States Without Income Tax
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9 States with No Income Tax

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Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don’t tax earned income, period. – for any residents. For retirees, in particular, that means no state income tax on Social Security benefits, withdrawals from IRAs and 401(k)s, and payouts from pensions.

Be advised, though, that states still have to pay for roads and schools, so other taxes may be higher. New Hampshire, for example, has some of the highest property taxes in the U.S. In addition, New Hampshire and Tennessee tax some dividends and interest, although Tennessee plans to phase out its tax by 2021.

See Also: Cheapest Places Where You Will Really Want to Retire

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Sales tax values are for 2019 and were compiled by the Tax Foundation. Income tax brackets are for the 2018 tax year. Property tax data is from 2017. More about our methodology here.

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States Without Income Tax | Slide 2 of 10

Alaska

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State Income Taxes: None.

Sales Tax: Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can go as high as 7.5%. But, the statewide average is only 1.76%, according to the Tax Foundation..

Property Taxes: In Alaska, residents pay an average of $1,234 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

SEE ALSO: 20 Most Expensive U.S. Cities to Live In

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States Without Income Tax | Slide 3 of 10

Florida

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State Income Taxes: None.

Sales Tax: 6% state levy. Localities can add as much as 2.5%, and the average combined rate is 7.05%, according to the Tax Foundation.

Property Taxes: In Florida, residents pay an average of $1,041 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

SEE ALSO: The 10 Least Tax-Friendly States in the U.S.

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States Without Income Tax | Slide 4 of 10

Nevada

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State Income Taxes: None.

Sales Tax: 5.5% state levy. Localities can add as much as 1.42%, and the average combined rate is 8.14%, according to the Tax Foundation.

Property Taxes: In Nevada, residents pay an average of $693 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

See Also: Where to Retire: All 50 States Ranked for Retirement

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States Without Income Tax | Slide 5 of 10

New Hampshire

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State Income Taxes: New Hampshire doesn’t tax earned income. But there is a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers).

Sales Tax: New Hampshire has no sales tax whatsoever.

Property Taxes: In New Hampshire, residents pay an average of $2,296 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

SEE ALSO: State-by-State Guide to Taxes

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States Without Income Tax | Slide 6 of 10

South Dakota

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State Income Taxes: None.

Sales Tax: 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.40%, according to the Tax Foundation. Many services are taxed, as is food.

Property Taxes: In South Dakota, residents pay an average of $1,388 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

SEE ALSO: Retiree Tax Map

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States Without Income Tax | Slide 7 of 10

Tennessee

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State Income Taxes: There’s no tax on earned income. But Tennessee does have the Hall Tax, which taxes dividends and some interest at 3% (in 2018). The first $1,250 in taxable income for individuals ($2,500 for joint filers) is exempt. The rate is declining 1% a year and will be phased out entirely by 2021.

Sales Tax: 7% state levy. Localities can add up to 2.75%, with an average combined rate of 9.47%, according to the Tax Foundation. Groceries are taxed at 4% by the state, plus whatever local rate is in effect. Local taxes are limited, though: Only the first $1,600 of any item is taxable.

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Property Taxes: In Tennessee, residents pay an average of $768 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

SEE ALSO: 10 States With the Highest Gas Taxes

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States Without Income Tax | Slide 8 of 10

Texas

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State Income Taxes: None.

Sales Tax: 7% state levy. Localities can add up to 2%, with an average combined rate of 8.19%, according to the Tax Foundation.

Property Taxes: In Texas, residents pay an average of $1,993 in taxes per $100,000 of assessed home value.

SEE ALSO: The 10 Most Tax-Friendly States in the U.S.

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States Without Income Tax | Slide 9 of 10

Washington

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State Income Taxes: None.

Sales Tax: 6% state levy. Municipalities can add up to 3.4% to that, with the average combined rate at 9.21%, according to the Tax Foundation.

Property Taxes: In Washington, residents pay an average of $1,125 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: An estate tax is imposed on estates exceeding $2.193 million. Rates range from 10% to 20%. Washington offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million. There is no inheritance tax.

SEE ALSO: 25 Cheapest U.S. Cities to Live In

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States Without Income Tax | Slide 10 of 10

Wyoming

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State Income Taxes: None.

Sales Tax: 4.5% state levy. Localities can add as much as 2.0%, and the average combined rate is 5.32%, according to the Tax Foundation.

Property Taxes: In Wyoming, residents pay an average of $635 in taxes per $100,000 of assessed home value.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

See Also: 13 Reasons You'll Regret an RV in Retirement

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