Washington vs Texas Tax Comparison 2025: The No-Tax State Showdown
🎯 Quick Answer: Which is Better?
For tech workers making $120k+: Washington (Seattle) - Better pay, weather, no property tax for renters, but expensive housing
For families buying homes: Texas (Austin/Dallas) - Affordable housing, lower cost of living, but high property taxes
For retirees: Texas wins - Lower overall costs, no estate tax, warmer winters
For outdoor enthusiasts: Washington - Mountains, ocean, hiking year-round without brutal heat
The No-Income-Tax Showdown: WA vs TX
Both Washington and Texas have 0% state income tax. You keep your full paycheck (minus federal taxes) in either state. So why does the decision matter?
Because everything else is different.
Let's break down the real math, the hidden costs, and which state actually wins for your situation.
Income Tax Comparison (Spoiler: It's a Tie)
| Tax Type | Washington | Texas |
|---|---|---|
| State Income Tax | 0% | 0% |
| Local Income Tax | None | None |
| Capital Gains Tax | 7% on $250k+ | 0% |
Key Difference: Washington enacted a 7% capital gains tax on gains over $250,000/year (effective 2022). If you're in tech with significant stock compensation, this matters. Texas has no capital gains tax at all.
Sales Tax: Texas Wins (Slightly)
| Location | Sales Tax Rate |
|---|---|
| Washington (Statewide) | 6.5% + local (up to 4%) |
| Seattle | 10.25% |
| Texas (Statewide) | 6.25% + local (up to 2%) |
| Austin | 8.25% |
| Dallas | 8.25% |
Impact: On $25,000/year of taxable purchases:
- Seattle: $2,563 sales tax
- Austin: $2,063 sales tax
- Difference: Texas saves ~$500/year
Property Tax: Texas MUCH Higher
This is where things get interesting.
| Location | Average Property Tax Rate | On $400k Home |
|---|---|---|
| Washington (Statewide) | 0.84% | $3,360/year |
| Seattle | 0.92% | $3,680/year |
| Texas (Statewide) | 1.60% | $6,400/year |
| Austin | 1.81% | $7,240/year |
| Dallas suburbs | 2.0%+ | $8,000/year |
Verdict: Texas property taxes are nearly double Washington's rates. On a $400k home, you pay $3,000-$4,500 more per year in Texas.
BUT: If you're renting, you avoid property taxes entirely. Washington becomes very attractive for renters.
Real Cost of Living: $120k Tech Worker
Scenario: Software Engineer, $120,000 Salary, Renting 1BR
Seattle, WA
- State income tax: $0
- Rent (1BR downtown): $2,200/mo = $26,400/year
- Sales tax (on $25k purchases): $2,563
- Groceries: $5,000/year (no tax on groceries)
- No car needed: Save $6,000/year (light rail works)
- Total annual costs: ~$40,000
- After-tax income: ~$93,000
- Savings potential: ~$53,000/year
Austin, TX
- State income tax: $0
- Rent (1BR downtown): $1,700/mo = $20,400/year
- Sales tax (on $25k purchases): $2,063
- Groceries: $4,200/year (no tax)
- Car required: $6,000/year (insurance, gas, maintenance)
- Total annual costs: ~$39,000
- After-tax income: ~$93,000
- Savings potential: ~$54,000/year
Result: Basically a tie for renters! Rent savings in Austin offset car costs. Seattle's walkability vs Austin's car culture cancel each other out.
Real Cost of Living: $150k Family Buying a Home
Scenario: Family, $150k Combined Income, Buying $450k Home
Seattle Suburbs (Bellevue, Redmond)
- State income tax: $0
- Mortgage: $2,800/mo = $33,600/year
- Property tax: $4,140/year (0.92%)
- Total housing: $37,740/year
Austin Suburbs (Round Rock, Cedar Park)
- State income tax: $0
- Mortgage: $2,800/mo = $33,600/year
- Property tax: $8,145/year (1.81%)
- Total housing: $41,745/year
Texas costs $4,000 more per year for homeowners due to property taxes.
BUT: Texas homes appreciate slower but are more affordable to buy initially. Seattle/WA homes are often $100k-$200k more expensive for similar properties.
Job Market & Salaries
Tech Jobs: Washington (Seattle) Wins
| Role | Seattle Salary | Austin Salary | Difference |
|---|---|---|---|
| Software Engineer (Mid-Level) | $140,000 | $115,000 | +$25k Seattle |
| Senior Engineer | $180,000 | $145,000 | +$35k Seattle |
| Product Manager | $150,000 | $125,000 | +$25k Seattle |
Tech Employers:
- Seattle: Amazon, Microsoft, Google, Meta, Boeing, Zillow, Expedia
- Austin: Tesla, Oracle, Apple, Indeed, Amazon (growing), Dell
Verdict: Seattle has more established tech jobs and pays 15-25% more. Austin is growing fast but can't match Seattle salaries yet.
Weather: HUGE Difference
| Climate Factor | Seattle, WA | Austin, TX |
|---|---|---|
| Summer Temp | 75°F (pleasant) | 98°F (brutal) |
| Winter Temp | 45°F (mild, rainy) | 60°F (sunny) |
| Humidity | Moderate | High (oppressive) |
| Sunny Days/Year | 152 (gray often) | 300 (very sunny) |
| Rain | Frequent drizzle | Occasional storms |
| A/C Required | No (homes don't have it) | Yes (100+ days) |
Key Trade-Off:
- Seattle: Mild summers, no brutal heat, but gray/rainy 6-8 months/year. Many people get seasonal depression.
- Texas: Sunshine year-round, but summers are genuinely miserable (100°F+ with humidity). You stay indoors June-August.
Lifestyle & Culture
Seattle/Washington:
- Outdoors: Mountains (Cascades), ocean (Puget Sound), skiing, hiking, camping year-round
- Food: Incredible seafood, Asian food, coffee culture
- Politics: Very liberal (one of the bluest states)
- Culture: Reserved, introverted, tech-focused
- Issues: Homelessness visible in Seattle, expensive, "Seattle Freeze" (hard to make friends)
Austin/Texas:
- Outdoors: Hill Country, lakes (Lady Bird, Travis), BBQ scene, live music
- Food: Best BBQ in the world, Tex-Mex, food trucks
- Politics: Austin is liberal oasis in conservative state (complicated)
- Culture: Friendly, outgoing, "Keep Austin Weird"
- Issues: Growing too fast, traffic terrible, losing "weird" vibe
Other Considerations
No State Estate Tax
Washington: Has a state estate tax on estates over $2.193M (2025)
Texas: No state estate tax
Winner: Texas (matters for high net worth individuals)
Earthquakes vs Hurricanes
Washington: Earthquake risk (Cascadia Subduction Zone - "The Big One" predicted)
Texas: Hurricane risk (coastal areas), tornadoes (rare in Austin/Dallas)
Winner: Tie (both have risks, but Austin/Dallas relatively safe)
Public Transit
Seattle: Excellent light rail, buses, ferries. You don't need a car if you live/work downtown.
Austin: Terrible. You absolutely need a car. Light rail is minimal.
Winner: Seattle (major difference)
The Verdict: Who Wins?
Choose Washington (Seattle) If:
- You work in tech and want the highest salaries
- You're renting (avoid property tax)
- You hate extreme heat and can handle gray winters
- You want walkability and don't want to drive everywhere
- You love mountains, skiing, ocean access
- You're young and single (easier to absorb higher costs)
Choose Texas (Austin) If:
- You're buying a home and want more house for your money
- You prioritize sunshine year-round
- You don't mind driving everywhere
- You're retiring and want lower overall costs
- You want friendly, outgoing culture
- You have stock compensation over $250k/year (avoid WA capital gains tax)
Financial Calculator
Your Situation: Which State Saves More?
Buying a $400k home? Washington saves you ~$3,500/year in property taxes.
Renting? Basically a tie. Pick based on lifestyle.
Tech salary over $150k? Seattle pays $25k-$40k more. Easily offsets higher costs.
Retired with no income? Texas wins - lower sales tax, lower groceries, no estate tax.
Key Calculators:
- Washington Tax Calculator - Verify 0% income tax
- Texas Tax Calculator - Verify 0% income tax
The Bottom Line
For tech workers: Seattle wins (better pay, better jobs, walkability)
For families buying homes: Texas wins (affordable housing despite property taxes)
For retirees: Texas wins (lower costs, better weather)
For outdoor enthusiasts who hate heat: Washington wins
Both are great no-tax states. Pick based on lifestyle, not just taxes.
More comparisons: CA vs TX | NY vs FL | CA vs FL | IL vs TX
State rankings: Lowest Tax States 2025 | Best States for Retirees | States with No Income Tax