Saving on state income tax only helps if the cost of living is comparable. Use the cost of living calculator to find your salary equivalent after adjusting for regional price differences.
States with No Income Tax 2026: All 9 States, Trade-offs & Net Pay
Nine states have no state income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. This complete states with no income tax list covers every state in detail. Whether you are looking for the best states for taxes, states with lowest tax burden, want to move to a no tax state, understand remote worker state taxes, or track which states are eliminating income tax: this guide has the no income tax states list, net pay comparisons, hidden trade-offs, and best states for retirees and remote workers.
States with No Income Tax 2026: Complete List
The nine no income tax states 2026 are confirmed by the Tax Foundation. Every worker in these states pays zero state income tax on wages, salaries, and self-employment income: though federal income tax and FICA apply in all states equally. This is not a new development: most of these states have had no income tax for decades.
The 9 No Income Tax States 2026
Source: Tax Foundation 2026 State Individual Income Tax Rates. Note: Washington levies a 7% capital gains tax on long-term gains above $262,000. New Hampshire eliminated its Interest & Dividends tax January 1, 2025: now truly zero income tax on all personal income.
| State | State income tax | Sales tax (avg) | Effective property tax | Capital gains tax | Total burden rank |
|---|---|---|---|---|---|
| Alaska | None | 1.76% avg (no state sales tax) | ~1.19% | None | ✅ Lowest: ~5.16% total |
| Florida | None | 7.01% avg | ~0.86% | None | ✅ Low: ~6.33% total |
| Nevada | None | 8.23% avg | ~0.55% | None | ✅ Low: ~8.23% total |
| New Hampshire | None (I&D tax repealed Jan 2025) | 0% (no sales tax) | ~1.89% to 2.18% | None | Moderate: high property tax |
| South Dakota: South Dakota no income tax | None | 6.11% avg | ~1.08% | None | ✅ Low: ~7.37% total |
| Tennessee | None (Hall Tax repealed 2021) | 9.55% avg: highest in US | ~0.63% | None | Moderate: high sales tax |
| Texas | None | 8.19% avg | ~1.60%: high | None | Moderate: high property tax |
| Washington | None on wages | 9.38% avg: 2nd highest US | ~0.87% | 7% on gains above $262,000 | Moderate: high sales tax |
| Wyoming | None | 5.36% avg | ~0.56% | None | ✅ Very low: ~7.5% total |
Sources: Tax Foundation 2026, WalletHub 2026 state tax burden analysis, state revenue department data. Total burden = combined state and local income, property, sales, and excise taxes as percentage of personal income.
Net Pay Comparison: Same Salary, Different States
The most concrete way to understand the value of no state income tax is to compare take-home pay on the same gross salary across states. The table below shows estimated annual net pay for a single filer earning $70,000 across five states: same federal tax, same FICA, different state income tax.
| State | State income tax rate | Annual state tax | Est. annual net pay | vs Texas (no tax) |
|---|---|---|---|---|
| Texas (no tax) | 0% | $0 | ~$53,324 | , |
| Florida (no tax) | 0% | $0 | ~$53,324 | $0 |
| Wyoming (no tax) | 0% | $0 | ~$53,324 | $0 |
| Georgia | 5.09% flat | ~$2,728 | ~$50,596 | −$2,728 |
| North Carolina | 4.5% | ~$2,409 | ~$50,915 | −$2,409 |
| Ohio | 2.75% flat | ~$1,474 | ~$51,850 | −$1,474 |
| New York (state only) | 5.85% | ~$3,133 | ~$50,191 | −$3,133 |
| New York City | 10.9% state + 3.876% city | ~$5,853 | ~$47,471 | −$5,853 |
| New Jersey | 6.37% eff. | ~$3,413 | ~$49,911 | −$3,413 |
| California | 9.3% eff. | ~$4,674 | ~$48,650 | −$4,674 |
Estimates based on 2026 federal and state rates, standard deduction $16,100 single, FICA 7.65%, no local taxes except NYC. Use the take-home pay calculator for your exact net in any state.
| Annual salary | Texas net | Florida net | California net | New York net | NYC net |
|---|---|---|---|---|---|
| $50,000 | ~$38,175 | ~$38,175 | ~$34,800 | ~$35,650 | ~$33,800 |
| $70,000 | ~$53,324 | ~$53,324 | ~$48,650 | ~$50,191 | ~$47,471 |
| $100,000 | ~$73,530 | ~$73,530 | ~$65,900 | ~$68,450 | ~$63,600 |
| $150,000 | ~$106,200 | ~$106,200 | ~$93,800 | ~$97,400 | ~$89,100 |
| $200,000 | ~$137,800 | ~$137,800 | ~$118,400 | ~$124,600 | ~$113,500 |
Each No Income Tax State: Texas No Income Tax, Florida No Income Tax, and All 9 States
No two no-income-tax states are alike. The tax trade-offs, cost of living, and target demographic for each state vary considerably. Understanding the full picture for each state is essential before treating "no income tax" as a synonym for "low taxes."
| State | How revenue is raised instead | Key asterisk | Best suited for |
|---|---|---|---|
| Alaska | Oil revenue, no sales tax (municipalities may levy up to 7.5%), modest property tax | Extremely remote; limited job market; Permanent Fund Dividend pays residents ~$1,000+/year | Remote workers, outdoor-focused lifestyle, lowest total tax burden |
| Florida | 6% sales tax + local (avg 7.01%), corporate income tax 5.5%, property tax ~0.86% | Homestead exemption ($50,000) lowers property taxes for primary residence. Hurricane insurance expensive. | Retirees, high earners, families: best all-around no-tax state for most people |
| Nevada | 8.23% combined sales tax, gaming revenue, commerce tax on large businesses | Tourism-dependent economy; Las Vegas metro dominates job market | Workers in hospitality/gaming, high earners seeking low property tax (0.55%) |
| New Hampshire | No sales tax, but property tax ~1.89% to 2.18%: highest among no-tax states | I&D tax fully repealed Jan 1 2025. Now truly zero income tax. Property tax is the trade-off. | Renters, workers near Boston commuter belt, those valuing no sales tax |
| South Dakota | 6.11% combined sales tax, agricultural and financial industry revenue | Low cost of living; Sioux Falls is financial industry hub; cold winters | Remote workers, retirees, low-cost-of-living seekers |
| Tennessee | 9.55% combined sales tax: highest in the US; property tax ~0.63% | Hall Tax fully repealed 2021. No income tax on any personal income now. | Retirees (Nashville, Knoxville), middle-income workers: low cost of living |
| Texas | Property tax ~1.60% effective: one of the highest in the US; 8.19% sales tax | Homestead exemption ($100,000 school district) available. No capital gains tax. | High earners, tech workers, businesses: but homeowners pay heavily |
| Washington | 9.38% combined sales tax (2nd highest US); 7% capital gains tax on gains above $262,000 | The capital gains tax makes WA a partial exception for investors with large capital events | W-2 tech workers (Amazon, Microsoft corridor), not ideal for investors/founders |
| Wyoming | 5.36% sales tax; mineral/energy severance taxes; no capital gains tax | Small population; limited services; energy-dependent economy | High net worth individuals, ranchers, remote workers, 2nd lowest total burden |
Texas vs Florida Taxes: No Income Tax State Head to Head
Texas and Florida are the two most popular no-income-tax states for relocation. Both have zero state income tax and zero capital gains tax. The difference comes down to property taxes, homestead exemptions, cost of living, and climate. This comparison is one of the most searched questions on state taxes: and the answer is nuanced.
Texas: No Income Tax
Florida: No Income Tax
For homeowners, Florida wins on property taxes: the difference on a $350,000 home is approximately $2,590 per year less than Texas. For renters earning high incomes, both states are essentially identical in tax cost. Texas has a stronger tech job market (Austin), while Florida has stronger retirement infrastructure and warmer weather year-round. Neither state taxes Social Security benefits, pension income, or retirement account withdrawals at the state level.
Hidden Tax Trade-offs: When No Income Tax Costs More
The phrase "no income tax state" has become shorthand for "low tax state": but this is often wrong. States without income tax generate revenue through other mechanisms. For many middle-income households, the total tax burden in a no-income-tax state can equal or exceed what they would pay in a moderate income-tax state.
The Texas vs California Middle-Income Reality Check at $70,000
States Moving Toward No Income Tax: 2026 Rate Cuts
A significant wave of state income tax cuts has been underway since 2021. Nine states cut individual income tax rates effective January 1, 2026, per the Tax Foundation. Several more are on legislated paths toward eventual elimination. This is the largest sustained period of state income tax reduction since the 1990s.
| State | 2025 rate | 2026 rate | Direction | Target |
|---|---|---|---|---|
| Mississippi | 4.4% | 4.0% flat | Phasing toward zero | 3% by 2030; 0% possible by 2040 |
| Kentucky | 4.0% | 3.5% flat | Cutting annually | Revenue-triggered reductions continue |
| Georgia | 5.19% | 5.09% flat | Cutting 0.10%/yr | Target 4.99%; some advocate full elimination |
| North Carolina | 4.5% | 4.25% | Phasing down | Target 3.99% |
| Nebraska | 5.2% | 4.55% | Significant cut | Further reductions planned |
| Ohio | 3.125% | 2.75% flat | Transitioned to flat tax | Continuing reductions |
| Indiana | 3.0% | 2.95% flat | Cutting annually | 2.9% in 2027 |
| Montana | 5.9% | 5.65% | Cutting top rate | 5.4% in 2027 |
| Oklahoma | 4.75% | Reduced | Consolidating brackets | Three brackets replacing six |
Iowa is the most dramatic recent example: it went from a 8.98% top rate in 2021 to a flat 3.8% rate in 2025, a reduction of more than 57% in four years. Mississippi is the most aggressive current mover: with legislation signed in March 2026 targeting 3% by 2030 and elimination contingent on economic benchmarks. If Mississippi reaches zero, it would become the 10th no-income-tax state. States moving toward no income tax often represent future relocation opportunities: watching the rate trajectory matters as much as the current rate.
Best No Income Tax States for Retirees and Remote Workers
| State | Social Security taxed? | Pension income taxed? | 401k/IRA withdrawals taxed? | Overall retirement verdict |
|---|---|---|---|---|
| Florida | No state tax | No state tax | No state tax | ✅ Top choice: warm climate, low property tax, homestead protection |
| Tennessee | No state tax | No state tax | No state tax | ✅ Excellent: very low cost of living, no income tax on any income |
| Wyoming | No state tax | No state tax | No state tax | ✅ Very low total burden: cold climate, small population |
| Nevada | No state tax | No state tax | No state tax | Good: low property tax (0.55%), warm climate, but high sales tax |
| South Dakota | No state tax | No state tax | No state tax | Good: low overall burden, very low cost of living |
| Texas | No state tax | No state tax | No state tax | Good for renters; high property tax hurts homeowners on fixed income |
| Alaska | No state tax | No state tax | No state tax | Niche: Permanent Fund Dividend income, but remoteness limits appeal |
| State | Cost of living | Internet infrastructure | Remote worker verdict |
|---|---|---|---|
| Tennessee | ~10 to 15% below national avg | Good in cities | ✅ Best combo: no income tax + low cost of living + growing tech scene (Nashville) |
| Texas (Austin) | Near national average (rising) | Excellent | ✅ Strong tech hub, no income tax: but housing costs rising fast |
| Wyoming | ~5% below national avg | Variable rural coverage | Good: very low total tax, quiet lifestyle |
| Florida (Tampa/Orlando) | Near national average | Good | Good: no income tax + growing tech market, Miami expensive |
| Nevada (Las Vegas) | Near national average | Good | Decent: no income tax, but high cost in Las Vegas |
| South Dakota | ~5 to 8% below national avg | Adequate in cities | Good for fully remote workers who value low cost + low taxes |
Washington State: The No Income Tax Exception for Investors
Washington no income tax status is the most nuanced of the nine no-income-tax states. While it levies no tax on wages, salaries, or ordinary income, the state enacted a 7% capital gains tax on long-term gains above $262,000 (indexed for inflation) in 2021. The Washington Supreme Court upheld it in 2023. This makes Washington significantly less attractive than other no-tax states for investors, business founders, and executives with large stock compensation.
| Income type | Washington state tax | Notes |
|---|---|---|
| Wages and salary | 0% | No state income tax on ordinary earned income |
| Self-employment income | 0% | No state income tax on business/freelance income |
| Long-term capital gains under $262,000 | 0% | Threshold is indexed to inflation annually |
| Long-term capital gains above $262,000 | 7% | Applies to stocks, bonds, business sale proceeds: not real estate |
| Primary home sale gains | 0% | Explicitly exempt from capital gains tax |
| Retirement account distributions | 0% | Exempt: 401k, IRA, pension distributions not taxed |
| Investment dividends and interest | 0% | Not subject to the capital gains tax |
For W-2 employees at Amazon, Microsoft, Boeing, and other Washington employers: the capital gains tax has minimal impact unless they are selling large amounts of company stock. For founders selling a business, investors with concentrated stock positions, or executives with large restricted stock unit (RSU) vesting events, Washington's 7% state capital gains tax on gains above $262,000 is a meaningful consideration. Nevada no income tax, Wyoming no income tax, and Florida no income tax: all three have zero capital gains tax at the state level with no threshold: making them preferable for investors and founders over Washington.
State Income Tax Rates: All 50 States Reference 2026
For context on how no-income-tax states compare to the rest of the country, here are the top marginal state income tax rates across all 50 states and DC for 2026.
| State | Top marginal rate 2026 | Notes |
|---|---|---|
| California | 13.3% | Highest in the US; 14.4% effective incl. payroll surcharge |
| Hawaii | 11.0% | Second highest |
| New Jersey | 10.75% | Third highest |
| Oregon | 9.9% | |
| Minnesota | 9.85% | |
| New York | 10.9% | NYC adds up to 3.876% local |
| Vermont | 8.75% | |
| Iowa | 3.8% flat | Was 8.98% in 2021: sharp reduction |
| Colorado | 4.4% flat | |
| Georgia | 5.09% flat | Reducing 0.10%/yr toward 4.99% |
| Kentucky | 3.5% flat | Was 4% in 2025 |
| Mississippi | 4.0% flat | Was 4.4% in 2025; targeting 0% by 2040 |
| Arizona | 2.5% flat | Completed flat tax in 2023 |
| Indiana | 2.95% flat | Was 3.0% in 2025 |
| Ohio | 2.75% flat | Transitioned to flat rate in 2026 |
| North Dakota | 2.5% flat | |
| AK, FL, NV, NH, SD, TN, TX, WA, WY | 0% | No state income tax (WA: 7% capital gains above $262K) |
Common Mistakes When Evaluating No Income Tax States
Equating no income tax with no taxes
Tennessee has no income tax but has the highest combined sales tax in the US at 9.55%. Texas has no income tax but property taxes 86% higher than Florida. Wyoming has no income tax and genuinely low total taxes. The states are not interchangeable: check total tax burden, not just income tax.
Ignoring domicile establishment requirements
Simply moving to Florida does not end California or New York state tax obligations. High-income earners moving from California must prove domicile change to the Franchise Tax Board: physical presence, driver's license, voter registration, and severing California ties. New York aggressively audits high-earning departures and applies the "convenience of the employer" rule to remote workers.
Treating Washington as equivalent to Texas or Florida for investors
Washington has no income tax on wages: but the 7% capital gains tax on gains above $262,000 is a meaningful state tax for anyone with significant investment activity. A founder selling a $2 million business in Washington owes $120,540 in state capital gains tax. The same sale in Nevada, Wyoming, or Florida costs zero state tax.
Underestimating cost of living differences
A $90,000 salary in San Francisco and a $70,000 salary in Nashville may have similar purchasing power after taxes and cost of living adjustments. The tax saving from moving to Tennessee must be compared against actual cost of living differences: housing, healthcare, transportation: not just the gross tax rate. Use total compensation and local costs, not just state tax rates, when evaluating a relocation.
States with No Income Tax: FAQ
Which states have no income tax in 2026?
Nine states have no state income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire eliminated its Interest and Dividends tax on January 1, 2025: now a true zero income tax state. Washington is an asterisk: it levies no income tax on wages but has a 7% capital gains tax on long-term gains above $262,000. All nine states still collect federal income tax: only state income tax is zero. Use the take-home pay calculator to see your exact net pay in any state.
What are the no income tax states list for 2026?
The complete no income tax states list 2026: also called the no state income tax states list: Alaska (AK), Florida (FL), Nevada (NV), New Hampshire (NH), South Dakota (SD), Tennessee (TN), Texas (TX), Washington (WA), Wyoming (WY). These nine states impose zero broad-based personal income tax on wages, salaries, and most forms of personal income. This list has not changed from 2025: no new states achieved zero income tax status in 2026, though Mississippi, Kentucky, and Georgia are all reducing rates with multi-year elimination targets.
New Hampshire income tax 2026: Does New Hampshire have no income tax?
Yes: as of January 1, 2025. New Hampshire eliminated its Interest and Dividends (I&D) Tax, which was the last remaining form of state income tax. New Hampshire now has zero income tax on wages, salaries, investment income, dividends, and interest. New Hampshire also has no sales tax. The trade-off is one of the highest property tax rates in the country among no-income-tax states: approximately 1.89% to 2.18% effective rate. New Hampshire is best suited for renters and workers near the Boston commuter belt who do not own high-value real estate.
Tennessee income tax 2026: Does Tennessee have no income tax?
Yes. Tennessee has had no income tax on wages since the Hall Income Tax was fully repealed on January 1, 2021. Tennessee now levies zero state income tax on any form of personal income: wages, investment income, dividends, or retirement distributions. The trade-off: Tennessee has the highest combined state and local sales tax rate in the US at approximately 9.55%. However, Tennessee's cost of living is 10 to 15% below the national average, making it one of the most financially attractive no-income-tax states for middle-income workers and retirees.
Is Texas or Florida better for no income tax?
Both have zero state income tax and zero capital gains tax. The key difference is property taxes: Texas has an effective rate of ~1.60% vs Florida's ~0.86%: a $350,000 home costs approximately $2,590 more per year in Texas property taxes. Florida also has a $50,000 homestead exemption for primary residences. For homeowners, Florida wins on total tax burden. For renters and high-income earners, both are essentially equivalent. Florida is generally the top choice for retirees due to lower property tax, no estate tax, homestead protections, and warm climate.
What is the best state for taxes overall?
For lowest total tax burden: Wyoming and Alaska consistently rank 1st and 2nd per Tax Foundation analysis. Both have no income tax, low sales tax, and modest property taxes. Wyoming has a 5.36% average sales tax and no capital gains tax: excellent for high net worth individuals. For retirees specifically: Florida and Tennessee are top choices. For remote workers valuing cost of living: Tennessee. For investors and founders: Wyoming, Nevada, or Florida (no capital gains tax, no income tax). The "best" state depends on your income level, whether you own property, and your spending patterns.
Which states are eliminating income tax? States eliminating income tax 2026
The most aggressive mover is Mississippi: reduced from 4.4% to 4% on January 1, 2026, with legislation signed March 2026 targeting 3% by 2030 and potential elimination by 2040 if economic conditions are met. Georgia is reducing its flat rate by 0.10% per year toward 4.99%, with legislators advocating full elimination. Iowa went from 8.98% (2021) to 3.8% flat (2025): one of the sharpest state income tax reductions in US history. Nine states total cut rates on January 1, 2026: Georgia, Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Ohio, and Oklahoma.
How much can you save by moving to a no income tax state?
Savings depend on your income and origin state. Moving from California (9.3% effective rate at $70K) to Texas: ~$4,674/year. From New York to Florida: ~$4,124/year. From New Jersey to Wyoming: ~$3,850/year. At $200,000 income, California to Florida saves approximately $18,000 to $20,000 per year in state income tax. However, you must subtract additional property taxes, higher sales taxes, and any cost of living differences to get the true net saving relative to gross income earned. For many middle-income households the net saving after all trade-offs is $1,500 to $4,000 per year. For high earners above $200K the saving is typically $10,000 to $30,000+ per year net of trade-offs.
Do remote workers pay income tax in their home state or employer state?
Generally, remote workers pay income tax in the state where they physically perform the work: their home state. If you live and work remotely from Texas, you owe Texas income tax (zero). Exception: New York, Connecticut, and Delaware use the "convenience of the employer" rule, which may require remote workers employed by companies in those states to pay that state's income tax unless the remote work is required (not merely permitted) by the employer. This is contested in courts and relatively uncommon. For most remote workers, moving to a no-income-tax state while working remotely effectively eliminates state income tax: but confirm with a tax professional for New York employer situations.