9 States with No Income Tax
Your hard-earned money is safe from state income tax if you live in one of these states…but watch out for other state and local taxes.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

You hate paying income taxes – right? So why not move to one of the nine states listed below that don't have an income tax? Your paycheck will be bigger, and that's one less tax form you have to worry about each year. If you're retired, that also means no tax on your Social Security benefits, withdrawals from your IRA or 401(k) plan, and payouts from your pension. How's that sound?
But, of course, no state is perfect. States without an income tax still need money to pay for roads and schools, so residents have to pay other taxes to keep the state running (like sales, property and estate taxes). And sometimes those other taxes can be on the high end. For example, two states with no income tax have median property tax rates that are among the ten highest rates in the entire country. Two other states without an income tax are among the states with the highest sales tax rates. So, if you're thinking of moving to a state without an income tax, continue reading to see some of the other taxes you'll have to pay in those states. Maybe the state you're in right now won't look so bad.
Average combined state and local sales tax values are for 2022 and were compiled by the Tax Foundation. Property tax data is from 2021 and is based on information from the U.S. Census Bureau. Overall tax ratings are from the State-by-State Guide to Taxes on Middle-Class Families (opens in new tab).

Alaska Taxes
Overall Rating for Taxes: Most Tax-Friendly
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 reach 7.5%. Higher rates are found in locations that lack a property tax. But, according to the Tax Foundation, the statewide average is only 1.76%.
Property Taxes: In Alaska, the median property tax rate is $1,171 per $100,000 of assessed home value. That's slightly above the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Alaska State Tax Guide (opens in new tab).

Florida Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 6% state levy. Localities can add as much as 2%, and the average combined rate is 7.01%, according to the Tax Foundation. The combined rate is middle-of-the-road when compared to other states.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable (additional county tax on first $5,000 of purchase price may apply)
- Prescription Drugs: Exempt
Property Taxes: In Florida, the median property tax rate is $804 per $100,000 of assessed home value. That's also pretty average when compared nationally.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Florida State Tax Guide (opens in new tab).

Nevada Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 6.85% state levy. Localities can add as much as 1.53%, and the average combined rate is 8.23%, according to the Tax Foundation. That's a pretty high combined rate.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: Nevada's median property tax rate is $484 per $100,000 of assessed home value, which is one of the lowest rates in the U.S.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Nevada State Tax Guide (opens in new tab).

New Hampshire Taxes
Overall Rating for Taxes: Tax-Friendly
State Income Taxes: New Hampshire doesn't tax earned income, but currently there's a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers). The tax on dividends and interest is being phased out, though. The rate will be 4% for 2023, 3% for 2024, 2% for 2025, and 1% for 2026. The tax will then be repealed on January 1, 2027.
Sales Tax: New Hampshire has no state or local sales tax.
Property Taxes: The median property tax rate in New Hampshire is $1,766 per $100,000 of assessed home value. That's the fourth-highest rate in the country.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the New Hampshire State Tax Guide (opens in new tab).

South Dakota Taxes
Overall Rating for Taxes: Tax-Friendly
State Income Taxes: None.
Sales Tax: 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.4%, according to the Tax Foundation. That's a below average combined rate.
- Groceries: Taxable
- Clothing: Taxable
- Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 4% excise tax
- Prescription Drugs: Exempt
Property Taxes: The median property tax rate in South Dakota is $1,078 per $100,000 of assessed home value. That's above the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the South Dakota State Tax Guide (opens in new tab).

Tennessee Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 7% state levy. There's also an additional state tax of 2.75% on sales of single items that applies to the portion of the sales price from $1,600 to $3,200. Localities can add up to 2.75%, with an average combined state and local rate of 9.547%, according to the Tax Foundation. That's the second-highest combined rate in the nation. Local taxes are limited, though: Only the first $1,600 of any single item is taxable.
- Groceries: Taxable (4% state rate; additional local taxes may apply)
- Clothing: Taxable
- Motor Vehicles: Taxable (7% basic rate, plus 2.75% state tax on sales price between $1,600 and $3,200; additional local taxes may also apply)
- Prescription Drugs: Exempt
Property Taxes: The median property tax rate for Tennessee homeowners is $560 per $100,000 of assessed home value, which is well below the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Tennessee State Tax Guide (opens in new tab).

Texas Taxes
Overall Rating for Taxes: Mixed Tax Picture
State Income Taxes: None.
Sales Tax: 6.25% state levy. Localities can add up to 2%, with an average combined rate of 8.2%, according to the Tax Foundation. Texas' combined rate is well above the U.S. average.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: The median property tax rate in Texas is $1,599 per $100,000 of assessed home value. That's the seventh-highest rate in the country.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Texas State Tax Guide (opens in new tab).

Washington Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None. [Note that, beginning in 2022, the state is set to impose a 7% tax on the sale or exchange of certain long-term capital assets if the annual profits exceed $250,000. However, the constitutionality of the Washington capital gains tax is being challenged in the courts. A lower court has ruled the tax is unconstitutional, but the Washington Supreme Court has put the lower-court ruling on hold until it can address the matter.]
Sales Tax: 6.5% state levy. Municipalities can add up to 4% to that, with the average combined rate at 9.29%, according to the Tax Foundation. Washington's combined rate is the fourth-highest in the nation.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable (6.5% ordinary rate, plus additional 0.3% tax)
- Prescription Drugs: Exempt
Property Taxes: The Washington median property tax rate is $836 per $100,000 of assessed home value, which is close to the midpoint when compared to other states.
Inheritance and Estate Taxes: For 2023, an estate tax is imposed by Washington on estates with a value exceeding $2.193 million (the exemption threshold is subject to adjustment each year for inflation). Tax rates range from 10% to 20%. The state offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million.
For more information, see the Washington State Tax Guide (opens in new tab).

Wyoming Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 4% state levy. Municipalities can add up to 2% to that, with a combined rate of 5.36%, according to the Tax Foundation. The combined rate is the eighth-lowest in the U.S.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: In Wyoming, the median property tax rate is $545 per $100,000 of assessed home value, which is the 10th-lowest in the nation.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Wyoming State Tax Guide (opens in new tab).
Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
-
Gaining More Certainty in Your Retirement Income Plan
Relying on market performance to close the gap in your retirement income could let you down, but a CD ladder and fixed annuities could provide some certainty.
By Cole Czajkoski, Investment Adviser Representative • Published
-
Considering a 1031 Exchange? The Rules You Need to Know
Taxes are an inevitable part of investing in real estate. You can, however, defer or avoid paying capital gains taxes by following some simple rules of a 1031 exchange. Yes, you read that correctly!
By Daniel Goodwin • Published
-
Can the Earned Income Tax Credit Help You?
The IRS and community partners want to improve earned income tax credit awareness.
By Kelley R. Taylor • Published
-
Child Tax Credit Changes and FAQs for Your 2022 Tax Return
Tax Breaks The bigger and better child tax credit that applied for 2021 is gone, replaced by a new set of rules for taking the credit on 2022 returns.
By Joy Taylor • Published
-
The IRS Issued 12 Million Tax Refunds for 2020: Here's Why
An unemployment tax break caused the IRS to issue $14.8 billion in tax refunds.
By Kelley R. Taylor • Published
-
New EV Tax Credit Gets Complicated for 2023
More car models qualify for the full federal electric vehicle tax credit for a little while, but then what?
By Kelley R. Taylor • Published
-
State "Stimulus Checks" in 2023 – Which States Are Still Sending Payments
Residents in a handful of states could still receive a tax rebate check or other payment in 2023.
By Rocky Mengle • Last updated
-
What's the Gift Tax Exclusion for 2023?
Plan on giving cash or property to family or friends? Keeping it below the annual gift tax exemption can help you save both time and money.
By Rocky Mengle • Published
-
Retirement Saver's Tax Credit Converted to "Saver's Match"
President Biden has signed legislation that turns the Saver's Credit into a government match to your retirement plan contributions.
By Rocky Mengle • Published
-
SECURE 2.0 Act Changes 401(k), IRA, Roth, Other Retirement Plan Rules
The SECURE 2.0 Act of 2022 makes significant changes to retirement savings plans.
By Kelley R. Taylor • Last updated