'No income tax' is one of the most persuasive phrases in American relocation. But a state still has to fund roads, schools, and services — so the tax burden doesn't vanish, it moves. Here's the honest accounting behind the headline.
The nine states
- Alaska
- Florida
- Nevada
- New Hampshire (no wage tax; taxes some investment income)
- South Dakota
- Tennessee
- Texas
- Washington (taxes some capital gains)
- Wyoming
Where the money comes from instead
To replace income-tax revenue, these states typically lean on:
| Lever | Examples |
|---|---|
| Higher sales tax | Tennessee, Washington combined rates run high |
| Higher property tax | Texas property taxes are well above average |
| Tourism & resource revenue | Nevada (gaming), Alaska (oil) |
See how sales tax stacks in our sales tax guide.
Does moving actually pay off?
Sometimes — especially for high earners whose income tax would be large. But for many households, higher property or sales taxes, insurance, and cost of living eat into the savings. Model your total tax and living costs, not just the income-tax headline. Estimate the take-home side with our paycheck calculator.
Frequently asked questions
Which states have no income tax?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes some investment income but not wages.
Is it cheaper to live in a no-income-tax state?
Not always. These states often have higher sales or property taxes, and cost of living varies. Run the full picture, not just the income-tax line.