States With No Income Tax in 2026: How Much Do You Actually Save?
Nine states have no personal income tax. We break down which ones they are, how much you'd actually save at different salary levels, and whether the tradeoffs are worth it.
Moving to a no-income-tax state is one of the most frequently cited reasons people relocate — and for good reason. At a $120,000 salary, eliminating a 9% state income tax bill puts roughly $10,000 back in your pocket every year. Over a decade, that’s $100,000, compounding if invested.
But the decision isn’t as simple as “move and save.” Some no-tax states make up the difference through higher property taxes, sales taxes, or a cost of living that erodes the advantage. Here’s the full picture.
The 9 States With No Personal Income Tax
As of 2026, nine states levy no personal income tax on wages:
- Alaska
- Florida
- Nevada
- New Hampshire (taxes investment income at 3% — phasing out)
- South Dakota
- Tennessee (no tax on wages; investment income tax fully eliminated in 2021)
- Texas
- Washington (no income tax, but has a 7% capital gains tax on gains over $262,000)
- Wyoming
Each state has taken a different path to this position, and each has different tradeoffs.
How Much Do You Actually Save?
The savings depend entirely on your income level and which state you’re leaving. Here’s a look at what you’d save moving from a high-tax state:
Leaving California (up to 13.3% marginal rate)
| Salary | CA State Tax (est.) | Savings Moving to TX/FL/WA |
|---|---|---|
| $75,000 | ~$4,700 | ~$4,700/year |
| $120,000 | ~$9,200 | ~$9,200/year |
| $200,000 | ~$18,000 | ~$18,000/year |
| $400,000 | ~$47,000 | ~$47,000/year |
Leaving New York (up to 10.9% + NYC tax up to 3.876%)
| Salary | NY State + NYC Tax (est.) | Savings Moving to TX/FL/WA |
|---|---|---|
| $75,000 | ~$7,800 | ~$7,800/year |
| $120,000 | ~$14,200 | ~$14,200/year |
| $200,000 | ~$26,500 | ~$26,500/year |
These are meaningful numbers. Use our tax calculator to see your specific savings for your salary and state.
State-by-State Breakdown
Texas — No State Income Tax
Texas is the largest and most prominent no-income-tax state, and it has absorbed an enormous wave of migration from California in recent years. Austin, Dallas-Fort Worth, and Houston are all large, diverse economies capable of absorbing highly-skilled remote and in-person workers.
The tradeoff: Texas has some of the highest property tax rates in the country — effective rates often run 1.6–2.2% of home value. On a $400,000 home, that’s $6,400–$8,800 per year in property taxes. If you rent, this is less relevant. Texas also has an 8.25% sales tax (6.25% state + up to 2% local).
Best cities: Austin, Dallas, Houston, San Antonio. Compare Dallas to your city or explore Austin’s cost of living.
Florida — No State Income Tax
Florida has become one of the most popular destinations for high-earning migrants from the Northeast and California. Miami, Tampa, Jacksonville, and Orlando offer very different lifestyles at varying price points. No state income tax, no estate tax, and a business-friendly regulatory environment make it a magnet for entrepreneurs, financial professionals, and retirees alike.
The tradeoff: Florida’s property insurance market has become genuinely difficult — hurricane exposure has led multiple insurers to exit the state, and premiums have spiked dramatically. Depending on location and home value, homeowners may pay $4,000–$10,000/year in insurance alone. Renters are somewhat insulated from this but should factor it in when buying. Climate risk is also a long-term consideration.
Best cities: Miami (expensive, international), Tampa (more affordable, growing fast), Jacksonville (most affordable). Compare Miami to your city or explore Tampa.
Washington — No State Income Tax (with caveats)
Washington State offers Seattle, a major tech hub, paired with no state income tax. For software engineers, this is a particularly valuable combination — someone earning $200,000 in software at Amazon, Microsoft, or Google keeps roughly $18,000 more per year than their California counterpart in a comparable role.
The tradeoff: Washington passed a 7% capital gains tax in 2021 (upheld by the state supreme court in 2023) on long-term capital gains exceeding $262,000 annually. For most wage earners this doesn’t apply, but for those with significant investment income or equity compensation, it matters. Washington also has a 10.1% state sales tax — the highest combined rate of any no-income-tax state.
Best cities: Seattle (tech hub, expensive), Spokane (much more affordable). Compare Seattle to other cities.
Nevada — No State Income Tax
Nevada’s largest city, Las Vegas, has transformed from a tourism-only economy to a genuinely diversified metro with a growing tech sector, healthcare jobs, and light manufacturing. Reno, Nevada’s second city, has become a tech and logistics hub driven by proximity to Silicon Valley — close enough to commute occasionally, far enough to escape California prices and taxes.
The tradeoff: Nevada’s economy remains heavily tied to tourism and services, which makes it more cyclically volatile. Public services and schools are frequently rated poorly — Nevada consistently ranks near the bottom on K-12 education metrics.
Best cities: Las Vegas, Reno. Compare Las Vegas to other cities.
New Hampshire — No State Income Tax
New Hampshire occupies a unique position in the no-tax landscape: it is the only state with neither an income tax nor a sales tax — a combination that no other state offers. The investment income tax that previously existed (the “Interest and Dividends Tax”) has been fully phased out as of 2025, making New Hampshire a clean no-income-tax state on all fronts.
The tradeoff: Property taxes are the price of admission. New Hampshire has one of the highest effective property tax rates in the country — averaging around 1.9–2.1% of assessed home value — which translates to $7,600–$8,400 per year on a $400,000 home. For renters, this is baked into rental pricing but less directly visible. There is also no state lottery-funded general fund to speak of, meaning public services are funded primarily through property taxes and fees, and residents sometimes note the difference in infrastructure spending relative to higher-tax states.
Best cities: Concord (state capital, affordable, functional), Manchester (the largest city, more affordable than neighboring Massachusetts), and the seacoast towns (Portsmouth, Hampton) which have become popular with remote workers and commuters willing to cross the border for Boston-area salaries while living in a no-tax state. The Boston-to-NH commute has historically been common — Massachusetts income is still taxed by MA for remote workers physically working in NH, but the dynamic has shifted post-COVID as remote work reduced the number of days spent commuting.
Tennessee — No State Income Tax on Wages
Tennessee eliminated its tax on investment income (the “Hall Income Tax”) in 2021, making it a fully no-income-tax state. Nashville has grown explosively, but the state still offers significant value relative to coastal markets. Chattanooga, Knoxville, and Memphis remain genuinely affordable.
The tradeoff: Tennessee’s sales tax is among the highest in the country at 7% state + up to 2.75% local, meaning everyday purchases carry more tax than in many income-tax states. The effective tax burden is more even than the headline “no income tax” suggests.
Best cities: Nashville (expensive and growing), Chattanooga (affordable, walkable, excellent internet infrastructure), Knoxville (college town, outdoor access). Compare Nashville to your city.
South Dakota & Wyoming — No State Income Tax
South Dakota and Wyoming are among the lowest-tax environments in the country by nearly any measure. For those in wealth management, agriculture, or remote work with no geographic constraints, these states offer tax advantages that go beyond just income: neither has estate taxes, neither has gift taxes, and both have favorable trust laws.
The tradeoff: Limited urban economies. Sioux Falls (SD) and Cheyenne (WY) are the largest cities — functional and affordable, but not major metro areas. These states work best for those with truly location-independent incomes.
Alaska — No State Income Tax (+ Dividend)
Alaska not only has no state income tax — it pays residents annually through the Permanent Fund Dividend (PFD), which has ranged from $1,000 to $2,000+ per year per resident. There’s also no state sales tax, though local municipalities levy their own.
The tradeoff: The cost of living in Alaska, particularly for food and goods, is significantly higher than the Lower 48 due to shipping costs and remoteness. Anchorage is the most livable city, but “livable” is relative — winters are long and dark. For the right person with the right remote income, Alaska is genuinely unique.
The Real Calculation: Tax Savings vs. Total Cost
A state with no income tax can still cost more overall if property taxes, insurance, sales taxes, or a higher cost of living erode the advantage. Here’s a simplified comparison for someone earning $120,000 relocating from California:
| Destination | Income Tax Saved | Higher Property Tax (est.) | Higher Sales Tax | Net Annual Advantage |
|---|---|---|---|---|
| Texas | +$9,200 | -$2,000 (if renting, ~$0) | -$800 | ~$6,400–$8,400 |
| Florida | +$9,200 | -$1,200 | -$400 | ~$7,600 |
| Washington | +$9,200 | -$800 | -$1,200 | ~$7,200 |
| Tennessee | +$9,200 | -$600 | -$1,400 | ~$7,200 |
Even accounting for these offsets, the advantage of moving from a high-tax state is typically $6,000–$10,000 per year at a $120,000 salary — and the advantage scales up significantly with income.
Should You Move for the Tax Savings?
The math is compelling, but tax optimization shouldn’t be the only reason to move. Weigh:
- Job market: Is there local employment in your field, or are you fully remote?
- Housing costs: A no-tax state with expensive housing can easily erase the tax savings.
- Quality of life: Schools, infrastructure, healthcare, and climate vary widely.
- Climate risk: Florida’s hurricane exposure and Texas’s grid vulnerabilities are real factors.
The best move is one where the tax savings stack on top of a city you’d want to live in anyway. Explore cost of living comparisons across any two U.S. metro areas to see how the full picture adds up for your situation.
Which No-Tax State Is Right for Your Situation?
The nine no-income-tax states are not interchangeable. The right one depends entirely on your career, lifestyle, and priorities:
If you work in tech and want the highest salary combined with no state income tax, Washington (Seattle) is the answer. Amazon, Microsoft, Google, and Meta have major presences there, and the salary premium for tech roles in Seattle is real. The absence of income tax amplifies the financial advantage over equivalent Bay Area compensation.
If you want year-round warmth and no income tax, the choice narrows to Florida or Texas. Florida wins on climate and lifestyle (beaches, no state estate tax, growing finance sector). Texas wins on sheer economic scale — Dallas, Houston, Austin, and San Antonio are all major metros with diversified job markets and significantly lower housing costs than Florida’s coastal cities.
If you want the lowest total tax burden — not just income tax, but also property taxes, sales taxes, and estate taxes — Wyoming is the answer. Low property taxes, no estate tax, no gift tax, and favorable trust laws make Wyoming the destination for wealth management professionals and high-net-worth individuals seeking to establish domicile.
If you’re a retiree, Florida and Tennessee are particularly attractive. Neither taxes Social Security income or pension income, Florida has no estate tax, and the cost of living outside of Miami and Naples is very reasonable. Tennessee’s sales tax is high, but its property taxes are moderate and the overall tax burden on retirement income is among the lowest in the country.
If you want no income tax with coastal access, the options are Washington (Pacific Northwest) or Alaska — both offering dramatic natural environments but with very different tradeoffs in climate, urbanization, and cost of goods.
The Long-Term Wealth Impact
The annual savings from eliminating state income tax are significant. The compounded, long-term wealth impact is transformational.
Consider someone earning $120,000 per year who moves from California to Texas, saving approximately $8,400 per year in state income taxes. If those savings are invested annually at a 7% average annual return:
- After 10 years: ~$116,000 in additional wealth
- After 20 years: ~$370,000 in additional wealth
- After 30 years: ~$850,000 in additional wealth
At a higher income — say $200,000 — the California-to-Texas savings jump to roughly $18,000 per year. At 7% annual return over 30 years, that’s nearly $1.8 million in additional wealth that a California resident never accumulates simply because of state income tax.
This is why high-income earners, particularly in tech, finance, and real estate, treat state tax domicile as a serious financial planning decision rather than just a lifestyle preference. The numbers compound in a way that dwarfs the friction of relocating.
Common Misconceptions About No-Tax States
“They must have worse public services.” Not necessarily. Washington and Florida both rank well on infrastructure quality. Washington funds its government largely through its high sales tax (10.1% combined) and business taxes. Florida uses property taxes and tourism revenue. The relationship between state income tax and public service quality is weaker than many assume — state spending per capita varies widely and is driven by political priorities as much as tax structure.
“You still end up paying the same in taxes somehow.” There is usually some offset — higher property taxes in New Hampshire and Texas, higher sales taxes in Washington and Tennessee, higher insurance in Florida — but the net benefit of eliminating income tax is typically still positive, particularly for wage earners. The table in this article quantifies that offset at $120,000 income: the advantage is typically $6,000–$10,000 per year even after accounting for tradeoffs.
“It only matters if you’re wealthy.” This is one of the most persistent misconceptions. At a $75,000 salary, moving from New York to Texas saves roughly $5,000–$6,000 per year in combined state and city income tax. That’s a 15% improvement in take-home pay — meaningful for any household, not just high earners.
“Remote workers can just claim any no-tax state as their home.” State residency rules are real and enforced, particularly for high earners. To establish domicile in a new state, you generally need to: physically be present in that state for the majority of the year, change your driver’s license and vehicle registration, register to vote there, update your bank accounts and professional registrations, and demonstrate intent to remain. High-income individuals who claim residency in Florida while spending most of their time in New York have been audited and assessed back taxes by New York’s Department of Taxation, which is aggressive about pursuing this. The move must be genuine to withstand scrutiny.
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