States With No Income Tax: The Complete List for 2026
Nine states levy zero personal income tax, but the real question is never just "which states have no income tax" — it's whether the total tax picture actually saves you money. This guide covers every no-income-tax state, what they take instead, and the hard numbers behind relocation decisions.
Key Takeaways
- •Nine states have no broad-based personal income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
- •New Hampshire became fully income-tax-free on January 1, 2025, when it repealed its Interest & Dividends Tax — jumping from #10 to #3 on the Tax Foundation's State Tax Competitiveness Index.
- •Washington is the outlier: it imposes a 7% capital gains tax on gains above $250,000 and passed a millionaires' income tax (9.9% on income over $1M) effective 2028, pending legal review.
- •Texas has the 6th-highest property tax rate in the nation (~1.60%), which substantially offsets the income tax savings for homeowners.
- •Wyoming and Alaska consistently rank as the lowest total tax burden states — no income tax AND low-to-moderate property and sales taxes.
The No-Income-Tax Illusion (and Why It Matters)
Here is the myth I see circulate every tax season: move to Florida or Texas, pocket your state income tax bill in full. It is appealing math — if you earn $150,000 and pay California's 9.3% rate, eliminating state income tax sounds like a $13,950 annual raise. For some people, it is. For others, higher property taxes, sales taxes, and cost of living adjustments quietly recapture much of that savings.
According to WalletHub's 2026 tax burden analysis, the average American pays 9.6% of their personal income in combined state and local taxes. Alaska residents pay 5.16%. Hawaii residents pay 13.3%. The spread between no-income-tax states is itself enormous — Wyoming's total burden is roughly 7.5% while New Hampshire's is around 6.8%, despite both having no income tax. Getting the full picture requires looking at all three major state tax levers: income, property, and sales.
The 9 States With No Income Tax in 2026
The Tax Foundation confirms these nine states impose no broad-based personal income tax for 2026:
| State | Income Tax Rate | Avg. Property Tax Rate | Combined Sales Tax Rate | Total Tax Burden Rank |
|---|---|---|---|---|
| Alaska | 0% | 1.19% | 1.76% (local only) | #1 Lowest |
| Wyoming | 0% | 0.56% | 5.36% | #2 |
| Tennessee | 0% | 0.67% | 9.55% | Top 10 |
| Florida | 0% | 0.91% | 7.02% | Top 10 |
| New Hampshire | 0%* | 2.05% | 0% | Top 15 |
| Nevada | 0% | 0.55% | 8.23% | Top 15 |
| South Dakota | 0% | 1.22% | 6.40% | Top 10 |
| Texas | 0% | 1.60% | 8.25% | Middle |
| Washington | 0%** | 0.98% | 9.29% | Middle |
*New Hampshire has no income or sales tax, but has the highest property tax rate among these 9 states. **Washington imposes a 7% capital gains tax on gains above $250,000; a new 9.9% income tax on income over $1M is scheduled for 2028, pending constitutional challenge. Sources: Tax Foundation, WalletHub 2026.
State-by-State Breakdown: The Real Picture
Alaska — The Gold Standard of Low Taxes
Alaska is the only state with no income tax, no state sales tax, and no state estate tax. Per WalletHub, it carries the nation's lowest total tax burden at 5.16% of personal income. What makes Alaska truly exceptional is the Permanent Fund Dividend (PFD) — residents actually receive annual payments from the state's oil wealth, averaging around $1,300–$2,000 per resident per year. The obvious downside is geography: extreme remoteness, harsh winters, and the highest cost of goods (groceries, gas, construction) of any state, often 30–50% above national averages according to the Council for Community and Economic Research.
Best fit for: Remote workers, outdoor professionals, those in oil/gas industries, or people genuinely drawn to Alaskan life — not tax arbitrage tourists.
Wyoming — Best of Both Worlds for Most Taxpayers
Wyoming earns the #1 ranking on the Tax Foundation's 2026 State Tax Competitiveness Index. No personal income tax, no corporate income tax, low property taxes (0.56%), and modest sales taxes (5.36%). The state finances operations largely through mineral extraction revenues. For a $200,000-income household, Wyoming's total effective state/local tax burden is typically under 6% — compared to 13%+ in California or New York. The FIRE community has taken note: Wyoming's average retirement savings per resident rank in the top 15 nationally according to Empower data.
Caveat: Wyoming's economy is heavily mineral-dependent. If you're buying property, understand that boom-bust cycles affect real estate values — Casper and smaller communities saw significant price drops when energy prices fell in the 2010s.
Florida — Popular, but Run the Real Math First
Florida attracts more domestic migrants than any other state. For high-income earners — especially those relocating from New York or California — the tax savings are real and substantial. A New York City resident earning $300,000 annually can save over $25,000 per year in combined state and city income taxes by establishing Florida domicile.
However, Florida's all-in cost proposition has deteriorated. Per Bankrate's 2025 insurance analysis, Florida homeowners pay the highest home insurance premiums in the continental US, averaging $5,000–$8,000+ annually in coastal counties — driven by hurricane risk and insurer exits from the market. Florida's combined state and local sales tax rate of 7.02% is also above the national average. For lower-to-middle income households, the property insurance spike and sales tax can largely offset the income tax savings.
Texas — High Income Tax Savings, High Property Taxes
Texas illustrates the trade-off most starkly. The absence of an income tax is genuinely valuable — but Texas has the 6th-highest effective property tax rate in the nation at approximately 1.60%, with the average homeowner paying over $3,971 per year per the Tax Foundation. In high-value markets like Austin or Dallas suburbs, effective property tax bills of $8,000–$15,000 per year on a $500,000 home are common. For renters, property taxes are largely invisible but built into lease pricing.
Per CountryTaxCalc data, a single earner making $100,000 in Wyoming pays approximately $6,200 in total state/local taxes. The same earner in Texas pays approximately $7,800. The difference is property and sales taxes. For high earners ($300,000+) with modest real estate, Texas clearly wins. For average earners with expensive homes, the calculus is less obvious.
New Hampshire — The 2025 Game-Changer
New Hampshire made tax history on January 1, 2025 by fully repealing its Interest & Dividends Tax (I&D Tax), which had taxed dividend and interest income at 3%. According to the Josiah Bartlett Center for Public Policy, the repeal immediately vaulted New Hampshire from #10 to #3 on the Tax Foundation's State Tax Competitiveness Index. NH now has zero income tax and zero sales tax — making it uniquely attractive for investors and retirees who derive significant income from dividends and interest.
The catch: New Hampshire has the highest property tax rate among all nine no-income-tax states at approximately 2.05%, the 4th highest nationally. For a $400,000 home, expect $8,200/year in property taxes. This is the primary mechanism by which NH funds public services — and it falls hardest on homeowners in lower-income brackets. Renters indirectly pay through higher rents.
Washington — The Asterisked State
Washington's "no income tax" status requires two significant asterisks in 2026. First, the state enacted a 7% capital gains tax on long-term gains exceeding $250,000 per year — affecting stocks, bonds, and business interests (but not real estate). This was upheld by the Washington Supreme Court in 2023. For investors and business owners with large capital events, Washington no longer offers the same protection as Wyoming or Florida.
Second, and more dramatically: on March 30, 2026, Governor Bob Ferguson signed legislation imposing a 9.9% income tax on income exceeding $1 million annually — the largest tax increase in state history per WA House Republicans. The law takes effect January 1, 2028, but faces an almost-certain constitutional challenge given a century of Washington precedent treating income taxes as property taxes subject to the state constitution's uniformity clause. For ultra-high earners considering Washington, the legal uncertainty is itself a planning risk. Per K&L Gates analysis, courts could strike it down, but litigation takes years.
Nevada, South Dakota, and Tennessee
Nevada combines no income tax with relatively low property taxes (0.55%) but a moderately high combined sales tax rate of 8.23%. Las Vegas and the Reno-Sparks corridor are the primary relocation destinations, drawing significant California migration. Housing affordability has compressed substantially since 2020 due to that migration.
South Dakota is increasingly popular for trusts, LLCs, and financial planning due to its favorable trust laws (no rule against perpetuities), zero income tax, zero estate tax, and relatively low cost of living. Sioux Falls is the primary hub. South Dakota's total tax burden is among the nation's lowest, and it has no capital gains tax at the state level.
Tennessee completed its income-tax elimination in 2021 when the Hall Tax on interest and dividends was phased out. Low property taxes (0.67%) are a genuine differentiator. Tennessee's primary drawback is the highest combined sales tax rate among the nine states — approximately 9.55% — which disproportionately burdens lower-income households who spend a higher share of income on taxable goods.
States Eliminating Income Tax: The 2025–2026 Wave
The no-income-tax club gained a full member in 2025 (New Hampshire) and is tracking several aspiring candidates. Nine states cut their income tax rates effective January 1, 2026, per CBS News and the Tax Foundation:
| State | Previous Rate | 2026 Rate | Path to Zero? |
|---|---|---|---|
| Mississippi | 4.4% | 4.0% | 3% by 2030; possible elimination |
| Kentucky | 4.0% | 3.5% | Trigger-based reductions |
| Ohio | ~3.75% | 2.75% | Multi-year reduction plan |
| North Carolina | 4.25% | 3.99% | Legislated glide path downward |
| Georgia | 5.19% | 5.09% | 4.99% floor |
| Indiana | 3.0% | 2.95% | 2.9% in 2027 |
| Montana | ~5.9% | 5.65% | No elimination planned |
| Nebraska | ~5.84% | Reduced | Multi-year plan |
| Oklahoma | ~4.75% | Reduced | No zero target |
Mississippi is the most aggressive: Governor Tate Reeves signed legislation in March 2026 targeting a 3% flat rate by 2030, with a stated goal of full elimination if budget conditions are met. Iowa went flat at 3.8% in 2025. Louisiana dropped to 3.0% flat in 2025, down from a top marginal 4.25%.
South Carolina passed H4216 with a long-term trigger mechanism toward zero, though full elimination is likely a decade away. These trends matter for prospective relocators: a state like Mississippi at 3%–4% with a clear elimination trajectory may be a better long-term bet than one with a 0% rate that is constitutionally uncertain (see: Washington).
How Much Do You Actually Save?
Let's put real numbers to the decision. According to USAFacts data, Oregon residents paid 4.6% of personal income to state income taxes in 2023 — the highest rate in the country. Delaware and New York followed at 3.6%. For a $100,000-income earner, here are the approximate annual tax savings from relocating versus two high-tax states:
| Destination State | Income Tax Saved vs. CA | Income Tax Saved vs. NY | Net After Property/Sales Adj. |
|---|---|---|---|
| Wyoming | ~$5,762 | ~$8,500 | Strong positive |
| Alaska | ~$5,762 | ~$8,500 | Partially offset by cost of living |
| Florida | ~$5,762 | ~$8,500 | Mixed; insurance costs rising |
| Texas | ~$5,762 | ~$8,500 | Partially offset by property tax |
| New Hampshire | ~$5,762 | ~$8,500 | Partially offset by property tax |
| Tennessee | ~$5,762 | ~$8,500 | Partially offset by high sales tax |
Estimates based on CountryTaxCalc data and Tax Foundation effective rate analysis. Individual results vary significantly based on income type, homeownership, and local jurisdictions. CA marginal rate of 9.3% at $100K income; NY state rate of ~6.85% plus local taxes for NYC residents.
The savings become dramatically more compelling at higher incomes. A $500,000 earner moving from California (which hits 12.3% at that income level) to Wyoming saves approximately $60,000+ per year in state income tax. At that income level, even Texas's higher property taxes represent a small fraction of the income tax savings.
Compare your state tax picture with our complete state tax ranking or use the income tax calculator to see your current federal and state liability.
The SALT Deduction Context
The federal State and Local Tax (SALT) deduction complicates the math for high earners. Under the Tax Cuts and Jobs Act of 2017, the SALT deduction was capped at $10,000 for individuals and married couples filing jointly. Under the One Big Beautiful Bill (OBBBA) framework being debated in 2026, Congress is considering raising this cap. The current $10,000 cap means high-income residents in California or New York receive zero federal benefit from paying $30,000–$50,000 in annual state taxes — making the net federal return on state tax payments effectively zero above the cap.
For a high earner who is already at the $10,000 SALT cap, every dollar of state income tax paid is purely lost — no federal offset. This makes no-income-tax states even more compelling at higher income levels, because the marginal federal benefit of state taxes is zero above the cap.
Domicile and Residency: The Trap That Catches Relocators
Establishing residency in a no-income-tax state is not simply a matter of renting an apartment. California and New York have aggressive tax audit programs specifically targeting high earners who claim to have moved. California's Franchise Tax Board (FTB) is particularly aggressive: it audits former residents for up to four years after their stated departure date and has successfully assessed hundreds of millions in back taxes from claimed Florida and Nevada relocations.
A genuine domicile change requires all of the following documented steps: obtaining a new driver's license, registering to vote in the new state, filing a declaration of domicile (Florida has a formal process), changing your mailing address with the IRS and all financial institutions, and physically spending more days in the new state than in California or New York. The FTB's audit team counts cell phone location data, credit card transactions, and social media check-ins. The 183-day rule is a floor, not a guarantee.
The IRS itself does not have a residency requirement for income taxes (you pay federal taxes regardless of state), but it is relevant for state tax purposes. See our guide to remote work state income tax rules for the specific rules around working across state lines.
Retirement Income in No-Income-Tax States
For retirees, no-income-tax states are particularly powerful. Even in states that do have income taxes, many exempt certain retirement income — but a blanket zero rate eliminates any complexity. In Wyoming, Florida, Alaska, Nevada, South Dakota, Tennessee, and New Hampshire, the following retirement income types face zero state tax:
- 401(k) and IRA distributions
- Social Security benefits
- Pension income (government and private)
- Dividend and interest income
- Capital gains (except Washington)
- Roth IRA distributions
Federal taxes still apply. Per IRS rules, up to 85% of Social Security benefits can be federally taxable depending on your provisional income. Use our Social Security taxation guide to calculate your federal exposure. But the complete absence of state-level tax on all these income streams makes no-income-tax states dramatically superior for retirement planning — particularly for those drawing heavily from pre-tax retirement accounts.
A retiree with $150,000 in annual 401(k) withdrawals living in New York would owe approximately $7,000–$9,000 in New York state income tax. The same income in Wyoming or Florida: $0. Over a 25-year retirement, that differential compounds into $175,000–$225,000 in additional wealth.
Total Tax Burden Rankings: The Bottom Line
WalletHub's 2026 annual tax burden report expresses state tax burden as a percentage of personal income across all major tax categories. Here is where each no-income-tax state lands:
| State | Total Tax Burden (% of Income) | National Rank (1 = lowest) |
|---|---|---|
| Alaska | 5.16% | #1 |
| Wyoming | ~7.5% | #2 |
| South Dakota | ~7.6% | Top 5 |
| Florida | ~7.8% | Top 10 |
| New Hampshire | ~6.8% | Top 10 |
| Nevada | ~8.2% | Top 10 |
| Tennessee | ~7.5% | Top 10 |
| Texas | ~8.6% | ~#20–25 |
| Washington | ~8.9% | ~#20–25 |
Compare these against the highest-burden states: New York at 12.28% total burden and Hawaii at 13.3%. For reference, the national average is 9.6%. Every no-income-tax state falls below the national average — but the spread within the group is significant. Alaska at 5.16% is a fundamentally different tax environment than Washington at 8.9%.
Frequently Asked Questions
Which state has the absolute lowest total tax burden?
Alaska has the lowest total tax burden at 5.16% of personal income, per WalletHub's 2026 analysis. It has no income tax, no state sales tax, and moderate property taxes — and uniquely pays residents an annual Permanent Fund Dividend from oil revenues. The major trade-off is cost of living, which runs 30–50% above the national average due to remote geography and supply chain costs.
Does Washington State really have no income tax?
Washington has no general income tax on wages and ordinary income — but it does impose a 7% capital gains tax on long-term gains above $250,000 per year on stocks, bonds, and business assets. Additionally, Governor Ferguson signed a new 9.9% income tax on income exceeding $1 million annually in March 2026, effective 2028, though this faces near-certain constitutional challenge given Washington's legal history.
If I move to a no-income-tax state, can my old state still tax me?
Yes, if you retain significant ties to the old state. California and New York in particular audit former high-income residents aggressively for up to four years after departure. A genuine domicile change requires new driver's license, voter registration, physical presence of 183+ days, and changes to banking and financial accounts. The burden of proof falls on the taxpayer to demonstrate a bona fide move.
Is New Hampshire really tax-free now?
Yes. New Hampshire repealed its Interest & Dividends Tax (I&D Tax) effective January 1, 2025. The state now has zero income tax and zero sales tax — a combination shared only with Alaska among all 50 states. NH does have the highest property tax rate among no-income-tax states at ~2.05%, which is the primary mechanism for funding state services.
Are any new states about to eliminate income taxes?
Mississippi is on the most aggressive path: the state is reducing its flat income tax toward 3% by 2030 with explicit legislative intent to eliminate it entirely. South Carolina passed H4216 with a long-term trigger mechanism toward zero. Kentucky, Ohio, and North Carolina are all on legislated downward paths but have not stated a zero target. Iowa (3.8% flat) and Louisiana (3.0% flat) may see further reductions pending budget conditions.
Do no-income-tax states still tax Social Security and retirement income?
In all nine no-income-tax states (except Washington's capital gains carve-out), there is zero state tax on Social Security benefits, 401(k) distributions, pension income, IRA withdrawals, dividends, or capital gains. Federal taxes still apply to all these income types regardless of your state. Up to 85% of Social Security can be federally taxable; use our Social Security tax guide to estimate your federal exposure.
Which no-income-tax state is best for retirees?
For homeowning retirees: Florida (low property tax, warm climate, Medicare Advantage options) and Tennessee (very low property tax, low cost of living). For renters or smaller real estate footprints: Wyoming and South Dakota offer the lowest total tax burdens. New Hampshire offers no income or sales tax but the highest property taxes among the group — better for those with modest real estate who live off investment income.
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