In 2026, nine US states charge no broad personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — but most make up the revenue through higher sales, property or industry-specific taxes.
"No state income tax" is one of the most powerful phrases in American relocation marketing. It can genuinely save thousands of dollars a year — but the headline hides important nuance. This 2026 guide lists every no-income-tax state, explains how they balance their budgets, and helps you decide whether moving actually pays off once the full tax picture is in view.
The nine no-income-tax states in 2026
These states do not levy a broad tax on wages and salaries for 2026:
- Alaska (AK) — no income tax and no statewide sales tax; funded heavily by oil and gas revenue.
- Florida (FL) — no income tax; relies on sales tax and tourism.
- Nevada (NV) — no income tax; gaming and sales taxes carry the load.
- New Hampshire (NH)* — no tax on wages; its old tax on interest and dividends was fully phased out after 2024.
- South Dakota (SD) — no income tax; sales and excise taxes dominate.
- Tennessee (TN) — no income tax; repealed its Hall tax on investment income in 2021.
- Texas (TX) — no income tax; notable for relatively high property taxes.
- Washington (WA) — no income tax on wages, but a 7% capital gains excise tax on large long-term gains.
- Wyoming (WY) — no income tax; mineral royalties fund much of the budget.
*New Hampshire is the asterisk you'll often see: it historically taxed investment income, but that tax ended after 2024, so it now joins the group with no tax on earned income.
How do these states pay for everything?
No income tax doesn't mean no taxes. State governments still need to fund schools, roads and services, so they shift the burden elsewhere.
Sales tax
Washington, Nevada, Tennessee and others lean on relatively high combined state-and-local sales taxes. If you spend a large share of your income, a high sales tax can quietly claw back much of your income-tax savings.
Property tax
Texas and New Hampshire are well known for above-average property taxes. Homeowners there may pay far more in property tax than they would have paid in income tax elsewhere.
Resource and industry revenue
Alaska and Wyoming benefit from oil, gas and mineral extraction, while Nevada and Florida tax tourism and gaming heavily — letting visitors and industries shoulder costs residents avoid.
Federal taxes still apply
It's worth stressing: living in a no-income-tax state only removes the state layer. You still owe federal income tax, Social Security and Medicare. Estimate your full federal liability with the Income Tax Calculator so you have a realistic picture of take-home pay regardless of where you live.
Who benefits most?
- High earners — the more you make, the more a percentage-based income tax would have cost, so the savings scale up.
- Retirees — pension, 401(k) and IRA withdrawals that would be taxed elsewhere can escape state tax entirely.
- Remote workers and freelancers — self-employed individuals often see meaningful savings, though they must watch where income is sourced.
Self-employed readers should also factor in self-employment tax, which is federal and unavoidable. Use the Freelancer Tax Calculator to estimate quarterly obligations before assuming a move solves everything.
Worked example: a $120,000 earner moving to Texas
Imagine Jordan earns $120,000 and moves from a state with a flat 5% income tax to Texas.
- State income tax saved: roughly $6,000 a year (5% of $120,000).
- Property tax difference: Texas property taxes might add $3,000–$5,000 more on a similar home, depending on county.
- Sales tax: broadly comparable, so neutral for Jordan.
- Net result: a real but smaller saving than the headline $6,000 — perhaps $1,000–$3,000 once property tax is counted.
The lesson: compare the total tax burden, not just the income-tax line. A renter in Texas would keep far more of that $6,000 than a homeowner.
No income tax vs low income tax
A handful of states sit just outside this list with very low or flat income taxes, and they sometimes beat the no-tax states once other levies are counted. States like North Dakota, Arizona and several flat-tax states impose only a small percentage on income while keeping property and sales taxes moderate. The point is that "zero income tax" is a marketing headline, not a guarantee of the lowest overall bill.
- A flat 2.5% income tax on $80,000 is only $2,000 — easily outweighed by a few thousand dollars of extra property tax in a "tax-free" state.
- Sales-tax-free Alaska and low-property-tax states can be cheaper overall than a no-income-tax state with steep property bills.
- Tax mix matters more than any single tax line, so look at your spending profile and home value together.
Things to check before relocating
- Residency rules. States you leave may still tax you if you don't properly establish domicile elsewhere.
- Cost of living. Housing, insurance and utilities vary widely and can dwarf tax differences.
- Investment income. Remember Washington's capital gains excise tax if you realize large gains.
- Retirement timeline. A no-tax state can be especially valuable in drawdown years. Project your needs with the Retirement Calculator.
Related Calculators
- Income Tax Calculator — estimate your federal tax and take-home pay.
- Freelancer Tax Calculator — gauge self-employment and quarterly taxes.
- Retirement Calculator — plan tax-efficient withdrawals in retirement.
For more US tax guides and tools, visit the USA tax & money hub.
Frequently Asked Questions
Which US states have no income tax in 2026?
Nine states levy no broad personal income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. New Hampshire stopped taxing interest and dividend income after 2024, joining the others with no tax on wages.
Do no-income-tax states have higher other taxes?
Often, yes. States without income tax usually raise revenue through higher sales taxes, property taxes, or industry-specific levies. For example, Texas and New Hampshire have relatively high property taxes, while Washington has a high sales tax. Always compare the total tax burden, not just income tax.
Does Washington tax capital gains if it has no income tax?
Washington has no tax on wage or salary income, but since 2022 it imposes a 7% excise tax on long-term capital gains above an annual threshold (indexed for inflation). So while ordinary income is untaxed, large investment gains can be taxed at the state level.
Is it worth moving to a state with no income tax?
It depends on your income, spending and lifestyle. High earners and retirees with pension or investment income often save the most. But higher property or sales taxes, cost of living, and the rules for establishing residency can offset the benefit, so run the full numbers before relocating.