💰 How Much Could You Save?
Quick Savings Calculator:
- $50,000 income: Save $1,500-$3,000/year (vs California or New York)
- $75,000 income: Save $2,500-$5,000/year
- $100,000 income: Save $4,000-$8,000/year
- $150,000 income: Save $7,000-$12,000/year
Over a 30-year career, that's $75,000-$360,000 in savings!
The Complete List: 9 Tax-Free States
As of 2025, nine US states have zero state income tax on wages, salaries, and most other types of income. That means more money in your pocket every paycheck—no state withholding, no April surprise tax bills from your state.
🏔️ Alaska
No income tax since: Never had one
How they fund it: Oil revenues (Permanent Fund)
Bonus: Annual Permanent Fund Dividend ($1,000-$3,000/year to every resident!)
Watch for: High cost of living, especially in remote areas
🏖️ Florida
No income tax since: Never had one
How they fund it: Sales tax (6%), tourism, property taxes
Best for: Retirees, remote workers, families
Watch for: Higher homeowners insurance costs
🎰 Nevada
No income tax since: Never had one
How they fund it: Gaming/casino taxes, sales tax (6.85%), tourism
Best for: Entrepreneurs, entertainment workers, retirees
Watch for: Sales tax can add up quickly
🍁 New Hampshire
No income tax since: January 1, 2025 (NEW!)
Previously taxed: Interest & dividends at 5% (now eliminated)
Best for: Remote tech workers near Boston, retirees with investments
Watch for: Higher property taxes (2nd highest in US)
🌾 South Dakota
No income tax since: Never had one
How they fund it: Sales tax (4.5%), tourism (Mount Rushmore)
Best for: Agriculture, low cost of living seekers
Watch for: Harsh winters, rural lifestyle
🎸 Tennessee
No income tax since: January 1, 2021
Previously taxed: Interest & dividends (eliminated 2021)
Best for: Musicians, healthcare workers, families
Watch for: Sales tax is high (7%+)
🤠 Texas
No income tax since: Never had one (constitutionally prohibited!)
How they fund it: Sales tax (6.25%), property taxes, oil
Best for: Tech workers, families, entrepreneurs
Watch for: Property taxes are among highest in US (avg 1.6%)
☕ Washington
No income tax since: Never had one
How they fund it: Sales tax (6.5%), B&O tax on businesses
Best for: Tech workers (Seattle), outdoor enthusiasts
Watch for: Capital gains tax on gains over $250k (7%)
🏔️ Wyoming
No income tax since: Never had one
How they fund it: Mineral extraction (oil, gas, coal)
Best for: Outdoor lovers, low cost of living seekers
Watch for: Limited job opportunities, very rural
How No-Income-Tax States Compare
| State | Sales Tax | Property Tax | Cost of Living | Population |
|---|---|---|---|---|
| Alaska | None | Low (1.04%) | Very High | 736,000 |
| Florida | 6% | Medium (0.91%) | Medium-High | 22.2M |
| Nevada | 6.85% | Low (0.60%) | Medium | 3.1M |
| New Hampshire | None | Very High (2.05%) | High | 1.4M |
| South Dakota | 4.5% | Low (1.22%) | Low | 887,000 |
| Tennessee | 7% | Low (0.64%) | Low-Medium | 7.0M |
| Texas | 6.25% | High (1.60%) | Medium | 30.0M |
| Washington | 6.5% | Medium (0.94%) | High | 7.7M |
| Wyoming | 4% | Low (0.61%) | Low-Medium | 577,000 |
Pros & Cons of No-Income-Tax States
✅ Pros
- Immediate savings: More take-home pay every paycheck
- Simple taxes: No state return to file
- Entrepreneur-friendly: Keep more business profits
- Retiree-friendly: Social Security and pensions aren't taxed
- Predictable: No surprise state tax bills
- Attract businesses: More job opportunities
❌ Cons
- Higher other taxes: Sales, property, or fees often higher
- Fewer services: Less state funding for programs
- Regressive: Sales tax hits low-income families harder
- Property tax: Can exceed income tax for homeowners
- Hidden costs: Higher insurance, utilities, etc.
- Limited deductions: Can't deduct state income tax federally
⚠️ Important: Consider Total Tax Burden
No income tax ≠ Low total taxes!
Example: Texas has no income tax, but property taxes are among the highest in the US. A homeowner with a $300,000 house pays ~$4,800/year in property taxes in Texas vs ~$2,700 in California.
Bottom line: Run the full numbers for YOUR situation (income, homeownership, spending habits) before moving.
Who Benefits Most from No-Income-Tax States?
✅ Best for:
- High earners ($100k+): Biggest absolute dollar savings
- Retirees: Social Security, pensions, and retirement withdrawals untaxed
- Remote workers: Can live anywhere, might as well pay less tax
- Entrepreneurs: Business income not taxed at state level
- Renters: Avoid high property taxes, enjoy income tax savings
- Investors: Most states don't tax capital gains or dividends
❓ Maybe not for:
- Low earners: Wouldn't pay much state tax anyway, but higher sales tax hurts
- Homeowners in high-property-tax states: May offset income tax savings
- Those who value services: High-tax states often have better schools, transit, services
Real Example: Moving from California to Texas
Scenario: Single person, $80,000 salary, renting an apartment
| Tax Type | California | Texas | Annual Savings |
|---|---|---|---|
| State Income Tax | $3,600 | $0 | ✅ $3,600 |
| Federal Income Tax | $9,200 | $9,200 | Same |
| Sales Tax (est.) | $600 | $800 | ❌ -$200 |
| Property Tax | $0 (renting) | $0 (renting) | Same |
| TOTAL | $13,400 | $10,000 | ✅ $3,400/year |
Net result: This person saves $3,400/year by moving to Texas. Over 10 years, that's $34,000—enough for a down payment on a house!
What About Federal Taxes?
Important: You still pay federal income tax no matter which state you live in. No-income-tax states only eliminate the state portion.
For 2025, federal tax rates range from 10% to 37% depending on income. Use our USA Tax Calculator to see your complete federal + state tax picture.
Should You Move to a No-Income-Tax State?
Questions to Ask Yourself:
- How much would you actually save? Use our calculator for your exact income.
- Do you own a home? Property taxes might offset savings in TX, NH.
- What's the cost of living? Cheap taxes don't help if rent is 2x higher.
- Does your job allow remote work? If you're tied to NYC/SF, this may not be an option.
- What do you value? Some high-tax states offer services worth paying for.
- Can you handle the climate? Alaska and Wyoming winters, Florida summers...
🎯 Pro Tip for Middle-Class Earners
If you're making $60,000-$100,000 and can work remotely, the sweet spot is moving to a no-income-tax state with LOW cost of living:
- Tennessee (Nashville, Knoxville) - Growing cities, no income tax, reasonable housing
- Nevada (Reno, Henderson) - Outside Vegas, affordable and still no tax
- Florida (Tampa, Jacksonville) - Cheaper than Miami, same tax benefits
You get the income tax savings PLUS lower rent/housing = double win!
When Moving Doesn't Make Sense
Be realistic. Don't move just for taxes if:
- Your income is under $50k (savings too small to matter)
- You'd lose a high-paying job that doesn't allow remote
- Your family/support network is all in your current state
- You'd be miserable in the new climate/culture
- The cost of moving (real estate, moving truck, etc.) exceeds 2-3 years of tax savings
The bottom line: Taxes are important, but they're not everything. Quality of life matters too.
Other Low-Tax Alternatives
If the 9 no-income-tax states don't work for you, consider low-tax states instead:
- North Dakota: 2.5% top rate (lowest progressive tax state) - Calculate →
- Indiana: 3.0% flat rate - Calculate →
- Pennsylvania: 3.07% flat rate - Calculate →
- Louisiana: 3.0% flat rate - Calculate →
See our complete guide: Lowest Tax States 2025
Frequently Asked Questions
Can states add income tax in the future?
Technically yes, but it's politically very difficult. Texas and Wyoming have constitutional protections against income tax. In other states, voters would likely revolt. That said, nothing is permanent—monitor your state's politics.
Do I still get a state tax refund if I move mid-year?
If you moved FROM a tax state TO a no-tax state mid-year, you'll file a part-year return in your old state for the months you lived there. If you overpaid through withholding, yes, you'll get a refund. Going forward, just update your W-4 to stop state withholding.
What if I work remotely for a company in a tax state?
You pay taxes based on where YOU live and work, not where your employer is located. If you live in Florida and work remotely for a New York company, you pay NO state tax (except New York has reciprocity rules—consult a tax pro for NY specifically).
Are there states with no property tax?
No. All 50 states have some form of property tax on real estate. However, property tax rates vary widely (0.3% in Hawaii to 2.5% in New Jersey). If you rent, you don't directly pay property tax.
Take Action: Calculate Your Potential Savings
Ready to see how much you could save? Use our free calculator to compare your current state to no-income-tax alternatives:
Calculate Your Tax Savings Now →
Related Resources
- Highest Tax States 2025 - See what you're escaping from
- States with Flat Tax - Simple alternative to progressive tax
- 2025 State Tax Reforms - What changed this year
- California vs Texas Tax Comparison
- New York vs Florida Tax Comparison