Are you seriously considering moving to a no-income-tax state — and wondering if you’re actually going to save money, or just trade one bill for three others?
I moved from Illinois to Tennessee in , chasing exactly that promise. Illinois taxed my income at a flat 4.95%. Tennessee had zero state income tax. On paper, I’d save roughly $3,465 a year on a $70,000 salary. What I didn’t calculate fast enough: Tennessee’s 7% state sales tax — the highest base rate in the country — quietly clawed back a meaningful chunk of that savings every single month.
That experience is what this guide is built on. Below, you’ll find exactly which nine states charge no personal income tax in 2026, what the real hidden costs are in four of them, and how to run the numbers before you pack a single box.
What You’ll Learn in This Guide
- The exact 9 states with zero personal income tax in 2026
- 4 of those states that carry significant hidden financial costs
- How to calculate your actual net savings before relocating
- Which state combination delivers the lowest total tax burden
- FAQ answers on Social Security, capital gains, and property tax traps
Prerequisites: What You Need Before Running the Numbers
Read more: Tax Brackets 2026: Federal Income Tax Rates
Before comparing states, gather three things. First, your most recent federal adjusted gross income (AGI). Second, your current state’s effective tax rate — not the marginal rate, the effective one. Third, a rough estimate of your annual spending on taxable goods, since sales tax hits every grocery run and hardware store visit.
Your 2025 tax year covered a 12-month period. You had no tax liability for 2025 if your total tax was zero or you didn’t have to file an income tax return. That baseline matters because some people relocating in their first retirement year genuinely owe nothing federally — and a no-income-tax state stacks on top of that.
You’ll also want to check local county and municipal tax rates. Several no-income-tax states allow cities to impose their own levies that the state headline number doesn’t capture.
The Complete 9 States With No Income Tax in 2026
Read more: Live on $1,814/Month: The Cheapest U.S. States in 2026
These nine states impose no broad-based personal income tax. Some have narrow carve-outs — New Hampshire still taxes certain investment income on a transitional basis — but wages and salaries face zero state income tax in all nine.
| State | Income Tax Rate | State Sales Tax | Avg. Effective Property Tax | Hidden Cost Flag |
|---|---|---|---|---|
| Alaska | 0% | 0% state (local up to 7.5%) | ~1.04% | High cost of living |
| Florida | 0% | 6% | ~0.89% | Insurance costs surging |
| Nevada | 0% | 6.85% | ~0.55% | Hidden costs — see below |
| New Hampshire | 0% on wages (investment income phase-out ongoing) | 0% | ~1.93% | Hidden costs — see below |
| South Dakota | 0% | 4.2% | ~1.08% | Lowest overall burden |
| Tennessee | 0% | 7% | ~0.56% | Hidden costs — see below |
| Texas | 0% | 6.25% | ~1.60% | Hidden costs — see below |
| Washington | 0% on wages (7% capital gains tax above $262K) | 6.5% | ~0.84% | Cap gains trap for investors |
| Wyoming | 0% | 4% | ~0.56% | Lowest overall burden |
Sources: Tax Foundation, state revenue department schedules. Property tax rates are statewide averages; your county rate will vary.
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Frequently Asked Questions
Read more: 2026 Federal Tax Brackets: What You Actually Pay at $75K
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