The 9 States With No Income Tax

Start with the part that surprises people: there is no "best" no-tax state for your paycheck. All nine produce exactly the same take-home, because once state income tax is zero, only federal tax and FICA remain — and those are the same everywhere in the country.

So the comparison that matters is not Texas versus Florida. It is any of the nine versus wherever you live now — and then, separately, what the state recovers through other channels.

No state raises no revenue

Every state has to fund roads, schools and courts. A state that declines to tax income has to collect elsewhere, and there are essentially four substitutions:

• - Property tax — Texas and New Hampshire lean heavily here
• - Sales tax — Tennessee, Nevada, Washington, South Dakota
• - Extraction — Wyoming and Alaska tax minerals and oil
• - Sector-specific — Nevada's gaming taxes, Washington's business-and-occupation tax, South Dakota's financial sector

Which substitution a state chooses determines who actually bears the cost. That is the real difference between them.

The nine, one at a time

Texas has never taxed income, and in 2019 voters wrote the ban into the state constitution, so reversing it would now require another amendment. The trade-off arrives as property tax, where Texas rates run among the highest in the country. If you rent, you keep close to the full benefit. If you buy, a meaningful share comes back.

Florida banned income tax in its constitution in 1924. Sales tax and tourism receipts carry much of the load, which means visitors subsidize a real portion of state services — a structural advantage most states don't have.

Nevada funds itself through gaming revenue and a high sales tax. Its constitution bars an income tax. The Nevada–California border is one of the most travelled tax-driven relocation routes in the country, for reasons the numbers above make obvious.

Washington levies no wage tax, but your paycheck is not untouched: the WA Cares long-term-care premium takes 0.58% of wages — about $435 a year on $75,000 — and the Paid Family & Medical Leave premium applies too. Neither is an income tax, and neither appears in the take-home figures on this site. A 7% excise tax also applies to large long-term capital gains, though not to salary.

Tennessee never taxed wages, and its Hall tax on interest and dividends was fully repealed in 2021. The state now taxes no personal income of any kind — and has among the highest combined sales tax rates in the country. It collects at the register what it declines to collect from paychecks.

New Hampshire is the unusual one: no wage tax and no general sales tax. Its tax on interest and dividends finished phasing out at the end of 2024. Nearly everything is funded through local property tax, which is correspondingly high. If you commute to Massachusetts, note that Massachusetts taxes income earned within its borders.

South Dakota taxes no personal income at all — not wages, retirement distributions, Social Security, or capital gains. Sales and use taxes fund most of the budget, supported by a bank-friendly regulatory regime that draws financial-sector activity.

Wyoming funds itself substantially through severance taxes on coal, oil, gas and minerals, which lets it maintain both no income tax and comparatively low sales taxes. By total state and local burden on wage earners it ranks at or near the bottom nationally.

Alaska is the only state to have had an income tax and repealed it — in 1980, once oil royalties filled the treasury. Residents typically receive money back through the annual Permanent Fund Dividend, which is not taxed by Alaska but is federally taxable. Note that Alaska is one of the few states where employees contribute to unemployment insurance directly through payroll.

What the move is actually worth

The paycheck gap is real and it compounds. At $75,000, moving from Illinois to any no-tax state is $3,568 a year — roughly $35,000 over a decade before any raises.

What erodes it:

• - Property tax, if you buy. In Texas and New Hampshire this can absorb a large share of the gain.
• - Sales tax, continuously and invisibly, in Tennessee, Nevada and Washington.
• - Cost of living, which is not a tax but spends the same. Seattle and Miami are not cheap.
• - State-specific payroll items like WA Cares.

The honest summary: for renters and higher earners, the benefit largely survives. For homeowners in high-property-tax states, a substantial portion comes back through the tax bill.

If you work remotely

Generally you owe income tax where you live, not where your employer is incorporated — so a resident of a no-tax state working remotely for a company elsewhere typically owes no state income tax at all.

The complication is that a handful of states apply "convenience of the employer" rules, taxing remote workers who report to an in-state employer. New York is the most prominent. If your employer is in such a state, confirm your situation with a tax professional before assuming the saving.

See it on your own salary

Every state page on this site shows exact 2026 figures: Texas, Florida, Nevada, Washington, Tennessee, South Dakota, Wyoming, Alaska and New Hampshire. Or compare all fifty on the states overview.

Figures are for a single filer taking the standard deduction, tax year 2026, and cover federal income tax, FICA and state income tax only. Local taxes, state payroll premiums such as WA Cares, and benefit deductions are not modelled — where they matter, the relevant state page says so. Federal figures from IRS Revenue Procedure 2025-32; FICA from the Social Security Administration; state rates from each state's revenue department. Full citations on our sources page.