You're staring at your pay stub, and there it is. A chunk of change—sometimes a massive, painful chunk—disappearing into the state’s coffers before you even get to see it. It’s enough to make anyone start browsing Zillow for a house in a place where the government keeps its hands out of your pockets. Honestly, the idea of keeping 100% of your state-level earnings is the American dream for a lot of us.
But when people ask which states dont have state income tax, they usually want more than just a list. They want to know if they’ll actually be richer at the end of the year.
Spoiler alert: Taxes are like a game of Whac-A-Mole. If the state doesn't hit you on your paycheck, they’re probably gonna get you at the cash register or when you pay your property tax bill. It's a trade-off. Some people win big in this setup; others end up paying more than they did back in a "high-tax" state.
The "No Income Tax" Club of 2026
As of 2026, there are basically nine states that don't take a bite out of your regular paycheck. A few others are currently racing to join them, with Missouri and West Virginia making some pretty loud moves lately.
Here is the current lineup of states that let you keep your whole paycheck:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
- New Hampshire (This one is special—they finally fully phased out their tax on interest and dividends at the start of 2025).
It’s a diverse group. You’ve got the frozen tundra of Alaska, the humid palm trees of Florida, and the tech hubs of Seattle. But they all share one thing: a "pay as you go" or "pay where you live" philosophy instead of a "pay as you earn" one.
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How these states pay the bills without your income
The money has to come from somewhere. Roads don't pave themselves, and schools don't run on good vibes. States without income tax are experts at finding "other" revenue streams.
Take Texas, for example. Texans are fiercely proud of having no income tax. But ask a homeowner in Austin or Dallas about their property taxes, and you might see them tear up. Texas has some of the highest property tax rates in the entire country. They basically swap a tax on your labor for a tax on your shelter. If you're a high-earner renting a small apartment, you're winning. If you're a retiree on a fixed income in a house that has tripled in value, you might be struggling.
Then there’s Washington. They don't tax your wages, but they’ll get you at the mall. Their combined state and local sales tax rates often hover around 9% or 10%. Plus, they recently introduced a capital gains tax on high-dollar investment sales, which caused a huge legal stir but stayed on the books. It's not a "traditional" income tax, but it’s definitely a tax on wealth.
Florida and Nevada are the masters of taxing "the other guy." Because they are massive tourism hubs, they can fund a lot of their government through hotel taxes, gambling revenues, and sales taxes paid by visitors. Residents benefit from the tourists' wallets. It’s a pretty sweet deal if you live there year-round.
Is it actually cheaper to live there?
Kinda. It depends on your lifestyle.
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If you are a "high-income, low-consumption" person—meaning you make $200,000 a year but live in a modest house and don't buy a lot of stuff—you will save a fortune. In a state like California or New York, you might be losing $10,000 to $15,000 a year just in state income tax. Moving to Nevada puts that money straight into your brokerage account.
However, if you're a lower-income earner, these states can actually be more expensive. Sales taxes are "regressive," which is just a fancy way of saying they take a bigger percentage of a poor person's income than a rich person's. If you spend every dollar you make on groceries and clothes, and the sales tax is 10%, you're effectively paying a 10% "income tax" anyway.
The hidden costs: Insurance and Utilities
Don't let the 0% income tax rate blind you to the other bills.
- Florida has some of the highest homeowners insurance premiums in the galaxy right now due to the climate and litigation costs. You might save $4,000 on taxes and spend $8,000 on insurance.
- New Hampshire has no income tax and no sales tax (the "Live Free or Die" dream), but their property taxes are astronomical, and their utility bills are consistently among the highest in the nation.
- Alaska actually pays you to live there via the Permanent Fund Dividend, but a gallon of milk in a rural village might cost as much as a ribeye steak in the Lower 48.
The 2026 Trend: The race to zero
We are seeing something interesting right now. A bunch of states that do have income taxes are trying to kill them off to compete for residents.
West Virginia just finished a huge phase-out of taxes on Social Security benefits. Mississippi and Georgia have been slashing their flat tax rates with the stated goal of eventually hitting zero. Even Missouri's governor recently made a big push to start the "path to zero."
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Why? Because people are voting with their feet. Census data from the last few years shows a massive migration of wealth from high-tax states to these "no-tax" or "low-tax" havens. States are realizing that if they want the best talent and the most retirees, they have to make the math work for the taxpayer.
Should you move? A checklist for the tax-hungry
Before you rent a U-Haul and head for the border, you've gotta do some "back-of-the-napkin" math.
- Calculate your current state tax bill: Look at last year's return. What was the bottom line you paid to your state? That's your "savings" ceiling.
- Estimate your new property tax: Look up a house you'd actually buy in the new state. Check the tax history on Zillow. Is it double what you pay now?
- Check the sales tax: Does the new state tax groceries? Some do. That can add $100 a month to your food bill easily.
- Look at the services: Some no-income-tax states have lower-ranked schools or fewer public parks because the budget is tighter. If you have kids, this matters more than the tax break.
What to do next
If you're serious about chasing that 0% rate, your first move shouldn't be calling a realtor. It should be talking to a tax pro.
"Domicile" is a sticky legal concept. You can't just buy a condo in Florida, spend two weeks there, and tell New York you don't owe them money. High-tax states are aggressive; they will check your cell phone pings, your vet bills, and your gym memberships to prove you still "live" in their state so they can tax you.
Start by tracking your days. Most states require you to be physically present for 183 days to claim residency. If you can make the numbers work and you're willing to handle the "Whac-A-Mole" of other taxes, moving to a state with no income tax can be one of the biggest raises you'll ever give yourself.
The most effective next step you can take is to run your current income through a state-by-state tax calculator to see the "effective" tax rate. This combines income, sales, and property taxes into one number, giving you the real truth about your potential move.
Another great move is to research the specific "homestead exemptions" in states like Texas or Florida, which can significantly lower that scary property tax bill if the home is your primary residence.