States With No Income Tax: Complete 2025 Guide
All nine US states with no personal income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — plus the trade-offs you should know.
Nine US states levy no broad-based personal income tax on wages and salaries: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For high earners or retirees drawing from wages or Social Security, these states can offer meaningful tax savings compared to high-tax states like California or New York.
Alaska has no state income tax and no state sales tax, though some localities impose sales taxes. The state historically relied on oil revenue; budget pressures have occasionally sparked debate about introducing an income tax, but none exists as of 2025. Residents also receive annual Permanent Fund dividend checks.
Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming have no income tax on wages, interest, dividends, or capital gains. These states generally fund government through sales tax, property tax, tourism, energy, or other revenue sources. Retirees and remote workers have been relocating to them in large numbers.
New Hampshire previously taxed interest and dividends at 5% (phased down to 3% by 2024) while exempting wages. Effective January 1, 2025, the Interest and Dividends Tax was fully repealed. New Hampshire now joins the others with no tax on wage income, and as of 2025, no tax on interest and dividends either.
Washington has no general income tax but imposes a 7% excise tax on long-term capital gains above an annual standard deduction (approximately $270,000 for 2024, with inflation adjustments in subsequent years). Gains above $1 million face a higher tier. Wage earners pay no state income tax, but investors with large realized gains do.
The trade-offs matter. States without income tax often rely more on sales tax and property tax. Texas and New Hampshire have relatively high property taxes. Florida and Texas have no state income tax but levy sales taxes around 6–8% (plus local rates). Nevada and Washington rely heavily on sales tax and tourism.
Cost of living varies widely. Wyoming and South Dakota have low costs but fewer amenities; Florida and Texas have grown expensive in many areas. Alaska has very high costs in remote regions. The "no income tax" benefit should be weighed against housing costs, healthcare, and quality of life.
Estate and inheritance taxes also differ. Several no-income-tax states have no estate tax, which can matter for wealthy families. Federal estate tax still applies above the federal exemption, but state-level taxes vary.
If you are considering a move, use TaxMath to compare your effective combined federal-plus-state tax burden across states. Enter your income and filing status to see how much you would pay in income-tax states versus the nine with no wage income tax.