9 States With No Income Tax in 2026

Nine U.S. states don't tax wages or salary income, allowing workers to keep more of their paycheck. If you're considering a move or evaluating job offers in different states, understanding which states have no income tax can significantly impact your take-home pay.

The 9 States With No Income Tax

How Much Can You Save?

The savings from living in a no-income-tax state depend on your income and what state you're comparing against. Here's how annual state income tax compares for a $75,000 salary:

State-by-State Breakdown

Alaska

Alaska is the only state that not only has no income tax but actually pays residents to live there. The Permanent Fund Dividend distributes oil revenue to every resident—typically $1,000 to $2,000 per year.

Pros:

• No state income tax
• No state sales tax
• Annual dividend payment to residents
• Stunning natural beauty

Cons:

• High cost of living, especially for goods
• Extreme weather and limited daylight in winter
• Remote location with expensive travel
• Some local areas have sales taxes

Florida

Florida is one of the most popular destinations for people fleeing high-tax states. Its combination of no income tax, warm weather, and no estate tax makes it especially attractive to retirees and high earners.

Pros:

• No state income tax
• No estate or inheritance tax
• Warm climate year-round
• Growing job market in tech, finance, and healthcare

Cons:

• Higher property taxes than some states
• Hurricane risk and flood insurance costs
• Traffic congestion in major metros
• Rising home prices and insurance costs

Nevada

Nevada funds its government largely through gaming and tourism taxes, allowing residents to avoid income tax. Las Vegas and Reno have become hubs for tech companies and remote workers.

Pros:

• No state income tax
• No corporate income tax
• Growing tech presence (Tesla, Switch)
• Entertainment and outdoor recreation

Cons:

• High sales tax (up to 8.375% in Clark County)
• Desert climate with extreme summer heat
• Limited water resources
• Economy tied to tourism and gaming

New Hampshire

New Hampshire has never taxed wages or salary. The state eliminated its Interest and Dividends Tax in 2025, making it fully income-tax-free. It's popular with Boston-area workers who commute from southern New Hampshire.

Pros:

• No tax on any income (wages, dividends, interest)
• Proximity to Boston job market
• No sales tax
• Lower cost of living than Massachusetts

Cons:

• Among the highest property taxes in the nation
• Cold winters
• Higher home prices in southern tier
• Limited public transit

South Dakota

South Dakota offers one of the lowest overall tax burdens in the country. Combined with no income tax, the state has become a haven for trust companies and financial services.

Pros:

• No state income tax
• No corporate income tax
• No inheritance tax
• Low overall tax burden

Cons:

• Harsh winters
• Limited job market outside of Sioux Falls
• Rural character may not suit everyone
• Lower wages than coastal states

Tennessee

Tennessee eliminated its Hall Tax on investment income in 2021, making it fully income-tax-free. Nashville's growth as a tech and healthcare hub has attracted workers from across the country.

Pros:

• No state income tax
• Growing job market (Nashville, Memphis)
• Affordable cost of living
• Music, food, and cultural scene

Cons:

• Higher sales tax (up to 9.75% in some areas)
• Limited public transit
• Humid summers
• Tornadoes and severe weather risk

Texas

Texas is the largest no-income-tax state by population and has seen massive growth from California and other high-tax states. Austin, Dallas, Houston, and San Antonio all have thriving job markets.

Pros:

• No state income tax
• Large and diverse job market
• Lower cost of living than coastal metros
• Business-friendly environment

Cons:

• High property taxes (often 2%+ of home value)
• Extreme summer heat
• Limited public transit in most cities
• Property insurance costs rising

Washington

Washington has no income tax on wages, though it recently implemented a capital gains tax on investment income over $250,000. Seattle's tech industry (Amazon, Microsoft) makes it a high-income job market.

Pros:

• No state income tax on wages
• Major tech employers (Amazon, Microsoft, Google)
• Natural beauty and outdoor recreation
• No corporate income tax

Cons:

• High sales tax (up to 10.5% in Seattle)
• Capital gains tax on high earners (7%)
• Expensive housing in Seattle area
• Gray, rainy weather

Wyoming

Wyoming has the smallest population of any state but offers significant tax advantages. The state funds itself through mineral extraction taxes on coal, oil, and natural gas.

Pros:

• No state income tax
• No corporate income tax
• Low overall tax burden
• Stunning natural landscapes (Yellowstone, Grand Teton)

Cons:

• Limited job market
• Harsh winters
• Remote location
• Economy dependent on energy sector

The Trade-Offs

States without income tax typically make up the revenue through other means:

Who Benefits Most From No-Income-Tax States?

High earners benefit most in absolute terms. Someone earning $500,000 in California pays over $50,000 in state income tax. The same person in Texas or Florida pays $0.

Remote workers can live in a no-income-tax state while working for companies based elsewhere. A software engineer working remotely for a New York company while living in Florida keeps thousands more per year.

Retirees with significant retirement income (pensions, 401k withdrawals) benefit from states like Florida and Texas that don't tax any retirement income.

Renters get the full benefit of no income tax without the offsetting property tax burden that homeowners face.

Who Might Not Benefit?

Homeowners in states like Texas and New Hampshire may find that high property taxes offset the income tax savings, especially on expensive homes.

Lower-income workers may find that high sales taxes (Tennessee, Washington) consume a larger share of their income than a progressive income tax would.

People who value public services may find fewer services in low-tax states, from public transit to schools to social programs.

How to Compare Your Personal Situation

To determine if a no-income-tax state is right for you, consider:

1. Your income level — Higher earners save more in absolute terms
2. Homeowner vs. renter — Property taxes can offset income tax savings
3. Spending habits — High sales taxes affect big spenders more
4. Family situation — Schools and services vary significantly
5. Job market — Higher pay in some states may offset tax savings elsewhere
6. Cost of living — Housing, insurance, and goods prices vary widely

Key Takeaways

1. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming
2. New Hampshire eliminated its Interest and Dividends Tax in 2025, becoming fully income-tax-free
3. Savings can be $3,000-$10,000+ per year compared to high-tax states
4. Trade-offs include higher property taxes, sales taxes, or limited services
5. High earners, remote workers, and retirees benefit most
6. Consider your complete tax picture, not just income tax

Explore No-Income-Tax States