found some very cheap 'local' homes (junkers). Food and gas is only cheap at Costco. Buy a junker Hawaii home between Costco and airport.

Air B&B it to antique hippies.
Big market!
Which island?
Any Island with a Costco will work.
Kauai
Maui
Oahu
Hawai'i
https://smartypantsfinance.com/budget-hawaii/
Food
Eating in Hawaii is expensive. Maybe your trip to Hawaii is a great time to go on that diet you’ve been putting off! I kid. Sort of. Most food is 30-50% more costly in Hawaii in both the restaurants and grocery stores. My solutions…

Costco! All of Hawaii’s main islands,
Extra tip! Take advantage of less expensive Costco gas to fill up the rental car. ($3.25/g @ Costco vs $3.90 - $4.02 retail at the moment)

(It is pretty amazing how many people live in Hawaii for very cheap. ex. My SIL has been 'house-sitting' for 37 yrs, no home / apartment required. Just find a group of clients who travel a lot and have extra living space for visitors.) Not all can live this way, but people with incentive get resourceful. (She hates being cold, really hates cold weather)

Hawaii rates high for sales tax 4% + 0.5%, so use left coast 'border state' of Oregon as a place to commute / shop. (Direct flights available to HI from PDX) The many who live inexpensively in HI are not big spenders / consumers. :wink:

Low local / municipal taxes in Hawaii do not come near my current 9.8% combined. But I am done consuming, and WA does not have sales tax on food ingredients, but does on labor / services. Thus DIY is pretty big.
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