States With No Income Tax in 2026: 8 States and Washington Explained

Moving to a states with no income tax can help workers keep more of their earnings. But the tax advantage is only part of the financial equation. Property taxes, sales taxes, housing costs and insurance can affect how much money a household actually saves.

In 2026, eight states stand out for having no individual state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Washington is sometimes added to these lists because it does not tax wages and salaries through a general state income tax. However, the state does tax certain capital gains under a separate tax system, making its rules different from those of the eight states listed above. 

The distinction matters. A state with no individual income tax is not necessarily a state with low overall taxes or a lower cost of living. The better approach is to compare the taxes a household would actually pay, along with its expected housing and everyday expenses.

This guide from Invest Daily Times breaks down the states, explains the major tax differences and highlights what to check before making a move.

Which States Don’t Charge a State Income Tax in 2026?

The following eight states do not levy an individual income tax. Washington is included separately because its tax treatment is different.

The Tax Foundation’s 2026 fiscal policy overview identifies eight states that do not impose an individual income tax. Washington needs to be considered separately because it levies a distinct tax on certain capital gains, unlike the eight states listed above. 

1. Alaska

Alaska does not levy a state individual income tax. For people earning wages or salaries, that means the state does not take a share of those earnings through a personal income tax.

The trade-off is that some local governments impose sales taxes. The cost of transporting goods, paying for housing and covering utility bills can vary widely from one community to another. Because of these differences, a household’s total living expenses may change significantly depending on where it lives. 

Alaska may suit people whose employment, family circumstances and lifestyle make the state a practical choice. But a relocation decision should account for the full household budget, not just the absence of income tax.

2. Florida

Florida is a popular destination for people seeking a state without individual income tax. Wages and salaries are not subject to a Florida state individual income tax, although federal income tax and other applicable taxes still apply.

Housing and insurance deserve particular attention. Property taxes, homeowners insurance and the cost of living can vary substantially by location, and these expenses may offset part of the income-tax savings.

People considering Florida should compare the actual costs of the communities they are evaluating. A lower state income-tax bill is useful only if the household’s total expenses and financial priorities also make sense.

3. Nevada

Nevada does not levy an individual income tax on wages and salaries. This can be attractive to employees, independent professionals and business owners who want to avoid state personal income tax on their earnings.

However, sales taxes and housing costs still affect the budget. Expenses in Las Vegas, Reno and smaller communities may differ, so a statewide label cannot tell a household exactly how much it will save.

Before moving, compare expected housing, transport, utilities, insurance and taxable purchases. The result will provide a more realistic picture than looking at income tax alone.

4. New Hampshire

New Hampshire gives residents a tax advantage by leaving wages untaxed at the state level and ending its tax on interest and dividend earnings in 2025, making it an appealing option for workers, savers, and investors. 

Property taxes are an important consideration for homeowners. A household buying a home should compare local property-tax bills and purchase prices, while renters should assess rent and other housing costs.

New Hampshire’s lack of a general state sales tax may also matter to consumers. Even so, the overall financial outcome depends on housing, income, spending and where a household lives.

5. South Dakota

South Dakota does not impose an individual income tax. That can simplify state-level tax planning for people who earn wages or salaries.

The state still has other taxes, including sales and property taxes. How much these affect a household depends on its purchases, housing arrangements and location.

For anyone considering a move, the relevant comparison includes employment opportunities, housing costs, transportation and access to services. A state’s tax structure can be attractive without necessarily being the least expensive option for every household.

6. Tennessee

Tennessee does not levy an individual income tax on wages and salaries. The state’s former Hall Income Tax on interest and dividend income was fully repealed for tax year 2021.

Sales tax is an important part of Tennessee’s tax structure. Local taxes can increase the amount consumers pay beyond the state rate, making taxable purchases a relevant part of a household comparison.

Workers considering Tennessee should estimate the effect of sales taxes alongside housing, insurance and transport. People who spend a large share of their income on taxable goods may experience the tax structure differently from those with different spending patterns.

7. Texas

Texas has no state individual income tax on wages and salaries. For employees, this means no Texas state individual income tax is charged on those earnings.

Property taxes deserve particular attention, especially for homeowners. The actual bill depends on the property’s taxable value, local tax rates and exemptions for which the owner qualifies. Sales taxes can also affect household spending.

Texas is large and economically diverse, and housing costs vary widely by city and region. Someone comparing Texas with another state should estimate property taxes, housing, utilities and commuting costs rather than assume that every household will benefit equally.

For people evaluating a home purchase or rental property, our real estate investment resources offer additional context for assessing property-related financial decisions.

8. Wyoming

Wyoming does not levy an individual income tax. Residents may still pay sales taxes and property taxes, depending on their circumstances.

The practical benefit depends on more than the tax rate. Housing, employment, transportation and access to services can affect the total cost of living, especially for people moving from a larger metropolitan area.

Wyoming may be worth considering for people whose work and lifestyle fit the state. Before deciding, compare the likely annual tax bill and living costs with those in your current location.

What About Washington?

Washington is often counted among states with no income tax because its current system does not impose a general individual income tax on wages and salaries. However, it taxes certain capital gains under a separate tax system.

Capital gains generally arise when an asset is sold for more than its tax basis. They are different from ordinary wages earned through employment. The tax treatment depends on the asset, the amount of taxable gains, applicable exemptions and the rules for the relevant tax year.

Washington has also enacted a separate high-income tax scheduled to take effect on January 1, 2028. Because the rules and implementation details may change, people planning a move or evaluating future tax liability should consult the Washington Department of Revenue and the relevant enacted legislation for current guidance.

The takeaway is straightforward: Washington should not be described as identical to the eight states that levy no individual income tax at all. Its treatment of wages, capital gains and future high-income taxation is different.

No Income Tax Does Not Mean No Taxes

States raise revenue in different ways. When a state does not levy individual income tax, other taxes and fees can still have a meaningful effect on household finances.

Sales taxes

Sales tax affects the cost of taxable purchases, and the amount charged may depend on both state and local rules.

Alaska and New Hampshire stand apart for shoppers: neither imposes a general statewide sales tax, although local rules can still affect what customers pay in Alaska. The other six states collect statewide sales tax, and additional local charges may push the final rate higher.

The Tax Foundation’s nationwide comparison outlines state-level sales tax rates and explains how local taxes can affect the final amount. Before making a major purchase or planning a move, check the applicable rules for the specific city or county. 

Property taxes

Property taxes can make a significant difference for homeowners. The bill generally depends on the property’s taxable value, local rates and available exemptions.

The Tax Foundation’s comparison based on 2024 American Community Survey data reported the following effective property-tax rates for owner-occupied housing value:

These figures are historical statewide estimates based on 2024 data, not guaranteed 2026 rates for a particular home. Actual property-tax bills vary by location and property. The underlying comparison is available in the Tax Foundation’s property-tax analysis.

The figures also illustrate why a state’s income-tax policy should not be used as a complete measure of its tax burden. A homeowner’s property-tax bill can materially change the comparison between two locations.

Federal income taxes

Moving to a state with no individual income tax does not eliminate federal income tax. Federal rules still apply to taxable income, subject to the relevant deductions, credits and exclusions.

That distinction is important when estimating the benefit of moving. A state’s zero individual income-tax rate describes only one part of a household’s tax obligations.

For federal filing rules and current tax guidance, consult the Internal Revenue Service.

How to Compare the Financial Benefit Before Moving

A useful comparison starts with the household’s actual circumstances rather than a ranking of states.

Estimate the income-tax difference. Compare what you currently pay in state individual income tax with what you would expect to pay under the destination state’s rules. Account for the type of income you receive and any relevant residency requirements.

Compare housing costs. Rent, mortgage payments, property taxes, insurance and maintenance can outweigh tax savings in some circumstances. Homeowners should use local property-tax information rather than statewide averages alone.

Account for everyday spending. Sales taxes, utilities, transport, groceries and other recurring costs influence how much money remains at the end of the month.

Check employment and residency rules. A move may affect wages, commuting costs, remote-work arrangements and state tax residency. Do not assume that spending time in a state automatically changes your tax obligations.

Build a full-year budget. Compare expected annual income, taxes and living expenses in both locations. Explore our personal finance tips and financial planning advice to organize your budget and evaluate how the decision fits your wider financial goals. 

FAQs

1. How many states have no individual income tax in 2026?

Eight: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming.

2. Does Washington State Have an Income Tax?

Washington has no general tax on wages under its current system, but it taxes certain capital gains and has enacted a separate high-income tax scheduled for 2028.

3. Which no-income-tax states have no statewide sales tax?

Alaska and New Hampshire. Alaska’s local governments may still charge sales tax.

4. Which no-income-tax state has the highest property tax?

Among the eight states in the comparison, New Hampshire had the highest effective property-tax rate in the cited 2024 data, at 1.50%.

5. Do residents of no-income-tax states still pay federal income tax?

Yes. Federal income tax rules still apply, depending on taxable income, deductions and credits.

6. Does moving to a no-income-tax state automatically reduce taxes?

No. Property taxes, sales taxes, housing costs and other expenses can offset income-tax savings.

The Bottom Line

Eight states levy no individual income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Washington is often included in broader lists, but its capital-gains tax and enacted future high-income tax mean its rules should be considered separately.

The best state for a household depends on the complete financial picture. Income-tax savings matter, but so do property taxes, sales taxes, housing, insurance, employment and everyday expenses. Comparing those costs using current local information is a more reliable way to judge whether a move would leave you financially better off.

Disclaimer: This article provides general information, not personalized tax, legal, or financial guidance. Tax laws and regulations may change, so confirm the latest rules with the relevant state tax authority or a licensed professional before making decisions about relocating or managing your finances.