Which States Have No Income Tax? A Complete Guide for 2026

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list outright in 2025; its Interest & Dividends Tax, the last remaining individual income tax in the state, was fully repealed effective January 1, 2025.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 geographic spread is broad: Alaska and Washington on the coasts, Wyoming and the Dakotas in the interior, Florida, Tennessee, and Nevada scattered between. Texas covers more ground than France. Population-wise, Florida (about 22 million) is in Texas's ballpark, while Wyoming (around 580,000) is the least-populous state in the country.

The revenue has to come from somewhere. Washington's combined state-and-local sales tax runs roughly 6.5% to 10.25% depending on county, Texas's runs about 6.25% state plus up to 2% local, and Nevada's tops out around 8.4%. Wyoming and South Dakota keep sales tax modest but lean heavily on severance taxes (mineral extraction) and, in South Dakota, sales tax on a broader base. New Hampshire is one of the few states with no state sales tax at all but compensates with property tax rates that rank among the highest in the country and a Meals & Rooms tax.

How No-Income-Tax States Affect Your Pay Stub

The most visible effect on a paycheck is that there's no state income tax line on the pay stub. On a $5,000 biweekly check, Texas withholds $0 in state income tax while Colorado at 4.4% takes roughly $220, or about $5,700 a year, before factoring in Colorado's standard deduction and any TABOR refunds.

Federal income tax and FICA are identical across states. Local wage taxes (NYC, Philadelphia at 3.74% effective July 2025, Kansas City) still bite where they apply.

Remote workers with portable income see the largest absolute gains. A freelancer earning $100,000 who moves from California to Texas saves several thousand a year in state income tax. Over a working career, compounded, that's meaningful. The honest caveat is that housing costs in Austin, Tampa, and Nashville have run up sharply over the past several years, and Texas property taxes (effective rate around 1.6% to 1.8%) can swallow much of the income-tax savings for homeowners. See our guide on remote and multi-state workers for cross-state withholding mechanics.

Other Taxes in No-Income-Tax States

The sales-tax piece is the easiest to underestimate. Washington's state-and-local combined sales tax runs roughly 6.5% to 10.25% depending on county. Texas runs about 6.25% state plus up to 2% local for a combined maximum near 8.25%. Tennessee's combined rate averages close to 9.5%, the highest in the country once local add-ons are layered in. On a household that spends $40,000 a year on taxable goods, an extra two or three percentage points in sales tax is real money.

Property taxes vary even more sharply. Wyoming (around 0.55% effective rate) and South Dakota (around 1.0%) are on the low side. Florida sits near 0.9% to 1.0%. Texas is at the high end at roughly 1.6% to 1.8% on the state's effective rate measures, and New Hampshire is the highest of the no-income-tax states at roughly 1.8% to 2.0% effective. On a $400,000 home, that's the difference between a $4,000 annual bill and a $7,500 one.

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 matter when you're comparing two states honestly.

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

An $80,000 salary in Texas nets roughly $65,900 after federal income tax and FICA (no state tax). The same salary in California, after CA state tax and SDI, nets somewhere around $59,500 to $60,500 depending on filing status. Texas comes out about $5,400 to $6,400 ahead per year on take-home, before any difference in cost of living.

That gap can vanish quickly. Austin and Tampa have run up significantly in housing cost; Nashville and Boise have followed. A homeowner in Texas paying 1.7% effective property tax on a $500,000 house owes roughly $8,500 a year in property tax, more than the entire income-tax savings on a five-figure income.

High earners benefit the most in absolute dollars. At $300,000 in W-2 income, California state tax (after deductions) is roughly $25,000-$27,000. Move to Texas and that whole line disappears, though property and sales tax soak up some of the gain. Middle earners save more like $2,000 to $3,500. Workers near the bottom of the income distribution often already pay little state income tax thanks to refundable credits like the EITC, so the move-for-taxes math doesn't really apply.

Special Cases: New Hampshire and Washington

New Hampshire was the oddball through 2024 because of its Interest & Dividends Tax. That tax was fully repealed effective January 1, 2025, so as of tax year 2025 forward, New Hampshire has no individual income tax of any kind. Wages, interest, dividends, and capital gains are all untaxed at the state level. The state offsets the lost revenue largely through property tax, which carries one of the highest effective rates in the country at roughly 1.8% to 2.0%, and through the Meals & Rooms tax. New Hampshire has no general state sales tax, which is the distinctive feature that draws cross-border shoppers from Massachusetts and Maine.

Washington remains the other special case for investors. The state has no individual income tax on wages, but it has imposed a 7% capital gains tax on certain long-term gains above an annual standard deduction (around $278,000 in 2025-2026). For tax year 2025 (filed in 2026), Washington added a second tier: an additional 2.9% on taxable capital gains above $1 million, for a combined 9.9% effective rate on the highest tier. That layer applies only to gains above the $1 million threshold, after the standard deduction. For high-net-worth founders and investors, the Washington capital gains regime now plays a meaningfully larger role than it did when the law first took effect in 2022.

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

A move starts to make financial sense at higher incomes, with remote or portable work, and without strong ties to a specific labor market. At $150,000-plus, the dollar savings on a state-income-tax move are real and recurring. Remote workers with stable employers can usually capture them cleanly, subject to whether their employer is registered to pay payroll tax in the destination state.

For specific careers, the destination still has to support the job: Austin and Dallas have meaningful tech labor markets, Florida hospital systems are aggressively hiring nurses, Nashville's healthcare and music industries draw creatives. The income-tax advantage doesn't help if you can't find work at a comparable rate.

Before moving, run the full comparison: income tax, sales tax, property tax (especially in Texas and New Hampshire), and housing costs. A worker saving $5,000 in income tax who pays $10,000 more in property tax and rent has lost ground. Tools like Tax Foundation's state-by-state burden data, Zillow's median listing prices, and the BLS Consumer Price Index regional breakdowns are all useful inputs.