US states with no income tax: What to know

Compare US states with no income tax, with the budget, lifestyle, and residency tradeoffs that matter before you move.

This guide is for expats, foreign nationals, and mobile US residents who want the nine-state list, the real cost picture, and a practical look at moving money into the US.

Note: Information checked on July 27, 2026. This article is for general information only and is not tax or legal advice.

Key takeaways

• Nine US states do not levy personal state income tax.
• That does not remove federal tax, and it does not mean the state is low tax overall.
• The main tradeoffs usually show up in sales tax, property tax, housing, insurance, and local fees.
• Washington needs extra care because some capital gains may still be taxed at the state level.
• The best state for tax savings depends on whether you rent, buy, work remotely, retire, or move from abroad.

Which states have no state income tax?

The nine states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. They still raise revenue in other ways, so do not treat them as fully tax-free states.

What “no state income tax” actually means

No state income tax means a state does not charge personal income tax on wages or most ordinary earned income. It does not cancel federal income tax, payroll tax, sales tax, property tax, or other state and local charges.

🌐 For international readers, this is where the broader US tax system matters.

A common question is whether states without income tax are automatically cheaper. The answer usually depends on your spending pattern, housing choice, and whether you keep tax ties somewhere else.

• Compare federal, state, and local taxes, not just paycheck withholding.
• Check sales tax rules on the goods and services you use most.
• Review county property tax tools and real insurance quotes before buying a home.
• Verify current rules on official state sites, which you can find through the Federation of Tax Administrators.

The 9 states with no income tax at a glance

New Hampshire stands out because it also has no general sales tax, while Texas and New Hampshire often put more pressure on homeowners through property tax.

Washington also stands out because its capital gains tax adds complexity and may mean tax is still owed on some income types. Check the current rule before making plans.

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Where the tax tradeoffs show up

The key question is total tax burden, not only income tax.

Sales tax and everyday costs

Sales tax affects what you spend after you arrive, which is why states without income tax can still feel expensive for some households. This matters most if you buy a lot of taxable goods, drive often, or live in an area where local rates stack on top of the state rate.

• Renters may notice sales tax more than property tax.
• Families buying furniture, appliances, and school items may feel the difference faster.
• Grocery, transit, and service tax rules vary, so verify what is taxable locally.

Property tax, housing, and insurance

Homeowners often feel the tradeoff through annual property tax bills, home prices, and insurance premiums rather than through paycheck withholding. One thing worth knowing is that county rules, storm risk, and local housing demand can change the outcome more than a statewide average ever will.

• Set a realistic budget before you choose a home.
• Check the county assessor site before you buy.
• Get real insurance quotes for the ZIP code, not a national average.

How to choose the right state for your situation

There is no single best state for tax savings, because the right fit depends on how you earn, spend, and plan to live.

If you earn wages or work remotely

If you earn a salary, the upside of no state income tax can look strong on paper, but rent, commuting, and insurance may shrink the real benefit. Before you sign a lease or accept a role, compare:

• Net pay after federal withholding and payroll taxes.
• Housing, commute, and utility costs in the exact city.
• Whether you expect to rent for a while or buy quickly.

If you are retired, investing, or moving from abroad

Retirees, investors, and foreign nationals need a wider checklist. Washington state taxes deserve special attention if you realize capital gains, and anyone moving from abroad should compare healthcare access, housing, and how easy it is to establish clean residency records.

• Check how retirement income, investment gains, and local living costs interact.
• Compare healthcare networks and travel links, especially in less dense states.

Writer

Claire Millard

Insider tip

In no-income-tax states, the biggest surprise is often local housing and insurance costs, so compare county tax tools and real quotes before assuming Texas or Florida – or any other state – will be the cheapest.

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How changing state residency can affect your tax bill

1. Document your move date, address change, lease or home purchase, and when you actually began living in the new state.
2. Update practical ties such as your driver’s license, voter registration, vehicle registration, employer records, and mailing address.
3. Expect part-year filing if you moved during the year, because more than one state may still have a claim on part of your income.
4. Reduce old ties where possible, because keeping a home, job connection, or other strong links to your previous state can complicate your domicile for tax purposes.

A common question is whether moving automatically changes tax residency. It may not. Residency and domicile can depend on timing, intent, and how connected you remain to the state you leave behind, so verify the current rule with the relevant state tax authority or a qualified tax professional before you file.

Managing relocation money across borders and between states

Moving costs rarely arrive one at a time. You may need to send savings from abroad, pay a rental deposit, cover utilities, and keep cash ready for temporary housing.

If you’re relocating to the US from overseas, Wise can be useful if you want to hold and convert money for relocation costs before you settle. Add money to your Wise account in your preferred currency and convert to USD before you need to pay bills.

40+ currencies are supported for holding and exchange, and you can also use your account to receive payments in 20+ currencies to allow you to get paid from abroad when you need to.

Wise international money transfers can also help when you need to send a deposit or living costs to the US before you move. Transfer from 160+ countries, with mid-market exchange rates and low, transparent fees.

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FAQs

Is living in a no-income-tax state always cheaper?

Not necessarily. Sales tax, property tax, insurance, housing costs, and local fees can offset the benefit, which is why two people can have very different costs of living in the same state.

Does Washington state still tax some investment income?

It can, which is why Washington needs extra care in this comparison. Verify the current rule, threshold, and exemptions on the Washington Department of Revenue before you assume all state-level tax on investment gains is zero.

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How do you prove you changed state residency for tax purposes?

Keep a clear file with your move date, new address, driver’s license, voter registration, lease or purchase records, and any part-year return. Exact proof rules depend on the states involved, so check both sides of the move if you are unsure.

Useful resources

Last checked 27th July 2026

• Internal Revenue Service federal income tax rates and brackets
• Federation of Tax Administrators directory
• Washington Department of Revenue capital gains tax page