States With No Income Tax: What You Really Save
By the FiscalData.US editorial team · Updated October 2026 · 8 min read · Sources & methodology
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming do not tax wage income. For a worker earning $80,000, moving from a state with a 5% effective income tax to one of them can add roughly $4,000 a year to take-home pay. But states still need revenue, and they collect it in other ways. Whether you actually come out ahead depends on how you live.
The Nine States at a Glance
| State | Worth knowing |
|---|---|
| Alaska | No state sales tax, but local sales taxes exist; residents may receive the Permanent Fund Dividend |
| Florida | Relies heavily on sales and tourism taxes; property insurance costs are high |
| Nevada | Funded largely by gaming and sales taxes |
| New Hampshire | Has phased out its tax on interest and dividends; no general sales tax; high property taxes |
| South Dakota | Sales tax applies broadly, including many services |
| Tennessee | Among the highest combined state and local sales tax rates |
| Texas | No wage tax, but property taxes are among the highest in the nation |
| Washington | No wage tax but a tax on certain long-term capital gains; high sales taxes |
| Wyoming | Low overall tax burden, supported by mineral revenues |
Where the Money Comes From Instead
Sales taxes: renters and big spenders feel these most. Combined state and local rates in some no-income-tax states approach 10%. Property taxes: homeowners in Texas or New Hampshire can pay several thousand dollars a year more than in neighboring states. Excise taxes and fees: fuel, vehicle registration, utilities and hospitality. A household that rents and spends modestly often saves the most; a household that owns an expensive home may save far less than the headline suggests.
Federal Taxes Do Not Change
Federal income tax, Social Security and Medicare are identical in every state. Moving to Texas removes the state line on your pay stub, nothing else. One side effect: residents of no-income-tax states can deduct state sales tax instead of income tax if they itemize, though this rarely tips the decision. See our standard vs. itemized guide.
How to Compare Two States Fairly
- Run your salary through the state pages to see the income-tax difference in dollars.
- Estimate annual sales tax: taxable spending times the combined local rate.
- Compare property tax (or rent, which reflects it) on a similar home.
- Add insurance, utilities and vehicle costs, which vary widely.
- Remember remote-work rules: you generally owe tax where you live and work, but a few states tax nonresidents working remotely for an in-state employer.
Start with the salary calculator by state, or jump to Texas, Florida or Washington.
Moving Mid-Year
If you leave a taxing state during the year, you typically file a part-year resident return there for the income earned while you lived there. Keep records of your move date (lease, utility transfers, driver's license) and update your address with payroll so state withholding stops on time.
Frequently Asked Questions
Do I still need to file a state return in a no-income-tax state?
Generally no for wage income, though Washington residents with large long-term capital gains may need to file.
Is a no-income-tax state always cheaper?
No. Your housing, spending and insurance costs can outweigh the income-tax saving.
Do retirees benefit too?
Yes — pensions, IRA withdrawals and Social Security escape state income tax in these states.
Sources & legal references
Figures in this guide were checked by the FiscalData.US editorial team against these primary sources and, where relevant, state revenue department notices. See our methodology & update policy.
- Federation of Tax Administrators — state revenue department notices and withholding tables
- IRS Rev. Proc. 2025-32 — 2026 inflation adjustments (brackets, standard deduction, credits)
- IRS Rev. Proc. 2024-40 — 2025 inflation adjustments (prior-year comparison)
- Public Law 119-21 (One Big Beautiful Bill Act, July 2025)
Related calculators
FiscalData.us provides estimates for informational purposes only and is not financial or tax advice. The information in this guide is general in nature, does not consider your personal circumstances and does not create a client relationship. FiscalData.US is not responsible for decisions made based on this content.