States With No Income Tax 2026: All 9 States Compared — Total Tax Burden, Not Just the Headline

The phrase "no income tax state" has become shorthand for "low tax state," but the reality is considerably more nuanced. Nine US states impose no broad-based personal income tax on wages and salaries. For high-income earners and retirees, this can represent a significant saving — California's top rate is 13.3%, New York's is 10.9%, and moving to Texas or Florida can save tens of thousands per year.

But the nine states compensate for missing income tax revenue in different ways. Texas and New Hampshire rely heavily on property taxes. Washington’s combined sales tax is among the highest in the nation (Tax Foundation, 2026), and Nevada’s is above average. Alaska and Wyoming have unique revenue structures (oil revenue and mineral royalties, respectively) that allow genuinely low total tax burdens.

This guide compares all nine states on total tax burden — not just the headline income tax rate — and explains the exceptions: Washington's capital gains tax and New Hampshire's now-repealed interest and dividends tax, and the local income taxes that apply in some states regardless of state-level rules.

The 9 No-Income-Tax States: Side-by-Side Comparison

All nine states are listed below with key tax metrics. Sales tax figures are combined average state-plus-local rates:

Sources: Tax Foundation 2026 combined sales tax rates; Tax Foundation effective property tax rates on owner-occupied housing; state revenue department publications.

The Exceptions: New Hampshire, Washington, and the Fine Print

Two of the nine states have important exceptions that catch recent movers off guard:

New Hampshire — Interest and Dividends Tax (Repealed)

New Hampshire has never taxed wages, salaries, or self-employment income. It historically levied the Interest and Dividends Tax (I&D Tax) on interest and dividend income (3% in its final years), but House Bill 2 repealed it effective January 1, 2025. No I&D Tax applies to tax periods beginning on or after that date, so New Hampshire now has no broad-based personal income tax.

Washington — Capital Gains Tax (Enacted 2021)

Washington enacted a 7% capital gains tax on long-term capital gains above a standard deduction ($278,000 for 2025, indexed annually) for single filers and married couples, with a 9.9% rate on gains above $1 million. This applies to gains from stocks, bonds, and certain business assets. Notable exemptions: real estate, retirement accounts (IRAs, 401(k)s), depreciable business assets, timber, and commercial fishing privileges.

The Washington capital gains tax was upheld by the state Supreme Court in March 2023. For typical W-2 workers, it has no impact. For investors and business owners selling assets, gains above the standard deduction trigger 7% Washington tax (9.9% above $1 million) — in addition to federal capital gains tax (0%, 15%, or 20%).

States That Had Income Tax and Eliminated It

Tennessee eliminated its Hall Tax on dividends and interest effective January 1, 2021. The Hall Tax rate was cut one point a year, from 4% in 2017 to 1% in 2020, before repeal. Since 2021, Tennessee is fully income-tax-free. Note: some older guides still incorrectly list the Hall Tax as active.

The Texas Property Tax Trap: Total Burden Comparison

Texas is often cited as the gold standard no-income-tax state, and its economic growth and population inflows reflect genuine tax appeal. But a comparison of a Texas homeowner to a comparable resident of Oregon or California reveals a more nuanced picture.

Worked example — $150,000 income, $400,000 home (single filer, wages only):

At $150,000 income, a Texas homeowner saves approximately $7,165 vs. an Oregon resident — but Texas's above-average property tax means a Texas homeowner actually pays roughly $2,968/year more than a comparable Florida resident once property tax is included, despite both states having zero income tax. Wyoming has the lowest total burden of the no-income-tax states shown in this scenario.

The income scaling effect: No-income-tax savings scale with income relative to income-tax states — property tax, by contrast, doesn't scale with income at all, since it depends on home value rather than earnings. That means the Texas-vs-Oregon gap widens substantially at higher incomes, even though the Texas-vs-Florida gap (driven entirely by the property tax difference) stays roughly constant regardless of income.

Where No-Income-Tax States Win Outright: Retirees and Investors

The no-income-tax states offer their clearest advantage for two specific groups:

Retirees with Pension and Investment Income

High-income-tax states typically tax pension income, IRA distributions, and investment income at ordinary income rates. California taxes pension income at up to 13.3%. New York taxes it at up to 10.9%. A retiree receiving $200,000/year in pension and IRA distributions (single filer, standard deduction) saves roughly:

• vs. California: about $14,211/year in state income tax by living in Texas or Florida
• vs. New York: about $11,328/year in state income tax (before any NYC resident tax or New York pension exclusion)
• Property tax offset: if the retiree owns a $500,000 home, Texas property tax would cost ~$7,000/year — still net positive vs. NY or CA

Florida wins outright for most retirees: lower property tax than Texas, Homestead Exemption reduces assessed value by up to $50,000, and the Save Our Homes cap limits annual assessment increases to 3% (or inflation, if lower) on homesteaded property.

High-Income Tech Workers and Founders

California's top marginal rate is 13.3% vs. Texas's 0%; on $1M of wages a single California filer owes about $102,459 in state income tax (2026, standard deduction), which is the annual saving from living in Texas. Tech workers who relocate from San Francisco to Austin or Seattle to Austin commonly cite this differential. Washington's capital gains tax partially offset this advantage for founders with large equity stakes — but it only applies to long-term gains above the standard deduction ($278,000 for 2025) and only to realized gains, not unvested equity.

Local Income Taxes in No-Income-Tax States

An important caveat: in most of the nine no-income-tax states, municipalities cannot levy their own income taxes. However, there are exceptions worth noting:

• Washington — Metro SHS and Multnomah County (Oregon border): Workers who commute across the Oregon border face Oregon state income tax (plus Portland metro local taxes) on Oregon-source wages even if they live in Washington.
• Tennessee: No local income taxes exist in Tennessee.
• Texas: No local income taxes. Texas municipalities can levy property taxes (contributing to the high average) but not local income taxes.
• Nevada: No local income taxes.
• Florida: No local income taxes.
• Alaska: A handful of Alaska municipalities (Juneau, Sitka) levy a local sales tax, but no Alaska locality levies an income tax.

The relevant exception for this guide is Washington state residents who commute to Oregon (common in the Portland/Vancouver, WA corridor) — they face Oregon income tax on Oregon-source wages plus potentially Portland metro local taxes, even though Washington itself has no income tax. This is among the most complex cross-state tax situations in the US and is covered separately in the Oregon/Portland local tax guide.