A paycheck with no state income tax taken out sounds like a raise, and nine states deliver exactly that on wages in 2026. The catch is that no state runs on fresh air: the money a state does not collect from paychecks shows up somewhere else, usually in the sales tax at the register or the property tax bill on the home.
This guide lists the nine states, explains how each one pays its bills instead, and works through the math of a move.
Quick answer
Nine states charge no tax on wage income in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Washington taxes large capital gains, and New Hampshire only finished repealing its investment-income tax in 2025. Federal income tax and payroll taxes still apply everywhere, and most of these states collect more through sales or property taxes instead.
The nine states with no state income tax
Forty-two states levy an individual income tax, and 41 of them tax wage and salary income, according to the Tax Foundation’s 2026 state tax tables. The nine that do not tax wages are listed below.
| State | State sales tax | What to know |
|---|---|---|
| Alaska | None (local taxes only) | No state income tax since 1980; oil revenue funds much of the budget |
| Florida | 6 percent | Personal income tax banned in the state constitution |
| Nevada | 6.85 percent | Income tax banned in the constitution; gaming and tourism taxes carry much of the revenue |
| New Hampshire | None | No sales tax either; investment-income tax repealed January 1, 2025 |
| South Dakota | 4.2 percent | Temporary rate through June 30, 2027; returns to 4.5 percent after that |
| Tennessee | 7 percent | Average combined sales tax about 9.55 percent, one of the highest in the country; Hall Tax on investment income ended in 2021 |
| Texas | 6.25 percent | Income tax banned in the constitution; combined sales tax reaches 8.25 percent |
| Washington | 6.5 percent | No tax on wages, but a capital gains tax applies to large gains |
| Wyoming | 4 percent | No individual income tax and no corporate income tax |
New Hampshire: the newest member of the list
New Hampshire never taxed wages. Its only personal income tax was the Interest and Dividends Tax on investment income above 2,400 dollars single and 4,800 dollars joint. The legislature phased it down from 5 percent to 3 percent, then repealed it for tax periods beginning January 1, 2025, under House Bill 2. For 2026, New Hampshire residents owe no state tax on any form of personal income.
The trade-off is property tax: with no sales tax, towns fund schools and services largely through property taxes, and the state’s effective rates are among the highest in the country.
Washington: no tax on wages, but not no tax
Washington taxes no wages, salaries, pensions, or Social Security. Since 2022 it has taxed long-term capital gains: 7 percent on gains above an inflation-adjusted standard deduction, which was 278,000 dollars for 2025, rising to 9.9 percent on the portion above 1 million dollars for gains in 2025 and later. Real estate gains and retirement accounts are exempt, and the state supreme court upheld the tax in 2023. Washington has also enacted a 9.9 percent tax on individual income above 1 million dollars from tax year 2028, which is expected to face a legal challenge. For most workers the state still feels tax-free; for someone selling a business or a large stock position, it does not.
How these states pay their bills instead
A state without an income tax still funds schools, roads, police, and courts. The money comes from three places, in different mixes depending on the state.
Sales tax. Tennessee, Texas, Washington, Nevada, and Florida lean on it. Tennessee’s average combined state and local rate is about 9.55 percent, one of the highest in the country, and Texas caps combined sales tax at 8.25 percent. Alaska and New Hampshire charge no state sales tax at all.
Property tax. Texas and New Hampshire have among the highest effective property tax rates in the country, because local governments there lean hard on property taxes to fund schools. A cheap house in a low-tax county and an expensive house in a high-tax county can produce very different bills in the same state.
Other revenue. Alaska funds much of its budget from oil and shares some of it with residents through the Permanent Fund Dividend. Nevada leans on gaming and tourism taxes, Wyoming on mineral and energy revenue, and South Dakota, which collects no corporate income tax either, on its sales tax.
The pattern is the point: the tax burden moves, it rarely disappears. The Tax Foundation’s analysis of total state and local tax burdens puts Alaska, Wyoming, Tennessee, and South Dakota among the lowest in the country, so the nine are not all equal. Some genuinely cost less overall, and some mostly shift the bill.
What it means for your take-home pay
Moving to a no-income-tax state changes one line on your pay stub. Federal income tax still applies in every state, and so do Social Security and Medicare payroll taxes. A single filer earning 120,000 dollars in 2026 owes 17,570 dollars in federal income tax after the 16,100 dollar standard deduction, whether that filer lives in Texas or California. See the 2026 federal tax brackets for the full schedule.
What changes is the state line. In a state with a flat 5 percent income tax, that same 120,000 dollar salary costs about 6,000 dollars a year in state income tax before deductions. In Texas or Florida, it costs nothing. The saving scales with income: someone earning 50,000 dollars saves far less than someone earning 200,000 dollars.
Remember the difference between a marginal rate and what you actually pay. California’s top rate is 13.3 percent, the highest in the country, but it only applies to income above 1 million dollars, and most Californians pay a far lower effective rate. Comparing top rates overstates the saving from moving.
Worked example: the move that saves less than the headline
Example: a single filer earning 120,000 dollars a year moves from a state with a flat 5 percent income tax to Texas, and buys a 350,000 dollar home. The figures below are simplified and illustrative; real bills depend on the county, the home, and the deductions.
- State income tax before the move: 5 percent of 120,000 dollars is 6,000 dollars a year. After the move: 0 dollars. Saving: 6,000 dollars.
- Federal income tax: 17,570 dollars either way, so it drops out of the comparison.
- Property tax on the 350,000 dollar home: at an illustrative 1.6 percent in Texas, 5,600 dollars a year, against 2,800 dollars at an illustrative 0.8 percent in the old state. Extra property tax: 2,800 dollars a year.
- Sales tax on 25,000 dollars of taxable spending a year: at up to 8.25 percent combined in Texas, up to 2,063 dollars, against 1,500 dollars at 6 percent in the old state. Extra: up to 563 dollars a year.
- Net saving: 6,000 dollars minus 2,800 dollars minus 563 dollars is 2,637 dollars a year.
The move still pays, but the real saving is less than half the headline 6,000 dollars. A renter keeps more of it, while a buyer of an expensive home in a high-property-tax county can see the saving shrink further or vanish. Run your own numbers with a tax estimator before deciding.
Common mistakes
1. Assuming no income tax means no taxes
Sales tax, property tax, and fees fill the gap, and in some states the total is higher than the income tax it replaced. Compare the whole bill, not one line of it.
2. Moving on paper but not in fact
States decide residency by where you actually live, not by the address on a form. Keeping a home, a driver’s license, and most of your time in the old state can leave you a resident there, owing tax there anyway.
3. Forgetting the state where the money is earned
Income earned while physically working in another state is usually taxable there, even if you live in a no-tax state.
4. Ignoring Washington’s capital gains tax
A move to Washington saves nothing on a large stock or business sale. Gains above the inflation-adjusted threshold are taxed at 7 percent, and 9.9 percent on the portion above 1 million dollars.
5. Treating the list as permanent
New Hampshire only joined the no-tax list in 2025, and Washington has already legislated a tax on income above 1 million dollars from 2028. Check the current law before a move, and check it again before tax season. See when taxes are due so a move does not turn into a missed deadline.
Pros and cons
Pros: bigger paychecks with no state withholding; no state income tax return to file; retirement income is not taxed at the state level; the saving grows with income; several of the nine rank among the lowest overall state and local tax burdens in the country.
Cons: higher property taxes in Texas and New Hampshire; higher sales taxes in Tennessee, Washington, and Nevada; Washington’s capital gains tax and its planned 2028 tax on income above 1 million dollars; moving costs and residency rules.
Frequently asked questions
Do I still pay federal income tax if I move to Texas?
Yes. Federal income tax and Social Security and Medicare payroll taxes apply in every state. Moving changes only the state part of the bill.
Which no-income-tax state is cheapest overall?
There is no single answer, because the cheapest state depends on your income, your home, and your spending. Alaska, Wyoming, Tennessee, and South Dakota rank among the lowest total state and local tax burdens in the Tax Foundation’s analysis. Texas and New Hampshire look cheap on income tax but carry some of the highest property taxes in the country.
Does Washington really have no income tax?
Not exactly. Washington taxes no wages, salaries, or retirement income, but it taxes long-term capital gains at 7 percent above an inflation-adjusted threshold, 9.9 percent on the portion above 1 million dollars, and it has enacted a 9.9 percent tax on individual income above 1 million dollars starting with tax year 2028.
The bottom line
Nine states let you keep your whole paycheck free of state income tax, and for high earners the saving is real money. But the states collect what they need another way, and for a homeowner the property tax bill can quietly take back half the saving. Do the full comparison before the moving truck, not after.
Sources
Sources: Tax Foundation, State Individual Income Tax Rates and Brackets, 2026; Washington Department of Revenue, tiered capital gains tax rates, June 30, 2025; New Hampshire Department of Revenue Administration, Technical Information Release 2025-001; IRS Revenue Procedure 2025-32.
Sources and methodology
The figures, rules, and rates in this guide come from the authoritative sources linked throughout the article, including taxfoundation.org, dor.wa.gov. Where a figure is an estimate or a worked example, the article says so.
