5 States That Don’t Tax Retirement Pension Payouts

2. Wyoming

Insider Monkey Score: 19

Cost of Living Index: 92.4    

Tax Friendliness: Very Tax-Friendly

Taking the second spot on our list, Wyoming is another very tax-friendly state to retire to that doesn’t tax retirement pension payouts. Similar to states such as South Dakota, the state doesn’t have an income tax. The average effective property rate is 0.6% here, which is one of the lowest in the US. Moreover, sales taxes are low as well. The sales tax rate is 4%, and the combined rate of sales and local sales taxes is 5.36%.