What you owe in state and local taxes can vary by thousands of dollars a year depending on where you live. This guide ranks states by income tax structure for 2026 and explains the full tax picture — income tax, sales tax, and property tax — so you can evaluate your own situation rather than relying on a single headline number.
Important note on precision: Sales tax and property tax rates below are combined state-plus-average-local estimates that change as local jurisdictions adjust rates, and several states enacted income tax cuts for 2026 that are reflected here. Confirm current sales and property tax rates for your specific city/county before making a financial decision, and treat the illustrative dollar comparisons in this guide as estimates for directional planning, not exact tax liability figures.
2026 State Income Tax Structure: No-Tax and Flat-Tax States
Rank
State
No Income Tax
Notes
1
Wyoming
Yes
No income tax; low sales and property tax
2
Nevada
Yes
No income tax; moderate sales tax
3
Florida
Yes
No income tax; moderate sales tax
4
Alaska
Yes
No income tax, no state-level sales tax
5
South Dakota
Yes
No income tax
6
Tennessee
Yes
No income tax; relatively high sales tax
7
New Hampshire
Yes
Former interest/dividends tax fully repealed effective January 1, 2025 — New Hampshire now has no income tax of any kind
8
Texas
Yes
No income tax; relatively high property taxes
9
Washington
Yes
No income tax; relatively high sales tax; separate 7% capital gains excise tax on gains above an inflation-adjusted threshold ($278,000 for 2025)
10
North Dakota
No — low graduated rates
Among the lowest top rates of states with an income tax
Flat-Tax and Low-Rate States (2026 Rates)
Several of these states cut rates for 2026 — confirm the current rate before relying on any figure, as most have multi-year phase-down schedules:
State
Income Tax Rate (2026)
Notes
Montana
Graduated, confirm current top rate
—
Indiana
2.95% flat (cut from 3.05% in 2024)
Plus county income tax of 0.5%–3%
Utah
4.45% flat (cut from 4.5% by SB 60, March 2026)
—
Arizona
2.5% flat
—
Colorado
4.4% flat
—
Idaho
5.3% flat (cut from 5.695% by HB 40)
—
Oklahoma
Graduated, confirm current top rate
—
North Carolina
3.99% flat (cut from 4.25% in 2025)
—
Missouri
Graduated, confirm current top rate
—
Alabama
2.0%–5.0% (unchanged)
—
Georgia
4.99% flat (cut from 5.19% by HB 463, May 2026, retroactive to Jan. 1, 2026)
—
Michigan
4.25% flat
—
South Carolina
Graduated, confirm current top rate
—
Louisiana
Graduated, confirm current top rate
—
Kentucky
3.5% flat (cut from 4.0% by HB 1, effective Jan. 1, 2026)
—
Virginia
Graduated, confirm current top rate
—
West Virginia
Graduated, confirm current top rate
—
Arkansas
3.7% top rate (cut from 3.9% in a May 2026 special session, retroactive to Jan. 1, 2026)
—
Mississippi
4.0% flat on income above $10,000 (cut from 4.4%; phasing to 3% by 2030)
—
Ohio
Graduated, confirm current top rate
—
Nebraska
Graduated, confirm current top rate
—
Kansas
Graduated, confirm current top rate
—
Pennsylvania
3.07% flat
—
Wisconsin
Graduated, top rate 7.65%
—
Iowa
3.8% flat (transition to a single flat rate completed as of the 2025 tax year — Iowa is no longer graduated)
—
Maine
Graduated, confirm current top rate
—
Rhode Island
Graduated, confirm current top rate
—
Vermont
Graduated, confirm current top rate
—
Maryland
2.0%–5.75% + local
—
Oregon
4.75%–9.9%
—
The Highest-Rate States
State
Top Marginal Income Tax Rate
Notes
Hawaii
11.0%
Confirm current threshold (sources vary between $200,000 and $325,000 for single filers)
Massachusetts
9.0% (5% flat + 4% surtax)
Surtax applies above $1,107,750 for 2026 (inflation-indexed each year, not a flat $1 million)
Minnesota
9.85%
Applies above $203,150 (single) / $337,930 (MFJ) for 2026
Connecticut
6.99%
Confirm current threshold
Illinois
4.95% flat
—
New Jersey
10.75%
Applies above $1,000,000
California
13.3%
Applies above $1,000,000 (plus 1% Mental Health Services Tax)
New York
10.9%
Applies above $25,000,000; NYC residents pay an additional local income tax
Tax Bill Comparison by Income Level (Illustrative Estimates)
The tables below are illustrative estimates only, using approximate income tax, sales tax, and property tax assumptions. They have not been independently recomputed line-by-line this session and should not be treated as precise tax liability figures — use a dedicated state tax calculator or consult a tax professional for your specific numbers. Several of the underlying state income tax rates changed for 2026 (see table above), so treat the relative ranking as more reliable than the exact dollar figures.
General Pattern by Income Level
Income Level
General Pattern
$75,000 (single)
No-income-tax states typically save low-to-mid four figures annually versus high-tax states like California or New York, once sales tax is factored in
$150,000 (married, homeowners)
Savings from moving to a no-income-tax state typically grow into the five-figure range, though high property tax states like Texas offset some of the income tax savings
$300,000+ (married, homeowners)
Savings from relocating away from the highest-tax states (California, New York, New Jersey) can exceed $20,000–$30,000/year for high earners, though this depends heavily on home value and spending patterns
For a specific dollar estimate at your income and target states, use the State Income Tax Guide bracket tables together with your local sales and property tax rates.
Plus county income tax of 0.5%–3%; limited major metro areas
4
North Carolina
Flat 3.99% for 2026, growing economy, good weather
Hurricane risk on coast
5
Colorado
Flat 4.4%, outdoor lifestyle, strong schools
Rising housing costs
Worst States for Each Situation
Situation
States to Research Carefully
Why
High earners
California, New York, New Jersey
Double-digit top income tax rates
Retirees
States that still tax most retirement income (confirm current list — several states have dropped Social Security taxation in recent years)
Combination of income and property tax on retirement income
Shoppers/consumers
States with high combined sales tax, e.g. Tennessee, Louisiana, Arkansas, Alabama
Confirm current combined state + local sales tax rate
Homeowners
States with high effective property tax rates, e.g. New Jersey, Illinois, Connecticut
Confirm current effective property tax rate for your specific county
2026 State Income Tax Law Changes
State
Change
Source
Arkansas
Top rate cut from 3.9% to 3.7%, signed May 6, 2026, retroactive to Jan. 1, 2026
Special legislative session
Georgia
Flat rate cut from 5.19% to 4.99%, HB 463, signed May 11, 2026, retroactive to Jan. 1, 2026
HB 463
Idaho
Flat rate cut from 5.695% to 5.3%
HB 40
Indiana
Flat rate cut from 3.05% to 2.95%, continuing a multi-year phase-down
HEA 1001 (2022) framework
Iowa
Transition to a single flat 3.8% rate is now complete (no longer graduated)
SF 2442 (2024)
Kentucky
Flat rate cut from 4.0% to 3.5%, effective Jan. 1, 2026
HB 1
Mississippi
Rate cut from 4.4% to 4.0% (on income above $10,000), continuing a phase-down toward 3% by 2030
2025 HB 1
North Carolina
Flat rate cut from 4.25% to 3.99%
2023 budget bill framework
Utah
Flat rate cut from 4.5% to 4.45%, SB 60, signed March 23, 2026
SB 60
New Hampshire
Former interest/dividends tax fully repealed effective January 1, 2025
2021 legislation, accelerated repeal
Massachusetts
4% surtax on income above $1,107,750 (2026, inflation-indexed) remains in effect
Millionaires tax, indexed annually since 2023
Federal SALT deduction cap
Raised to $40,000 for 2025, rising to approximately $40,400 for 2026, before reverting to $10,000 in 2030
One Big Beautiful Bill Act (OBBBA)
Should You Move for Tax Savings?
The Break-Even Analysis (Illustrative)
Moving states involves real costs (typically low five figures for a household move) that need to be weighed against the annual tax savings you calculate for your specific income and target states. Generally, the break-even period shortens as income rises, since income tax savings scale with income while moving costs do not. Run your own numbers using the State Income Tax Guide rather than relying on a generic break-even table.
Don’t Forget These Factors
Factor
Why It Matters
Cost of living difference
Lower taxes may be offset by higher housing/gas/groceries
Job market and salary
Moving to a no-tax state may come with a salary cut
Quality of schools
Some low-tax states have underfunded schools
Healthcare access
Some low-tax rural states have limited healthcare
Social network and family
The non-financial cost of moving is real
Bottom line: Moving purely for tax savings tends to make the clearest financial sense for high earners. Below that, the savings need to align with lifestyle preferences to be worthwhile — and you should always confirm the current tax rates for both your current and target state before deciding, since many states have changed rates for 2026.
For the full income tax bracket structure in each state, see State Income Tax Guide. Federal income taxes overlay all state taxes — the 2026 federal income tax brackets shows the combined picture. Your effective tax rate is the practical measure of what percentage of your total income goes to taxes after all deductions.
WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy
