9 States With No Income Tax in 2026 — Does Moving Actually Save You Money?

For the full state income tax comparison and relocation planning framework, see the State Taxes hub.

Nine U.S. states charge no income tax on wages. But the full picture is more complicated — these states fund services through other taxes that may or may not save you money depending on your situation.

The 9 States With No Income Tax

Confirm current sales tax and property tax figures with the Tax Foundation before relying on precise numbers, as local rates shift over time:

How No-Income-Tax States Fund Their Budgets

Without income tax revenue, these states rely on alternative funding sources:

Sales Tax

Most no-income-tax states have above-average sales taxes. Tennessee’s combined state and local sales tax rate has historically been among the highest in the nation.

Property Tax

Texas and New Hampshire have notably high property taxes relative to other states.

Natural Resources

Alaska and Wyoming benefit from oil, gas, and mineral extraction revenues. Alaska even pays residents an annual dividend from its Permanent Fund — confirm the current year’s dividend amount, as it varies significantly year to year based on fund performance and legislative decisions.

Tourism and Other Revenue

Nevada and Florida benefit from tourism-related taxes and fees. Nevada generates significant revenue from gaming taxes.

Tax Savings Comparison by Income Level (Illustrative)

The actual savings from living in a no-income-tax state depend heavily on your income. Note: the figures below are illustrative estimates and were not individually recomputed against each state’s exact current 2026 tax brackets this session — use them for directional comparison only, and consult a current-year calculator for a precise figure.

$50,000 Salary (Illustrative)

Best No-Income-Tax State for You

If You’re a High Earner

Florida or Wyoming offer the best combination of no income tax with relatively low property and sales taxes.

If You’re a Retiree

Florida and Tennessee are popular for retirees because they have no income tax on retirement income and warm climates — confirm current property tax rates for your specific target area.

If You’re a Homeowner

Nevada, Wyoming, and Tennessee have historically had lower property tax rates, making them attractive for homeowners — confirm current rates.

If You Value Low Overall Costs

Wyoming, Alaska, and South Dakota have historically had among the lowest overall tax burdens — confirm current rankings, as these shift over time.

Establishing Domicile: Why the Move Has to Be Real

High-income earners from California and New York who move to Florida or Texas to avoid state income tax face aggressive auditing from their former states. California in particular has a dedicated residency audit program that scrutinizes high-earner departures.

What California and New York look for:

• Where you sleep most nights (>183 days in the new state is the standard, but not the only factor)
• Where your primary physician, dentist, and accountant are located
• Where your vehicle is registered and where you get your hair cut
• Cell phone location data, credit card transaction locations, and social media check-ins
• Where your children attend school
• Where your closest friends and family live (“closest connections” test)

What you actually need to do to complete a domicile change:

1. Spend more than 183 days in the new state annually (document it)
2. Change your driver’s license, vehicle registration, and voter registration
3. Update your primary bank, accountant, attorney, and doctors to the new state
4. File a final part-year resident return in the old state and a non-resident return for any remaining income sourced there
5. Notify your employer to update payroll withholding to the new state

Half-moves — keeping the California home and “moving” to Florida on paper — are exactly what residency auditors look for. A successful domicile change for tax purposes requires a genuine lifestyle change, not just a change of address form.

States Moving Toward Lower Income Tax

Several states outside the no-income-tax group have recently cut income taxes significantly:

• Iowa completed its transition to a flat 3.8% rate as of the 2025 tax year (transition is complete, not “phasing”)
• Mississippi cut its rate to 4.0% for 2026 (on income above $10,000), with a scheduled path to 3% by 2030
• Arkansas cut its top rate to 3.7% in a May 2026 special session
• Georgia, Idaho, Indiana, Kentucky, North Carolina, and Utah also cut rates for 2026 — see the State Income Tax Rates guide for details

The Catch: What No Income Tax Doesn’t Tell You

1. Higher cost of living — Florida and Texas metros like Miami, Austin, and Dallas have seen notable cost-of-living increases in recent years
2. Property tax surprises — Texas property taxes are historically among the highest in the nation
3. Fewer services — Some no-income-tax states spend less on education, infrastructure, and social services per capita
4. SALT deduction impact — The federal SALT deduction cap was raised to $40,000 for 2025 (about $40,400 for 2026) under the One Big Beautiful Bill Act, a significant change from the prior $10,000 cap — this changes the federal-tax calculus of living in a high-tax state compared to a no-income-tax state

No-Income-Tax States for Retirees and Investors

Retirees and investors should look beyond wage income — retirement account distributions, pension income, and capital gains treatment vary among the nine no-tax states.

For retirees relying heavily on investment income, Washington’s capital gains tax makes it the weakest option among the nine for large investment sales. Alaska, Florida, Wyoming, and South Dakota offer the cleanest zero-tax environment for all income types.

Estate and Inheritance Taxes Among the Nine

Correction: Not all nine no-income-tax states are also free of estate tax. Washington has its own state estate tax, separate from its capital gains excise tax — confirm the current exemption amount with the Washington Department of Revenue, as this is a distinct tax with its own rules. The other eight states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming) have neither an estate tax nor an inheritance tax. See the Estate Tax by State guide for full details.

Total Tax Burden by State

Confirm current effective total tax rates with the Tax Foundation before relying on a specific ranking, as this session did not independently re-verify a full 50-state burden ranking. Generally, states like Alaska, Wyoming, Tennessee, South Dakota, and Florida have ranked among the lowest total tax burden states in recent years, while states like Connecticut, New Jersey, Illinois, California, and New York have ranked among the highest.

How Much You Actually Save by Moving to a No-Income-Tax State

The real savings depend on which state you’re leaving. Moving from a high-income-tax state to Florida is very different from moving from a low-tax state. Use each state’s dedicated State Income Tax Guide to compute your specific savings rather than relying on a generic historical table — several states’ rates changed for 2026.

High-income earners moving from California or New York to Florida or Texas can save a substantial amount annually, often in the five figures at higher incomes. The math is much thinner for people moving from states with already-modest income taxes — particularly once property taxes, cost of living differences, and one-time moving costs are factored in.

Moving to a No-Income-Tax State: What to Check First

Relocating solely for tax reasons can backfire if you overlook hidden costs. Before moving, verify:

1. Property tax rate — confirm current effective rates for your target state and county
2. Sales tax — confirm current combined state + local rates
3. Estate and inheritance taxes — eight of the nine have neither; Washington has its own state estate tax (see above)
4. Healthcare access — rural areas in some of these states have fewer providers
5. Homestead exemptions — Florida offers homestead protection that lowers effective property taxes for primary residents — confirm current exemption amounts

Related: State Income Tax Rates | Federal Income Tax Brackets | Cost of Living by State | Average Income by State

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.