States With No State Income Tax in 2026

Nine states do not levy a broad-based personal income tax on wages and salaries in 2026. If you are deciding where to live, retire, or run a business, the absence of a state income tax is only one piece of the puzzle — property taxes, sales taxes, and targeted levies can shift the real cost around in unexpected ways. This guide walks through each state, the exceptions you still need to watch, and the trade-offs that actually matter for a household budget. (StateByStateTax)

The nine states with no wage income tax

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming collect no general state income tax on ordinary earned income. The list has been stable for years, but the details behind each name are not identical. (Tax Foundation)

• Alaska has no state income tax and no state sales tax, and it sends residents an annual Permanent Fund dividend from oil revenue. The offset is high local property taxes and the high cost of living in remote areas.
• Florida has no income tax and a relatively low cost of living in many regions, which is why it attracts retirees. It funds services through a mix of sales tax, tourism taxes, and property taxes.
• Nevada relies heavily on sales and gaming taxes rather than income tax. Property taxes are capped by law for longtime residents, which can keep housing costs predictable.
• New Hampshire taxes interest and dividends, but that tax is being phased out and reaches zero for tax year 2027. Wages were never subject to the tax.
• South Dakota has no income tax and a low effective property tax burden, though it does levy a statewide sales tax plus local options.
• Tennessee fully eliminated its Hall income tax on investment income in 2021, so it now has no broad income tax at all.
• Texas has no income tax but high property taxes, which is the main way local schools and services are funded.
• Washington has no income tax on wages, but it does levy a capital gains tax on certain long-term gains above a threshold and funds a long-term care payroll program (WA Cares).
• Wyoming has no income tax and low property taxes, and it draws significant revenue from mineral extraction, which softens the need for other taxes.

What "no income tax" does not mean

A state without an income tax still has to pay its bills. The revenue shows up elsewhere, and those elsewhere costs are easy to underestimate when you are comparing states on a spreadsheet. (StateByStateTax)

Sales taxes are the most visible substitute. Tennessee, for example, pairs no income tax with one of the higher combined sales tax rates in the country once local adds are included. A family that spends most of its income rather than saving it can end up paying a meaningful share back through consumption taxes. (Tax Foundation)

Property taxes are the quieter substitute. Texas and New Hampshire lean on property taxes to fund schools. If you own a home, the absence of an income tax can be more than offset by a large annual property tax bill, especially in high-value housing markets. (Tax Foundation)

Payroll and targeted levies matter too. Washington's capital gains tax and WA Cares payroll premium are real costs even though there is no wage income tax. New Hampshire's interest-and-dividends tax, while fading out, still applies for 2026 on higher-income investors. (Washington Department of Revenue)

Retirement and Social Security

For retirees, the no-income-tax states are attractive because they do not tax Social Security benefits or traditional pension withdrawals at the state level. That said, a retiree who draws heavily from a taxable brokerage account may still face federal tax, and in New Hampshire the interest-and-dividends tax can touch investment income through 2026. (StateByStateTax)

The bigger retirement consideration is often healthcare and property tax relief. Several no-income-tax states offer homestead exemptions or circuit-breaker credits that lower property taxes for seniors, which can matter more to a fixed-income household than the income tax rate does. (StateByStateTax)

Remote work and residency

If you live in a no-income-tax state but work remotely for a company based in a high-tax state, your residency usually governs. You generally owe income tax to the state where you are physically working, not the state where your employer sits — with the notable exception of states that apply a "convenience of the employer" rule. That rule, used by a handful of states, can tax remote workers as if they were in the employer's state even when they never set foot there. It does not apply between two no-income-tax states, but it can bite if your employer is in New York or a similar state. (StateByStateTax)

Business owners and entity choice

Business owners sometimes look at Wyoming or Nevada for entity formation because of the favorable tax and privacy climate. Forming an LLC in a no-tax state does not, by itself, exempt you from tax where you actually live and operate. A Delaware or Wyoming entity owned by a California resident is still taxed where the owner resides. The entity state matters for fees, privacy, and court systems, not for escaping the owner's home-state income tax. (Tax Foundation)

How to compare two states fairly

Start with your own numbers rather than the headline tax rate. Take your expected income, add an estimate of property tax on the home you would buy, layer in the sales tax on your spending pattern, and then subtract any credits or exemptions you would qualify for. Only after that calculation does the "no income tax" label translate into a real dollar difference. (Tax Foundation)

For most wage earners, moving from a high-tax state to a no-income-tax state produces the largest, most predictable saving. For investors and business owners, the savings are real but smaller and more dependent on specific facts. And for anyone on a fixed income, property tax relief and healthcare costs often decide the outcome more than the income tax line. (Tax Foundation)

What this means for you

No-income-tax states are not uniformly "cheaper," but they are genuinely simpler for wage earners and retirees. Before you move, model your full tax picture — income, property, sales, and any targeted levy — and confirm how your remote-work arrangement and investments would be treated. The states on this list remove one tax entirely, and for many households that single change is worth thousands of dollars a year. (StateByStateTax)

Disclaimer: This article is general educational information, not tax, legal, or investment advice. Dollar amounts come from the 2026 sources listed at the end of this article and may change. Before you act, talk to a licensed CPA, EA, or tax attorney about your own situation.