Bloomberg Personal Finance Magazine rated Louisiana #2 for tax friendliness. Here’s why:

In New Iberia, the local sales tax is only 8.25% and the gasoline tax is only 20 cents per gallon. And if you’re 65 years old or older, you are allowed to exempt up to $6,000 (or $12,000 for you and your spouse) off your pension and annuity income. Your federal retirement benefits - including military and nonmilitary benefits - are also exempt from state income tax. There is also a full exclusion for federal taxable social security retirement benefits. In Louisiana, the inheritance tax is being phased out and won’t exist by June 30, 2004.