Does no income tax mean lower total taxes?

Not by itself. These states fund government through some combination of sales tax, property tax, and excise tax instead. Whether the total burden is actually lower depends on income level, whether you own a home, and how much you spend on taxable purchases.

How much can you save by moving to a no-income-tax state?

There is no reliable salary-only answer. Compare the state income tax that would apply to your filing status and taxable income, then add local wage taxes, mandatory payroll deductions, housing, property tax, and sales tax. A marginal state rate multiplied by salary is not an accurate estimate.

What is the total tax burden in no-income-tax states?

It depends on the household and location. State and local sales taxes, property taxes, excise taxes, and housing costs vary within each state, so compare the exact city, county, and property rather than relying on a statewide average.

Is New Hampshire truly a no-income-tax state?

As of January 1, 2025, yes. The Interest & Dividends Tax was fully repealed, so New Hampshire now imposes no individual income tax on wages, interest, dividends, or capital gains. The state offsets the loss through property tax (among the highest effective rates in the country) and Meals & Rooms tax.

States With No Income Tax 2026: Full List & Payroll Impact

Q: Which states have no income tax in 2026?

Nine: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire joined the list outright when its Interest & Dividends Tax was fully repealed effective January 1, 2025.

The 9 States With No Income Tax

There are currently nine states with no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire joined the list outright in 2025; its Interest & Dividends Tax, the last remaining individual income tax in the state, was fully repealed effective January 1, 2025. Each of these states funds operations from some mix of sales tax, property tax, severance tax (mineral extraction), corporate tax, and excise duties on fuel, alcohol, and tobacco.

The list describes individual income tax on wages. It does not mean every resident has no state tax filing obligation or that investment and business income are treated identically. Washington's capital-gains tax is the clearest example of why the distinction matters.

How No-Income-Tax States Affect Your Pay Stub

The clearest effect on a paycheck is no state individual-income-tax withholding line for wages. That does not change federal withholding or FICA, and it does not remove a local wage tax where one applies.

Federal income tax and FICA rules are federal. Local wage taxes can still apply; for example, Philadelphia's resident wage-tax rate is 3.735% effective July 1, 2026.

Remote work can create obligations in more than one state, especially when the employee works in one state for an employer based in another. See our guide on remote and multi-state workers before assuming a move immediately ends withholding elsewhere.

Other Taxes in No-Income-Tax States

Sales and property taxes vary by locality and by what you buy or own. Compare the combined rate at the actual address, the assessed value and exemptions for a specific property, and whether major household purchases are taxable. Statewide averages are useful for orientation, not a personal budget.

Corporate taxes differ too. Texas and Florida have no broad-based corporate income tax. Tennessee has a long-standing franchise and excise tax on businesses; it predates the Hall Income Tax repeal (which took effect for tax years beginning January 1, 2021) and was not enacted as a replacement for it, despite a common misconception. Excise taxes on fuel, alcohol, and tobacco are quiet but persistent. None of those show up on a pay stub, but they all factor into a fair state-by-state comparison.

Comparing No-Income-Tax States to High-Tax States

To compare two locations, calculate federal payroll taxes once, then add each location's state withholding, local wage taxes, and mandatory payroll programs using the same filing assumptions. Keep housing and consumption taxes in a separate household budget. This avoids presenting a marginal rate or statewide average as if it were the worker's actual tax bill.

Special Cases: New Hampshire and Washington

New Hampshire's Interest & Dividends Tax was repealed for tax periods beginning on or after January 1, 2025. The state now has no broad individual income tax and no general state sales tax, but property and Meals & Rooms taxes still matter to a household comparison.

Washington has no individual income tax on wages, but it taxes certain long-term capital gains. Beginning with tax year 2025, the first $1 million of taxable Washington capital gains is taxed at 7% and taxable gains above $1 million at 9.9%, after applicable deductions and exemptions. The standard deduction was $278,000 for tax year 2025; check the Department of Revenue for the indexed amount for the year being filed.

Is Moving to a No-Income-Tax State Right for You?

Before moving, compare the actual job offer and work-location rules, state and local taxes, property-specific costs, insurance, and housing. For a high-stakes decision, use current state calculators or a tax professional who can model both locations with the same household facts.

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