For those with incomes in the top 1 percent, Tennessee ranked as the best state in the South for having the lowest tax burden. After accounting for all state and local taxes, the wealthiest 1 percent of taxpayers paid the lowest share of their income in the following states:
1. Alaska, 3.43 percent of income paid in state and local taxes
2. Wyoming, 3.98 percent of income paid in state and local taxes
3. Nevada, 4.71 percent of income paid in state and local taxes
4. Tennessee, 4.97 percent of income paid in state and local taxes
5. South Dakota, 5.17 percent of income paid in state and local taxes
Source: Institute on Taxation & Economic Policy. The U.S. average for the share of income paid in state and local taxes by the top 1 percent is 5.4 percent of income.