⚠️Note to readers: We do not provide financial advice. Tax laws change frequently and individual circumstances vary. Always consult a CPA or tax professional before making relocation decisions based on taxes.
States With the Lowest Taxes in 2026: Income, Sales & Property Tax Rankings
When comparing states by taxes, most people focus on income tax alone. But your total tax burden includes income tax, sales tax, property tax, and excise taxes. A state with zero income tax might still cost you more than a state with moderate income tax if sales and property taxes are steep. This guide ranks every state by total tax burden so you can see the full picture before relocating.
The Bottom Line
Lowest total tax burden: Alaska, Wyoming, Tennessee, Florida, New Hampshire
Highest total tax burden: New York, Connecticut, New Jersey, California, Illinois
A household earning $100K can save $8,000-$15,000/year by moving from a high-tax to a low-tax state. Use our Paycheck Calculator to see your exact savings.
Understanding Total Tax Burden
Your total state and local tax burden is composed of three major components:
- Income tax — taxed on wages, investment income, and retirement withdrawals (in most states). Ranges from 0% in nine states to over 13% in California.
- Sales tax — charged on most retail purchases. State rates range from 0% (five states) to 7.25% (California), and local surcharges can push combined rates above 10%.
- Property tax — assessed on real estate value annually. Rates range from 0.31% in Hawaii to 2.23% in New Jersey.
States with no income tax often make up the difference through higher sales or property taxes. That is why looking at any single tax in isolation can be misleading. The rankings below use estimated total tax burden as a percentage of income for a median household, combining all three categories plus excise taxes.
Top 10 Lowest Tax Burden States (2026)
These states impose the lightest combined tax load on residents. Rankings factor in income tax, sales tax, property tax, and excise taxes as a share of household income.
| State | Income Tax | Sales Tax | Avg. Property Tax | Overall Rank |
|---|---|---|---|---|
| Alaska | 0% | 0% | 1.07% | #1 |
| Wyoming | 0% | 4.00% | 0.55% | #2 |
| Tennessee | 0% | 7.00% | 0.62% | #3 |
| Florida | 0% | 6.00% | 0.80% | #4 |
| New Hampshire | 0% (wages) | 0% | 1.86% | #5 |
| Nevada | 0% | 6.85% | 0.53% | #6 |
| South Dakota | 0% | 4.50% | 1.14% | #7 |
| Texas | 0% | 6.25% | 1.60% | #8 |
| Montana | 1.0%-6.75% | 0% | 0.74% | #9 |
| Delaware | 2.20%-6.60% | 0% | 0.57% | #10 |
Notice that seven of the top 10 are no-income-tax states. Montana and Delaware make the list despite having income taxes because they charge zero sales tax and maintain low property taxes, keeping total burden very competitive.
The No-Income-Tax Advantage
Nine states charge zero income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For high earners, the income tax savings alone can be transformative. A household earning $200,000 in California pays roughly $15,000 in state income tax. That same household in Florida or Texas pays zero.
But not all no-tax states are created equal. Texas has some of the highest property taxes in the nation at 1.60%, which can offset income tax savings for homeowners. Washington has no income tax but its combined sales tax (state plus local) reaches 10%+ in Seattle. For a detailed breakdown, see our complete guide to no-income-tax states.
The best strategy depends on your profile. If you earn a high salary and rent (no property tax exposure), Texas or Florida offer the strongest pure savings. If you plan to buy a home, Wyoming or Nevada may be better due to lower property taxes. If you are retired and living on Social Security, Tennessee and Florida shine because neither taxes retirement income.
How Much Do No-Tax States Actually Save You?
The answer depends heavily on income level. Here are approximate annual state income tax savings for a single filer moving from California to a no-income-tax state:
- $75,000 salary: ~$3,900/year saved
- $100,000 salary: ~$5,800/year saved
- $150,000 salary: ~$11,700/year saved
- $250,000 salary: ~$21,500/year saved
These figures represent income tax savings only. When you factor in cost-of-living differences, total savings can be significantly higher. Use our Paycheck Calculator to compare your exact take-home pay across any two states.
Top 10 Highest Tax Burden States (2026)
For comparison, these states impose the heaviest combined tax load. If you currently live in one of these states, relocation savings could be substantial.
| State | Income Tax | Sales Tax | Avg. Property Tax | Overall Rank |
|---|---|---|---|---|
| New York | 4.00%-10.90% | 4.00% | 1.62% | #50 |
| Connecticut | 3.00%-6.99% | 6.35% | 2.15% | #49 |
| New Jersey | 1.40%-10.75% | 6.63% | 2.23% | #48 |
| California | 1.00%-13.30% | 7.25% | 0.71% | #47 |
| Illinois | 4.95% | 6.25% | 2.07% | #46 |
| Vermont | 3.35%-8.75% | 6.00% | 1.83% | #45 |
| Maryland | 2.00%-5.75% | 6.00% | 1.07% | #44 |
| Minnesota | 5.35%-9.85% | 6.88% | 1.02% | #43 |
| Massachusetts | 5.00% | 6.25% | 1.15% | #42 |
| Oregon | 4.75%-9.90% | 0% | 0.87% | #41 |
New York tops the list due to high income tax rates combined with hefty property taxes and New York City's additional local income tax. A household earning $150,000 in New York City faces a combined state and city income tax approaching 10%, on top of federal taxes.
Notably, Oregon ranks among the highest-burden states despite having no sales tax. Its income tax rate reaches 9.90%, which more than compensates. California's 13.30% top marginal rate is the highest in the nation, though its relatively low property taxes soften the blow slightly for homeowners.
If you are leaving California or comparing New York to Florida, the tax savings can easily exceed $10,000 per year for middle-class families and $20,000+ for six-figure earners.
Best Low-Tax States by Category
Best Low-Tax States for Families
Families care about more than just tax rates. School quality, childcare costs, and property tax exemptions matter too. The strongest low-tax options for families are:
- Florida — No income tax, solid public schools (Bright Futures scholarship program), generous homestead exemption reduces property tax for primary residents. See our guide to moving to Florida.
- Tennessee — No income tax, very affordable housing (median home price under $300K), and low overall cost of living. Nashville offers growing job markets without extreme costs.
- Texas — No income tax and strong job growth, but property taxes are high (1.60% average). Best for families who rent or plan to buy in lower-value areas. Read our Texas relocation guide.
Best Low-Tax States for Retirees
Retirees have different tax concerns. Social Security taxation, pension exemptions, and estate/inheritance taxes become critical. Top picks:
- Florida — No income tax means Social Security, pensions, and 401(k) withdrawals are all tax-free at the state level. No estate tax. Warm climate is a bonus.
- Wyoming — No income tax, very low property taxes (0.55%), no estate tax. Ideal for retirees who own property and want minimal government cost.
- Nevada — No income tax, low property taxes (0.53%), and no estate or inheritance tax. Las Vegas and Reno offer excellent healthcare facilities and entertainment.
- Tennessee — No tax on wages or retirement income. Property taxes are among the lowest in the nation. Nashville and Knoxville have strong healthcare infrastructure.
Best Low-Tax States for High Earners
If you earn $200,000+, income tax is your biggest variable cost. The math is straightforward: every percentage point of state income tax costs you $2,000+ per year. Top options:
- Texas — Zero income tax plus a massive job market (especially tech in Austin and energy in Houston). A $300K earner saves ~$25,000/year vs. California. Explore the California vs. Texas comparison.
- Florida — Zero income tax with major metros (Miami, Tampa, Orlando) offering corporate infrastructure. Compare directly with our New York vs. Florida tool.
- Nevada — Zero income tax, rapidly growing tech scene in Reno, and proximity to California without the tax bill. Property taxes are among the lowest nationally.
- Wyoming — The ultimate tax shelter state. Zero income tax, very low property and sales tax, and no corporate income tax. Best for entrepreneurs and remote high earners who do not need a large metro.
Tax Burden vs. Tax Rate: What Is the Difference?
Tax rate is the statutory percentage applied to a single tax type. For example, Texas has a 0% income tax rate but a 6.25% sales tax rate and ~1.60% property tax rate.
Tax burden measures the total share of income a resident pays across all state and local taxes. It accounts for deductions, exemptions, and how much you actually spend on taxable goods.
A state with a 5% income tax rate and no sales tax (like Oregon) may have a similar total burden to a state with 0% income tax and 7% sales tax (like Tennessee). The "best" state depends on your specific income, spending, and home ownership status. That is why our Paycheck Calculator compares actual take-home pay rather than rates alone.
Strategies for Reducing Your State Tax Burden
Relocating is the most impactful strategy, but it is not the only one. Here are practical approaches:
1. Establish Residency in a No-Tax State
If you work remotely or are self-employed, moving to a no-income-tax state is the single most effective tax reduction strategy available. You must genuinely relocate — spend 183+ days in the new state, get a local driver's license, register to vote, and update all financial accounts. States like California and New York aggressively audit former residents who claim to have moved but maintain ties.
2. Compare Total Cost, Not Just Tax Rates
Use our Cost of Living Calculator to compare housing, groceries, transportation, and healthcare costs alongside taxes. A state with slightly higher taxes but 30% cheaper housing may leave you better off overall. Our cheapest states to live guide combines tax and cost data for a complete picture.
3. Take Advantage of Homestead Exemptions
Many low-tax states offer homestead exemptions that significantly reduce property taxes on your primary residence. Florida exempts the first $50,000 of home value from property tax. Texas offers a $100,000 homestead exemption for school district taxes. These exemptions can save homeowners $1,000-$3,000 annually.
4. Time Your Move Strategically
If you move mid-year, you may owe partial-year income tax to both your old and new state. Moving early in the calendar year (January or February) minimizes the tax obligation to the high-tax state. Some states, like California, apply a "source income" rule that can tax certain income types (stock options, deferred compensation) even after you leave.
Frequently Asked Questions
Which state has the lowest overall tax burden in 2026?
Alaska has the lowest overall tax burden. It has no state income tax, no state sales tax, and relatively low property taxes. Residents also receive an annual Permanent Fund Dividend from oil revenues, effectively creating a negative tax rate for many households.
Are no-income-tax states always the cheapest overall?
Not necessarily. States without income tax often compensate with higher sales taxes or property taxes. For example, Texas has no income tax but property tax rates averaging 1.60%, among the highest in the nation. Your total tax burden depends on your income level, spending habits, and home value.
How much can I save by moving to a low-tax state?
Savings vary by income. A household earning $100,000 moving from New York to Florida could save $5,000-$8,000 per year in state income taxes alone. When factoring in lower property taxes and cost of living, total savings can reach $15,000-$25,000 annually.
What is the difference between tax burden and tax rate?
Tax rate is the percentage applied to a specific tax (e.g., 5% income tax). Tax burden is the total percentage of income that goes to all state and local taxes combined, including income, sales, property, and excise taxes. A state with a low income tax rate can still have a high total tax burden if other taxes are steep.
Which low-tax state is best for retirees?
Florida and Tennessee are top choices for retirees. Both have no income tax, meaning Social Security and retirement withdrawals are tax-free at the state level. Florida also has a generous homestead exemption that reduces property taxes for primary residents, and Tennessee has no tax on wages or retirement income.
Calculate Your Tax Savings
See exactly how much you'd keep by relocating to a low-tax state. Our calculators use official 2026 IRS tax brackets and real cost-of-living data. All calculations run in your browser — no data is sent to any server.