States With No Income Tax
Nine US states charge absolutely zero income tax on wages and salaries. A $150K earner saves $9,500-$14,000/year by moving from a high-tax state to one of these nine.
But no income tax does not mean no taxes. Below, we compare all nine states across property tax, sales tax, and cost of living so you can find the right fit for your situation.
9
States With 0% Income Tax
$9.5K+
Avg Savings at $150K
100M+
Combined Population
2
Also Have No Sales Tax
Why No-Income-Tax States Matter
State income tax is often the largest state-level tax most workers pay. In California, a $150,000 earner pays roughly $11,700 in state income tax alone. In New York, that same earner pays about $9,500. Move to any of the nine states below, and that liability drops to zero.
Over a 10-year career, the difference can be worth $95,000-$140,000 or more. That is enough to fund a house down payment, max out retirement accounts, or invest for generational wealth. Here is everything you need to know about each state.
The 9 No-Income-Tax States
Each of these states has eliminated or never imposed a state income tax on wages. Click on any state with a guide link for a deep dive into relocation considerations.
Alaska
AK0% income tax, 0% state sales tax
No income tax AND no sales tax. Residents receive an annual Permanent Fund Dividend (PFD) from oil revenue -- typically $1,000-$2,000 per person. Higher cost of living due to remote geography, but fully tax-free on wages and purchases.
Sales Tax
0%
Prop. Tax
1.04%
COL Index
127
Florida
FL0% income tax, 6.00% sales tax
The most popular no-income-tax destination in America. Florida combines zero income tax with relatively low property taxes and a moderate sales tax. Its massive economy, warm climate, and absence of a state estate tax make it a top relocation choice for retirees and high earners alike.
Sales Tax
6.00%
Prop. Tax
0.89%
COL Index
100
Nevada
NV0% income tax, 6.85% sales tax
Nevada offers zero income tax combined with the lowest property tax rate among no-income-tax states. Las Vegas and Reno provide growing job markets in tech, hospitality, and logistics. The state has no corporate income tax either, attracting business relocations.
Sales Tax
6.85%
Prop. Tax
0.53%
COL Index
104
New Hampshire
NH0% wage tax, 0% sales tax, 4% on dividends (phasing out)
New Hampshire taxes neither wages nor sales -- a rare double zero. However, there is a 4% tax on interest and dividends income, which is being phased out and will reach 0% by 2027. Property taxes are among the highest in the country at 1.86%, which is how the state funds public services without an income or sales tax.
Sales Tax
0%
Prop. Tax
1.86%
COL Index
112
South Dakota
SD0% income tax, 4.50% sales tax
South Dakota is one of the most tax-friendly states in the country. Beyond zero income tax, it has no corporate income tax, no personal property tax, and no inheritance tax. The low cost of living (8% below national average) stretches your dollar further. Sioux Falls is emerging as a financial services hub.
Sales Tax
4.50%
Prop. Tax
1.14%
COL Index
92
Tennessee
TN0% income tax, 7.00% sales tax
Tennessee fully eliminated its income tax on investment income (the Hall Tax) in 2021, making it completely income-tax-free. The trade-off is one of the highest combined sales tax rates in the nation (up to 9.75% with local taxes). However, Tennessee's very low property taxes and cost of living (10% below average) make it a strong net win for most earners. Nashville's booming economy is a major draw.
Sales Tax
7.00%
Prop. Tax
0.66%
COL Index
90
Texas
TX0% income tax, 6.25% sales tax
Texas is the second-most-popular state in the U.S. by population and the top destination for domestic migration. Zero income tax on all earnings, combined with a massive and diversified economy spanning tech, energy, healthcare, and defense. The main trade-off is higher-than-average property taxes at 1.80%. A $150K earner saves roughly $11,700/year vs. California. Major metros include Austin, Dallas-Fort Worth, Houston, and San Antonio.
Sales Tax
6.25%
Prop. Tax
1.80%
COL Index
93
Washington
WA0% income tax, 6.50% sales tax
Washington combines zero income tax with one of the strongest tech economies in the country -- home to Amazon, Microsoft, Boeing, and Starbucks. A 7% capital gains tax applies to gains above $250K on stocks and bonds (not real estate). Higher cost of living in the Seattle metro, but more affordable in areas like Spokane and Tri-Cities. Sales tax can reach 10.25% with local add-ons.
Sales Tax
6.50%
Prop. Tax
0.98%
COL Index
114
Wyoming
WY0% income tax, 4.00% sales tax
Wyoming is one of the most tax-friendly states in America. No income tax, no corporate tax, low sales tax (4%), and low property taxes (0.57%). It also has strong asset protection laws and no estate or inheritance tax. The cost of living is below the national average. The trade-off is a smaller economy and rural lifestyle, though Cheyenne and Jackson Hole offer distinct opportunities.
Sales Tax
4.00%
Prop. Tax
0.57%
COL Index
95
Side-by-Side Comparison
Compare the key tax metrics and living costs of all nine no-income-tax states at a glance. The national average cost of living index is 100.
| State | Income Tax | State Sales Tax | Avg Property Tax | COL Index | Key Note |
|---|---|---|---|---|---|
Alaska AK | 0% | 0% | 1.04% | 127 | No sales tax, Annual PFD check |
| FL | 0% | 6.00% | 0.89% | 100 | Largest no-tax economy, No estate tax |
| NV | 0% | 6.85% | 0.53% | 104 | Lowest property tax in group, No corporate income tax |
New Hampshire NH | 0% | 0% | 1.86% | 112 | No sales tax either, Dividend tax phasing out |
| SD | 0% | 4.50% | 1.14% | 92 | Below-average cost of living, No corporate income tax |
| TN | 0% | 7.00% | 0.66% | 90 | Lowest cost of living in group, Very low property tax |
| TX | 0% | 6.25% | 1.80% | 93 | Largest job market in group, #1 domestic migration |
| WA | 0% | 6.50% | 0.98% | 114 | Major tech employers, No tax on wages |
| WY | 0% | 4.00% | 0.57% | 95 | Lowest sales tax in group, No corporate tax |
| National Avg | 4.6% | 5.09% | 1.10% | 100 | Baseline for comparison |
Sales tax rates shown are state-level only; local taxes can add 1-4% more. Property tax rates are statewide averages and vary significantly by county. Cost of Living Index: 100 = national average. Sources: Tax Foundation, U.S. Census Bureau, BLS.
What You Should Know Before Moving
Zero income tax sounds incredible -- and the savings are real. But informed decision-making requires looking at the full picture. Here are the critical trade-offs to understand.
Property Taxes Are Often Higher
States without income tax still need revenue for schools, roads, and services. Many compensate through property taxes. Texas averages 1.80% and New Hampshire averages 1.86% -- both well above the national average of 1.10%. On a $400,000 home, that is $7,200-$7,440/year in property tax alone.
The math still works for most earners: A $150K earner moving from California to Texas saves ~$11,700 in income tax and pays ~$2,800 more in property tax (assuming a $400K home), netting ~$8,900 in savings. But for lower earners or those buying expensive homes, the advantage shrinks.
Sales Tax Rates Vary Widely
Tennessee has one of the highest combined sales tax rates in the country at up to 9.75% (state + local). Washington can reach 10.25% in some areas. On the other end, Alaska and New Hampshire have no state sales tax at all.
Impact: If you spend $50,000/year on taxable goods, a 7% sales tax costs $3,500 annually. This is meaningful, but typically far less than the income tax savings for earners above $75K. Sales tax also only applies to purchases, not savings or investments.
Cost of Living Varies Dramatically
Not all no-income-tax states are cheap. Washington (especially Seattle) and Alaska have above-average costs of living. Meanwhile, Tennessee, South Dakota, Texas, and Wyoming are below the national average. Florida sits right at the average.
The takeaway: Moving from a high-cost, high-tax state like California or New York to a low-cost, no-tax state like Tennessee or Texas produces a double benefit. Moving to Washington gets you tax savings but potentially similar housing costs.
Federal Taxes Still Apply
To be clear: moving to a no-income-tax state does not make you tax-free. You still pay federal income tax, Social Security (6.2%), and Medicare (1.45%) on your earnings. What you eliminate is the state income tax layer, which ranges from 3% to over 13% in high-tax states. For a $150K earner, that state layer alone is worth $4,500-$14,000/year -- a meaningful component of your total tax burden.
For Most High Earners, the Net Math Works
If you earn $100,000 or more, moving from a high-tax state to a no-income-tax state almost always results in a net financial positive -- even after accounting for higher property taxes and sales tax. The higher your income, the larger your savings.
At $100K: save ~$3,000-$5,500 net. At $150K: save ~$6,000-$11,000 net. At $200K: save ~$10,000-$18,000 net. These figures account for property and sales tax differences.
Calculate Your Exact Savings
Stop guessing. Our free paycheck calculator shows your take-home pay in any state, factoring in federal tax, state tax, FICA, and deductions. Compare your current state to any no-income-tax state in seconds.
$100K Salary
$5,500
Saved vs California
$150K Salary
$11,700
Saved vs California
$200K Salary
$18,200
Saved vs California
Who Benefits Most From No-Income-Tax States?
No-income-tax states offer different levels of benefit depending on your income, career, and lifestyle. Here is who gains the most.
High-Income Earners ($100K+)
The higher your income, the more you save. State income tax is progressive in most states, meaning high earners pay a disproportionately large share. A $200K earner in California pays over $18,000 in state income tax. Moving to Texas, Florida, or any no-tax state makes that number zero.
Remote Workers
Remote workers with location flexibility have a unique advantage. You can keep your high-paying job at a California or New York company while living in a no-income-tax state and paying zero state income tax. This is the single largest financial optimization available to remote professionals today.
Retirees
Retirees living on Social Security, pensions, and investment income benefit significantly. States like Florida and Tennessee have no income tax on any of these income sources. Combined with no estate tax in most of these states, retirees can protect more wealth for their families.
Business Owners & Freelancers
Self-employed professionals and business owners often pay state income tax on pass-through income. In no-income-tax states, that business income is only subject to federal tax. States like Wyoming, South Dakota, and Nevada also have no corporate income tax, making them popular for business formation.
How to Choose the Right No-Income-Tax State
All nine states offer zero income tax, but they differ significantly in other ways. Use these criteria to narrow your decision.
1Prioritize by Total Tax Burden
If minimizing total taxes is your priority, compare not just income tax but also property tax, sales tax, and any special taxes (like Washington's capital gains tax). Wyoming and South Dakota have the lightest overall tax burdens. Alaska and New Hampshire have no sales tax either but come with trade-offs in other areas.
2Consider the Job Market
Texas, Florida, and Washington have the largest and most diverse job markets. Texas leads in domestic migration for a reason -- its economy spans tech, energy, healthcare, and defense. Washington is home to Amazon, Microsoft, and Boeing. Florida's economy is strong in finance, tourism, and healthcare. Smaller states like Wyoming and South Dakota have limited job opportunities but are ideal for remote workers.
3Factor in Climate and Lifestyle
These nine states cover every climate imaginable. Florida and Texas offer year-round warmth. Alaska and Wyoming have harsh winters. Washington provides mild, rainy Pacific Northwest weather. Tennessee has four distinct seasons. Climate affects not just comfort but also energy costs, insurance rates, and quality of life.
4Run Your Specific Numbers
General comparisons only go so far. Your income level, filing status, home value, spending habits, and family size all affect the calculation. Use our paycheck calculator to see your exact take-home pay in each state, and our cost of living calculator to compare overall expenses between your current city and potential destinations.
Frequently Asked Questions
Common questions about no-income-tax states, answered with data.
Which states have no income tax?
Nine US states have no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire is unique in that it still taxes interest and dividend income at 4%, but that rate is being phased out and will reach 0% by 2027. All other eight states tax neither wages nor investment income.
Do no-income-tax states make up for it with higher taxes elsewhere?
Yes, most no-income-tax states compensate with higher sales taxes, property taxes, or both. For example, Texas has property taxes averaging 1.80% (well above the national average of ~1.1%), while Tennessee has combined sales tax rates that can exceed 9.75%. Alaska and New Hampshire are exceptions -- they also have no state sales tax. The key is to calculate your total tax burden, not just income tax, when comparing states.
How much can I actually save by moving to a no-income-tax state?
Savings depend heavily on your income level and which state you are leaving. A single filer earning $100,000 would save approximately $5,500/year moving from California, $4,700 from New York, or $4,400 from New Jersey. At $150,000, those savings jump to roughly $9,500-$14,000. At $200,000+, savings can exceed $18,000 annually. However, you must account for property tax differences and cost-of-living changes to determine your true net savings.
What is the best no-income-tax state to move to?
The best state depends on your priorities. Florida and Texas are the most popular choices due to their large economies, job markets, and warm climates. Nevada offers the lowest property taxes in the group. Tennessee and South Dakota have the lowest cost of living. Washington state provides access to major tech employers. Wyoming offers the lightest overall tax burden. Alaska pays residents an annual dividend but has a high cost of living. Use our paycheck calculator to compare your after-tax income in each state.
Do I still have to pay federal income tax in a no-income-tax state?
Yes, absolutely. Federal income tax applies to all US residents regardless of which state they live in. Moving to a no-income-tax state only eliminates your state income tax liability. You will still owe federal income tax, FICA taxes (Social Security and Medicare), and possibly self-employment tax. The savings from eliminating state income tax are real and significant, but they do not eliminate your overall tax obligation.
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