Last Updated: April 2026
When you sell stocks, real estate, or other assets at a profit, you owe federal capital gains tax — and in most states, state capital gains tax on top. While the federal rate is 0%, 15%, or 20% depending on your income, state rates vary dramatically: from 0% in nine states to 13.3% in California.
This guide covers capital gains tax rates for all 50 states in 2026, which states offer preferential rates for long-term gains, and key planning strategies for investors.
Nine US states have no state income tax — and therefore no state capital gains tax on most gains:
For investors with large capital gains events (real estate sales, stock option exercises, business sales), relocating to Florida, Texas, or Nevada before the sale can save tens of thousands in state tax. California aggressively pursues departing residents — establishing genuine domicile in a new state before a liquidity event requires careful planning.
These states tax capital gains as ordinary income at the same rates as wages:
| State | Top State CGT Rate | Combined (State + 20% Federal) |
|---|---|---|
| California | 13.3% | ~33.3% |
| Oregon | 9.9% | ~29.9% |
| Minnesota | 9.85% | ~29.85% |
| New Jersey | 10.75% | ~30.75% |
| Washington DC | 10.75% | ~30.75% |
| Vermont | 8.75% | ~28.75% |
| New York + NYC | 10.9% + 3.876% | ~34.8% (NYC residents) |
| Massachusetts | 5% (LT) / 8.5% (ST) | ~25% (LT) |
| Wisconsin | 7.65% | ~27.65% |
| Maine | 7.15% | ~27.15% |
For a California resident earning $500,000+ selling $1M in appreciated stock: federal CGT ~$200,000 (20%) + California ~$133,000 (13.3%) + Net Investment Income Tax $38,000 (3.8%) = approximately $371,000 in total tax on the $1M gain.
A handful of states offer lower rates on long-term capital gains versus ordinary income:
States with flat income taxes (like Arizona's 2.5%, Colorado's 4.40%, Idaho's 5.8%) tax capital gains at those flat rates — which may be lower than the graduated rates in high-tax states.
Washington State introduced a 7% capital gains tax (effective January 1, 2022) on long-term capital gains above $250,000 per year. This was upheld by the Washington Supreme Court in 2023. Key details:
CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. Learn more about our affiliate partnerships
★ 4.8 verified reviews · 3,758 reviews
Large capital gains events — stock sales, business exits, real estate — need specialist tax planning. A CPA can model timing strategies, state domicile options, and installment sale structures to minimise your capital gains tax. Get matched with a specialist CPA.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →Potentially — but California's Franchise Tax Board aggressively audits departing high-income taxpayers. To successfully establish residency outside California (and avoid CA CGT), you must: (1) Establish genuine domicile in the new state before the gain-triggering event (stock sale, business sale, etc.); (2) Sever significant California ties — driver's license, voter registration, bank accounts, professional memberships; (3) Spend fewer than 546 days in California over 2 consecutive years; (4) Make the new state your primary home by all objective measures. Simply buying a home in Nevada while maintaining California ties does not work. California can audit for up to 4 years after a return is filed and requires evidence of genuine domicile change.
Federal and state capital gains taxes are separate — you pay both. Federal long-term CGT rates (for assets held over 1 year): 0% on gains if total taxable income is below $47,025 (single, 2024); 15% for income $47,026–$518,900; 20% above $518,900. Additionally, the 3.8% Net Investment Income Tax (NIIT) applies to net investment income for high earners (above $200,000 single). State rates are then added on top. A California high earner faces: 20% federal + 3.8% NIIT + 13.3% California = 37.1% combined rate. A Florida resident: 20% federal + 3.8% NIIT + 0% state = 23.8%.
For federal purposes: real estate held more than 1 year qualifies for the same long-term CGT rates (0%/15%/20%). Additionally, Section 121 excludes up to $250,000 (single) / $500,000 (married) of gain from selling a primary residence owned and occupied for 2 of the last 5 years. Real estate depreciation recapture is taxed at 25% federally (unrecaptured Section 1250 gain). For state purposes: most states treat real estate gains identically to other gains. Washington State's CGT exempts real estate entirely. California: no exemption for real estate beyond the federal primary residence exclusion.
Purely on CGT: Florida, Texas, and Nevada are tied at 0% — any of these is better than California (13.3%), New Jersey (10.75%), or New York (10.9% + 3.876% NYC). For large investors, the difference is material: on a $1M capital gain, California adds $133,000 in state tax that Florida doesn't charge. Nevada is particularly popular with tech founders pre-IPO and hedge fund managers. Wyoming has become popular for trust and LLC tax planning. Arizona's 2.5% flat rate is the lowest of states with any income tax.