Move to a no-income-tax state and keep more of your paycheck. Here is everything you need to know about all nine.
Nine U.S. states impose no tax on earned income such as wages, salaries, and self-employment earnings. For high earners, this can mean saving tens of thousands of dollars annually compared to living in a high-tax state like California (13.3% top rate) or New York (10.9% top rate). However, no-income-tax states often compensate with higher sales taxes, property taxes, or other fees.
Understanding the full tax picture is critical before making a move. A state with no income tax but a 10% sales tax and high property taxes may not save you money compared to a state with moderate income tax but lower costs elsewhere. The profiles below break down each state's complete tax environment.
| State | Income Tax | Sales Tax | Property Tax (Median) | Key Trade-off |
|---|---|---|---|---|
| Alaska | None | None (local up to 7.5%) | Low | Remote location, high cost of goods |
| Florida | None | 6% + local | Moderate | Hurricane risk, high insurance |
| Nevada | None | 6.85% + local | Low-moderate | High sales tax in metro areas |
| New Hampshire | None | None | Very High | Highest property taxes in US |
| South Dakota | None | 4.2% + local | Low | Limited urban amenities |
| Tennessee | None | 7% + local | Low | Highest combined sales tax rates |
| Texas | None | 6.25% + local | High | High property taxes offset savings |
| Washington | None* | 6.5% + local | Moderate | 7% capital gains tax above $270K |
| Wyoming | None | 4% | Very Low | Small population, limited services |
*Washington taxes long-term capital gains above $270,000 at 7%.
Florida is the most popular destination for people relocating to avoid state income tax. Its combination of warm weather, no income tax (constitutionally prohibited), and robust job market make it the top choice for retirees and remote workers alike. The state relies on a 6% sales tax plus local additions and tourism-related taxes.
The trade-offs include hurricane risk, rising property insurance costs, and relatively high cost of living in desirable metro areas like Miami and Tampa. However, for someone earning $150,000 who moves from California, the income tax savings alone amount to roughly $13,000 per year. Use the Florida tax calculator to see your specific savings.
Texas combines no income tax with a massive economy and diverse job market. Austin, Dallas, Houston, and San Antonio all offer thriving tech, energy, and healthcare sectors. The constitutional prohibition on income tax provides long-term certainty that the tax environment will not change.
However, Texas has among the highest property tax rates in the nation, averaging 1.6% to 1.8% of assessed value. A $400,000 home can easily generate $7,000+ in annual property taxes. For homeowners, this partially offsets the income tax savings. Renters and high earners tend to benefit most. See the Texas tax calculator for your breakdown.
Washington State is home to Amazon, Microsoft, and a booming tech sector, all without a state income tax. However, in 2022, Washington enacted a 7% tax on long-term capital gains exceeding $270,000, upheld by the state Supreme Court. This primarily affects high-net-worth individuals selling stocks or businesses.
Washington also has high sales tax rates (6.5% state + local additions exceeding 10% in Seattle) and a Business & Occupation tax on gross receipts. For W-2 employees, Washington remains excellent. For entrepreneurs and investors, the capital gains tax adds a new consideration. Calculate your Washington taxes here.
New Hampshire is unique among no-income-tax states because it also has no general sales tax. The state fully phased out its Interest and Dividends Tax in January 2025, making it completely free of income tax for the first time. This double benefit makes New Hampshire attractive on paper.
The major catch is property taxes. New Hampshire has some of the highest property tax rates in the country, often exceeding 2% of assessed value. The state funds education and local government almost entirely through property taxes, which can add $8,000 to $15,000 annually for a typical home.
Wyoming and South Dakota stand out for business-friendly environments beyond just income tax. Both states have strong privacy protections for LLC owners, low overall tax burdens, and simple regulatory frameworks. Wyoming is particularly popular for single-member LLCs due to its charging order protection and low annual fees ($60 annual report).
South Dakota has become a major hub for trust formation, attracting billions in trust assets due to its favorable trust laws and perpetuity provisions. Neither state has income tax, corporate tax, or estate/inheritance tax, making them ideal for wealth preservation strategies.
Use our state tax calculators to compare your take-home pay across different states. At $100,000 income (single filer), here is a rough comparison of annual state income tax owed:
| State | State Tax on $100K | Annual Savings vs. California |
|---|---|---|
| California | ~$5,200 | $0 (baseline) |
| New York | ~$4,700 | ~$500 |
| Oregon | ~$5,370 | -$170 (higher) |
| Any no-tax state | $0 | ~$5,200 |
These figures are estimates for single filers taking the standard deduction. Use the individual state calculators for precise numbers based on your income and filing status.