States With No State Tax: Full 2026 List and What They Tax Instead
States with no state tax: nine states skip the wage income tax in 2026, but each collects sales, property or business taxes instead. See the full list.
States with no state tax on wages number nine in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Residents of these states pay no state income tax on salary. They still pay federal income tax and payroll tax, and each state raises money in other ways.
Key takeaways
- Nine states levy no broad individual income tax on wages in 2026.
- New Hampshire repealed its tax on interest and dividends for 2025 onward, and Tennessee ended its Hall tax on investment income back in 2021.
- Washington has no wage tax, but it does tax large long-term capital gains.
- No income tax does not mean low taxes. Sales, property, excise and business taxes make up the difference.
- Federal income tax, Social Security and Medicare apply in every state.
The nine states with no state tax on income
The list below shows what each state taxes in place of income. Rates change, so treat the sales tax column as the state-level rate only. Local sales taxes add to it in most of these states.
| State | Taxes wages? | Main substitute revenue | Worth knowing |
|---|---|---|---|
| Alaska | No | Oil and gas revenue, excise and local taxes | No statewide sales tax, though many cities and boroughs charge their own |
| Florida | No | Sales tax (6% state rate), tourism, property tax | Corporate income tax still applies to businesses |
| Nevada | No | Sales tax (6.85% state rate), gaming and tourism taxes | Businesses pay a Commerce Tax and a Modified Business Tax |
| New Hampshire | No | Property tax, business taxes | No general sales tax; interest and dividends tax repealed from 2025 |
| South Dakota | No | Sales tax (4.2% state rate), property tax | Frequently ranks among the lowest-burden states |
| Tennessee | No | Sales tax (7% state rate), the highest state rate in this group | Hall tax on investment income ended in 2021 |
| Texas | No | Sales tax (6.25% state rate), heavy property taxes | Businesses pay a franchise (margin) tax |
| Washington | No (wages) | Sales tax (6.5% state rate), business and occupation tax | Taxes long-term capital gains above a high threshold |
| Wyoming | No | Minerals revenue, sales tax (4% state rate), property tax | Small population keeps costs low |
You can sort and compare the full list on our states with no income tax tool page. This article focuses on what changes once the income tax disappears.
What these states tax instead
A state still has to pay for roads, schools and courts. When it skips the income tax, the money comes from somewhere else. Three sources do most of the work.
Sales and excise taxes
Tennessee, Washington, Nevada, Texas and Florida lean on sales tax. Tennessee’s 7% state rate is the highest in the group, and local add-ons push combined rates well above that. Alaska and New Hampshire sit at the other end. Neither charges a general state sales tax. Use our sales tax calculator to see what a purchase costs in a specific state.
Property taxes
Texas and New Hampshire are the standard examples. Both rely heavily on property tax, so homeowners there often pay more each year than owners in states with an income tax. A buyer who ignores this can lose the entire income tax saving to a single property bill.
Business, resource and tourism taxes
Alaska and Wyoming draw heavily on oil, gas and minerals. Nevada collects from gaming and visitors. Washington taxes gross business receipts through its business and occupation tax. In each case, part of the burden lands on companies and visitors rather than on resident wage earners.
Exceptions and recent changes
Three details trip people up, so check them before you rely on an older list.
- New Hampshire. The state never taxed wages. It did tax interest and dividends until the repeal took effect for periods starting January 1, 2025. Older articles still show the old tax.
- Tennessee. The Hall tax on interest and dividends was phased out and ended for tax years beginning in 2021. If a page still lists it, the page is out of date.
- Washington. Wages are untaxed. The state does charge a 7% tax on long-term capital gains above a high annual threshold, so investors who sell large positions can owe tax there.
Residents also face the usual federal bill. Federal income tax, Social Security and Medicare apply everywhere. The 2026 federal standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly, according to the IRS.
Does no state tax mean you keep more money?
Not automatically. Compare the whole bill. A household with a modest income and modest spending can come out well ahead in Florida or Wyoming. A household that owns an expensive home in Texas may not. Consider these questions before you move.
| Question | Why it matters |
|---|---|
| How much do you earn? | The higher your wages, the more an income tax would have cost you, so the benefit grows with income. |
| Do you own or rent? | Owners feel property tax directly. Renters feel it indirectly through rent. |
| How much do you spend on taxable goods? | Heavy spenders pay more sales tax in states that rely on it. |
| Do you have large investment gains? | Washington taxes big capital gains; the other eight states do not. |
| Do you work across state lines? | You may owe income tax to the state where you work, even if you live in a no-tax state. |
Residency rules matter too. Moving your mailing address is not enough. States generally look at where you live most of the year, where your home is and where your ties are. Our state tax data sources page lists the official revenue agencies to confirm the details.
Common mistakes to avoid
- Assuming “no income tax” means “no tax.” Sales and property taxes can be heavy.
- Using an old list that still counts New Hampshire or Tennessee as taxing investment income.
- Forgetting that remote work can create a tax bill in the state of your employer or client.
- Ignoring local taxes. Cities and counties add sales tax almost everywhere.
- Skipping the Washington capital gains tax when selling stock or a business.
Related reading: our guide to the minimum wage in Florida covers pay rules in the most populous state on this list, and our state tax refund guide explains what to expect in the states that do collect income tax.
State-by-state notes
The nine states share one feature, yet they differ in almost everything else. These short profiles show how each one pays its bills.
Alaska
Alaska leans on oil and gas revenue and has no statewide sales tax. Many local governments fill the gap with their own sales or property taxes, so your city matters more than your state. Residents also receive an annual payment from the Alaska Permanent Fund, which is a separate topic from taxes.
Florida
Florida taxes spending and property. The state sales tax rate is 6%, and counties add their own surtaxes. Tourism supplies a large share of that revenue, which means visitors pay part of what residents would pay elsewhere. Florida does have a corporate income tax, so businesses are treated differently from wage earners.
Nevada
Nevada combines a 6.85% state sales tax with gaming and lodging taxes. Visitors carry a meaningful share of the load. Businesses pay a Commerce Tax and a Modified Business Tax, so owners should read the rules before they incorporate there.
New Hampshire
New Hampshire has no general sales tax and no tax on wages. Property taxes carry the system, and they sit among the higher effective rates in the country. The end of the interest and dividends tax in 2025 removed the last personal income levy.
South Dakota
South Dakota charges a 4.2% state sales tax and relies on property tax for local services. The state is also known for trust and banking laws that attract wealth management business. For ordinary wage earners, the practical result is a light state income-related burden.
Tennessee
Tennessee has the highest state sales tax rate among the nine, at 7%, and local rates raise the combined figure further. The state applies a franchise and excise tax to businesses. It stopped taxing interest and dividends for tax years beginning in 2021.
Texas
Texas charges a 6.25% state sales tax, and local governments can add up to a combined rate near 8.25%. Property taxes are the other big piece. Homeowners should budget for them, because they can exceed what an income tax would have cost a middle-income family. Businesses pay a franchise tax based on margin.
Washington
Washington charges a 6.5% state sales tax and a business and occupation tax on gross receipts. It also taxes large long-term capital gains at 7%. That makes it the one state on the list where an investor can owe a state tax on income-like gains.
Wyoming
Wyoming funds government with mineral revenue, a 4% sales tax and property tax. It has a small population and low administrative costs. Many remote workers and retirees consider it for those reasons.
A simple way to compare the tradeoffs
Take a hypothetical household with an $80,000 salary. In a state with a flat 5% income tax, the state would take about $4,000 a year. In a no-income-tax state, that $4,000 stays in the household. The same household might then pay more in sales tax or property tax. If those added taxes total $2,500, the net saving is $1,500. If they total $4,500, the household loses ground. This example is an illustration, not a forecast, and your numbers will differ.
| Your situation | Likely effect in a no-income-tax state |
|---|---|
| High salary, rents a home | Larger saving, because rent carries less direct property tax |
| Moderate salary, owns an expensive home in Texas or New Hampshire | Saving may shrink or vanish because of property tax |
| Retiree with pension and investment income | Often favorable; check Washington if you sell large holdings |
| Remote worker employed by a company in another state | May still owe income tax to the employer’s state under its rules |
| Business owner | Depends on business taxes; Nevada, Texas, Tennessee and Washington tax business activity |
Local income taxes and cross-border work
A few cities and counties in other states levy local income taxes. They are not part of the nine states above, but they affect people who move between jurisdictions. If you live in a no-tax state and commute across a state line, the state where you work may tax your wages. Many states offer credits or reciprocity agreements, which can prevent double taxation. Read the rules for both states before you accept a job over the border.
How to verify the current list
Tax law changes every year, and headlines often lag behind the statutes. Follow these steps to confirm that a state still belongs on the list.
- Open the state revenue department site and look for the personal income tax page.
- Check whether any investment income tax remains. This is how New Hampshire and Tennessee fooled many older lists.
- Review the legislative calendar for new bills. Some states debate adding income taxes or targeted taxes on high earners.
- Compare the page date to the tax year you care about.
We keep a running list of agencies on our state tax data sources page and update our tools as rules change.
Frequently asked questions
Which states have no state tax on income in 2026?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming levy no broad individual income tax on wages.
Does New Hampshire have an income tax?
No. New Hampshire never taxed wages. It also repealed its tax on interest and dividends, which ended for periods beginning January 1, 2025.
Does Washington tax capital gains?
Yes. Washington has no wage tax, but it charges a 7% tax on long-term capital gains above a high annual threshold.
Do I still pay federal income tax in a no-income-tax state?
Yes. Federal income tax, Social Security and Medicare apply in every state. Only the state income tax disappears.
Are no-income-tax states cheaper to live in?
Not always. Many make up the revenue with higher sales or property taxes. Compare your total tax bill, including housing and spending, before deciding.
Do I file a state tax return if I live in one of these states?
Usually not for wages. You may still file elsewhere if you earned income in another state or have business income that a state taxes.
Where can I confirm the current rules?
Check the state revenue department for each state. Our state tax data sources page links to the official agencies.
Not affiliated with any government agency. Information only, not tax or legal advice. Read the full disclaimer.