Perhaps a better retirement-tax move would be to Alaska, Delaware, Oregon, New Hampshire or Montana, the five states that don't have a state sales tax. Perhaps not. Remember Alaska's local sales taxes? City, county, school district or other special taxing jurisdictions (a la Illinois) are common nationwide, even in states without an overall sales tax.

And even if you do find a suitable retirement spot in a state without an income or statewide sales tax, you'll likely come back to that property-tax consideration mentioned earlier. Every government has to get operational money from somewhere. States without income or sales taxes, says Logan, tend to have higher property taxes.

Eventual estate taxes
Sometimes the state collects your money after the fact through estate and inheritance taxes. Many retirees look for places to settle where they can be assured they'll be able to leave their family and friends well taken care of.

The federal estate tax is being gradually phased out and is scheduled to expire in 2010, but unless lawmakers act it will be right back in 2011. Meanwhile, the states who tie their estate tax laws to the federal statute have been working to reconcile the changes. "Some codes are automatically updated to correspond with federal law," says Logan. "But in others, the legislature must act. Some did and some didn't before the effective date of the [federal estate tax] law."

The upshot, says Logan, is that there are now several jurisdictions that still have estate tax provisions that could be costly: Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Oregon, Rhode Island, Virginia, Vermont, Wisconsin, Washington state and Washington, D.C.

A separate, but related, issue is inheritance tax. Estate taxes are collected from the estate based on its total value of assets at death. Inheritance taxes are imposed when the estate is distributed and are based on the amount that each heir receives. States with inheritance taxes include Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania, Ohio, Oklahoma and Tennessee.

Ready to just stay where you are? That might not be such a bad idea. As Logan puts it, "I don't know that I'd designate any state a particular tax haven."

His words probably are welcomed by the various state promotion boards. They also underscore the truth of taxes: You can deal with just about any of them as long as you know going in what they are, how they will affect your retirement plans and how you can manage those effects.

Bankrate's state tax directory can help you get an idea of your state's tax laws or those in a state you might like to call retirement home. You also should check out retirement-income tax breaks that many states offer.