No Income Tax States 2026: Save $8,400 or Pay More Overall?
Maria Chen sat at her kitchen table in Chicago on , holding two job offer letters — one in Austin, Texas, another in Denver, Colorado. Running the numbers, she realized that Texas’s zero state income tax rate would put roughly $8,400 more in her pocket each year on her $105,000 salary.
That savings is real. But Maria’s story doesn’t end with the income tax calculation. Property taxes, sales taxes, and higher housing costs in many no-income-tax states can quietly chip away at that advantage. This guide covers all nine states with no income tax in 2026, what the exemption actually covers, and the hidden costs you need to price in before packing a moving truck.
KEY TAKEAWAY: Nine states levy zero state income tax in 2026, but residents often face higher property taxes, steep sales taxes, and elevated home prices that can offset thousands in annual savings — run the full cost comparison before relocating.
2026 No-Income-Tax States: By the Numbers
9
States with zero state income tax
$8,400
Est. savings on $105K salary (TX)
1.60%
Texas effective property tax rate
7%
Tennessee’s combined state sales tax
The 9 States With No Income Tax in 2026: The Complete List
The states without income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Each reached this status through different paths — Alaska funds government via oil revenue, Wyoming relies on mineral extraction taxes, and Nevada leans heavily on casino and resort taxes.
Two nuances matter for 2026. New Hampshire historically taxed interest and dividend income at 3%, but that tax expired on , making it fully income-tax-free this year. Washington State imposes a 7% capital gains tax on gains above $262,000 — so high earners are not entirely tax-free there.
Nine states levy zero state income tax in 2026. These include Texas, Florida, Nevada, Washington, Wyoming, South Dakota, Alaska, Tennessee, and New Hampshire. Each state funds government services through alternative revenue sources.
Q: How much can I save by moving to a no-income-tax state?
Savings vary by income. On a $105,000 salary, moving to Texas could put roughly $8,400 more in your pocket annually compared to a high-tax state like Illinois. However, other costs can offset this advantage.
Q: Do no-income-tax states have other hidden costs?
Yes. States without income tax often compensate with higher property taxes, steeper sales taxes, and elevated home prices. Running a full cost-of-living comparison before relocating is essential to determine your true financial benefit.
Q: Is Texas or Florida cheaper to live in with no income tax?
Both Texas and Florida have no state income tax, but Texas tends to have significantly higher property taxes while Florida has relatively moderate property taxes. Local sales tax rates and housing costs also differ considerably between the two states.
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