States with NO Income Tax

There are nine states in the U.S. that do not currently impose a state income tax. These states are:

Alaska

Known for its lack of a state income tax and sales tax, Alaska funds its budget primarily through taxes on oil and gas companies. Residents also benefit from the Alaska Permanent Fund Dividend, which provides an annual payment to residents.

Florida

With no state income tax since 1855, Florida relies heavily on property taxes and tourism-related revenue. It’s a popular destination for retirees, although housing costs can be competitive.

Nevada

Nevada operates without a personal or corporate income tax, generating revenue mainly from tourism, gaming, and sales taxes. However, housing costs can be higher than some might expect.

South Dakota

This state eliminated its income tax in 1943 and maintains low sales tax rates. South Dakota is often considered very tax-friendly, especially for retirees.

Tennessee

Tennessee does not tax wages or investment income, having phased out its Hall Income Tax in recent years. The state does have one of the highest combined state and local sales tax rates.

Texas

Texas has no state income tax, but it compensates with higher property taxes. The state’s economy is robust, attracting many residents.

Washington

While Washington does not tax personal income, it does tax dividends and interest. The state has a high sales tax rate, which helps fund public services.

Wyoming

Wyoming has no state income tax and benefits from revenue generated from mineral extraction. The state is known for its low overall tax burden.

New Hampshire

New Hampshire does not tax earned income, but it does levy a 4% tax on dividends and interest, which is set to be phased out by 2027.

While living in a state with no income tax can provide some financial benefits for homeowners, it's important to consider the full spectrum of taxes and living costs before making a decision to move. The actual benefit will depend on individual circumstances, including income level, property value, and spending habits.