The 9 States With No Income Tax (and What They Tax Instead)
Nine US states don't tax wage income. Sounds great — but states need revenue from somewhere, and that 'somewhere' might cost you more than income tax would.
The nine states
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. New Hampshire taxes interest and dividends through 2024 (phasing out fully in 2025). Washington taxes long-term capital gains over $250K.
Where the money comes from instead
- Sales tax — Tennessee combined rates hit 9.5%+, Washington 10%+
- Property tax — Texas effective rates among the highest in the US
- Tourism/severance — Florida (tourism), Alaska & Wyoming (oil/gas)
- Excise taxes — gas, alcohol, hotel
Run the real comparison
For a remote worker earning $150K, moving CA → TX saves ~$10K in state income tax. But a $600K Texas home with a 2.2% effective property tax rate costs $13,200/year vs $5,000 in California. Net result depends entirely on your situation.
Hidden gotchas
- Washington's 7% capital gains tax on gains over $250K
- Tennessee's high combined sales tax — including on groceries
- New Hampshire's still-active 5% interest & dividends tax (2024)
- Florida's high homeowner's insurance — not a tax, but a real cost
Establish residency the right way
See our state residency guide. A driver's license alone won't shake your old state — domicile is a basket test.
Run your own numbers
Use our free, in-browser calculators — no signup, no data collection.
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