In short: Nine states levy no tax on wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington still taxes large capital gains. The others raise money elsewhere, mostly through sales and property taxes: Tennessee's average combined sales tax is 9.61%, and Texas's average effective property tax is 1.31%. On $75,000 of taxable income, the average state income tax across all 50 states is $2,680.70.
The nine states
| State | Tax on wages | Tax on investment income | What to know |
|---|---|---|---|
| Alaska | None | None | No statewide sales tax either; local sales taxes apply in many places |
| Florida | None | None | Corporate income tax applies to corporations |
| Nevada | None | None | Commerce Tax on large businesses' gross revenue |
| New Hampshire | None | None from 2025 | Interest and Dividends Tax repealed for periods beginning after 31 December 2024 |
| South Dakota | None | None | No corporate income tax |
| Tennessee | None | None since 2021 | Hall income tax on interest and dividends repealed from 1 January 2021 |
| Texas | None | None | Franchise (margin) tax on businesses |
| Washington | None | Long-term capital gains above a deduction | Capital gains excise tax and a state estate tax |
| Wyoming | None | None | No corporate income tax |
Two of these are recent arrivals. Tennessee taxed interest and dividends under the Hall income tax until it was phased out and repealed for tax periods beginning on or after 1 January 2021. New Hampshire taxed interest and dividends until its repeal took effect for taxable periods beginning after 31 December 2024, so 2025 is the first year with no such return to file.
Washington is the exception that still taxes some personal income. It has no tax on wages, but it levies a 7% excise tax on long-term capital gains above a standard deduction, and the Department of Revenue has announced tiered rates that add a higher rate on the largest gains. Real estate and retirement accounts are among the exempt assets.
What the engine computes for Washington's capital gains tax
The site's capital gains calculators apply Washington's tax as a deduction of $278,000, then 7% on the next $1,000,000 of gain and 9.9% above that. The $278,000 figure is the 2025 deduction published by the Department of Revenue; when the table was verified, the 2026 inflation-adjusted figure had not been published, so the latest confirmed amount is used.
| Long-term capital gain in Washington | Washington tax |
|---|---|
| $250,000 | $0.00 |
| $300,000 | $1,540.00 |
| $500,000 | $15,540.00 |
| $1,500,000 | $91,978.00 |
On a $300,000 gain, only $22,000 is above the deduction, so the tax is $1,540.00. On $1,500,000, the first $1,000,000 above the deduction is taxed at 7% and the remaining $222,000 at 9.9%.
What they tax instead
States without an income tax still have to fund schools, roads and public services. Most lean on sales and property taxes. Here are the averages in the site's 2026 tables:
| State | State sales tax | Average local sales tax | Combined | Effective property tax | Property tax rank (1 = highest) |
|---|---|---|---|---|---|
| Alaska | 0.00% | 1.82% | 1.82% | 1.06% | 16 |
| Florida | 6.00% | 0.98% | 6.98% | 0.75% | 26 |
| Nevada | 6.85% | 1.39% | 8.24% | 0.47% | 43 |
| New Hampshire | 0.00% | 0.00% | 0.00% | 1.46% | 4 |
| South Dakota | 4.20% | 1.91% | 6.11% | 1.02% | 17 |
| Tennessee | 7.00% | 2.61% | 9.61% | 0.45% | 45 |
| Texas | 6.25% | 1.95% | 8.20% | 1.31% | 8 |
| Washington | 6.50% | 3.07% | 9.57% | 0.79% | 23 |
| Wyoming | 4.00% | 1.39% | 5.39% | 0.57% | 37 |
For comparison, the average combined sales tax across all 50 states in the same table is 6.66%, and the unweighted average effective property tax rate is 0.8878%.
The pattern is uneven. Tennessee and Washington have the second- and third-highest combined sales taxes in the country. Texas and New Hampshire have some of the highest property taxes. Wyoming and Alaska are low on both. A state without an income tax is not automatically a low-tax state; it depends on which taxes a household actually pays.
Business taxes differ too. Texas, Nevada and Washington tax businesses on gross receipts or margins rather than profits. Florida, New Hampshire and Tennessee have corporate taxes on business income at 5.5%, 7.5% and 6.5%. South Dakota and Wyoming have no corporate income tax.
What the missing income tax is worth
To put a figure on it, the engine applies each state's 2026 rate schedule to the same taxable income. These are illustrations of the rate schedules, applied before any state-specific deductions, exemptions or credits, which vary by state and would reduce the figures.
| Taxable income | Average across 50 states | Median | Highest (Oregon) | Nine no-income-tax states |
|---|---|---|---|---|
| $75,000 | $2,680.70 | $3,122.32 | $6,243.50 | $0.00 |
| $150,000 | $5,778.90 | $6,567.63 | $13,093.50 | $0.00 |
The average includes the nine zeros. At $75,000, the schedules of some other states give: Arizona $1,875.00, North Carolina $2,992.50, Colorado $3,300.00, California $3,413.64 and Georgia $3,742.50.
Putting the three taxes together
A rough comparison uses the same household in each state: $75,000 of taxable income, a $400,000 home taxed at the state's average effective rate, and $30,000 a year of spending subject to sales tax at the state's average combined rate. These are statewide averages, and a real bill depends on the county, the city and what is bought.
| State | Income tax | Property tax | Sales tax | Total of the three |
|---|---|---|---|---|
| Wyoming | $0.00 | $2,280.00 | $1,617.00 | $3,897.00 |
| Tennessee | $0.00 | $1,800.00 | $2,883.00 | $4,683.00 |
| Florida | $0.00 | $3,000.00 | $2,094.00 | $5,094.00 |
| Washington | $0.00 | $3,160.00 | $2,871.00 | $6,031.00 |
| Arizona | $1,875.00 | $1,720.00 | $2,562.00 | $6,157.00 |
| Colorado | $3,300.00 | $1,960.00 | $2,367.00 | $7,627.00 |
| Texas | $0.00 | $5,240.00 | $2,460.00 | $7,700.00 |
| California | $3,413.64 | $2,840.00 | $2,709.00 | $8,962.64 |
On these assumptions, the Texas household pays slightly more in these three taxes than the Colorado one, because the Texas property tax on a $400,000 home is $3,280.00 higher than Colorado's and more than offsets Colorado's income tax. A renter in Texas would come out well ahead, because property tax reaches renters only indirectly through rent. The answer depends on the household: income favors the no-income-tax states, while an expensive home in a high-property-tax state can erase the advantage.
What does not change
Moving to a state without an income tax does not change federal tax. Federal income tax, Social Security and Medicare tax apply in all nine states exactly as elsewhere, so a paycheck in Texas still shows federal withholding and 7.65% payroll tax on wages up to the Social Security wage base.
Residents of no-income-tax states who itemize federal deductions can choose to deduct state and local general sales taxes instead of income taxes. That deduction falls under the same federal cap on state and local taxes as income and property tax.
Common mistakes
Assuming no income tax means low taxes. Texas and New Hampshire have high property taxes, and Tennessee and Washington have high sales taxes.
Forgetting Washington's capital gains tax. A large sale of stock or a business interest can trigger it, even though wages are untaxed.
Assuming a move ends the old state's claim. States tax income earned while you were a resident and income sourced to them, and they set their own rules for when residency ends. A move partway through a year usually means part-year returns.
Treating New Hampshire as untaxed investment income before 2025. Interest and dividends received for periods beginning on or before 31 December 2024 were still subject to the old tax.
Try it with your own numbers
The Texas property tax calculator and Texas sales tax calculator show the two taxes Texas relies on, and the Washington capital gains tax calculator applies that state's excise tax to a sale. Each state's paycheck calculator, such as the Texas paycheck calculator, shows take-home pay with only federal taxes withheld. The 2026 FICA guide covers the payroll taxes that still apply everywhere.
Frequently asked questions
Which states have no income tax in 2026?
Does New Hampshire still tax interest and dividends?
Do I still pay federal tax in a state with no income tax?
Which no-income-tax state has the lowest overall taxes?
Does Washington tax capital gains on selling a home?
Sources
- Tennessee Department of Revenue, Hall Income Tax, repealed for tax periods beginning on or after 1 January 2021. tn.gov/revenue/taxes/hall-income-tax.html
- New Hampshire Department of Revenue Administration, guide to the 2023 tax law changes, including repeal of the Interest and Dividends Tax for taxable periods beginning after 31 December 2024. revenue.nh.gov/news-and-media/nh-department-revenue-administration-develops-comprehensive-guide-detailing-2023-tax
- Washington State Department of Revenue, Capital gains tax, including the 7% rate, the standard deduction and exempt assets. dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax
- Tax Foundation, State and local sales tax rates, midyear 2026, the source of the sales tax table. taxfoundation.org/data/all/state/2026-sales-tax-rates-midyear
- SmartAsset, Property taxes by state, effective rates derived from U.S. Census Bureau American Community Survey median taxes paid and home values, the source of the property tax table. smartasset.com/taxes/property-taxes
- Internal Revenue Service, Topic no. 503, Deductible taxes, including the election to deduct sales taxes instead of income taxes. irs.gov/taxtopics/tc503