Quick Answer
9 states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. California has the highest top rate at 13.3%. For a $100,000 salary, state income tax ranges from $0 to over $9,000/year depending on your state.
Key Takeaways
- 9 states have no income tax; 4 states have a flat tax under 5%
- California (13.3%), Hawaii (11%), New Jersey (10.75%) have the highest top rates
- No-income-tax states often compensate with higher sales or property taxes
- Total tax burden (income + sales + property) matters more than income tax alone
- On a $100,000 salary, state tax varies from $0 (TX, FL, TN) to $9,300+ (CA)
State income tax is one of the largest controllable expenses in your budget. For high earners, choosing the right state can save $10,000 to $30,000 per year in taxes alone. But income tax is just one piece of the puzzle. This guide compares all 50 states and analyzes how total tax burden interacts with cost of living. For overall cost data, see our state comparison guide.
States with No Income Tax
| State | Income Tax | Sales Tax | Property Tax | COL Index |
|---|---|---|---|---|
| Alaska | None | None (local only) | 1.07% | 125 |
| Florida | None | 6% | 0.86% | 97 |
| Nevada | None | 6.85% | 0.53% | 101 |
| New Hampshire | None | None | 1.86% | 118 |
| South Dakota | None | 4.5% | 1.14% | 95 |
| Tennessee | None | 7% | 0.64% | 89 |
| Texas | None | 6.25% | 1.68% | 93 |
| Washington | None | 6.5% | 0.93% | 130 |
| Wyoming | None | 4% | 0.56% | 98 |
Highest Income Tax States
| State | Top Rate | Tax on $100K | COL Index | Overall Tax Burden |
|---|---|---|---|---|
| California | 13.3% | $5,800 | 143 | Very High |
| Hawaii | 11% | $6,500 | 170 | Very High |
| New Jersey | 10.75% | $5,100 | 128 | Very High |
| New York | 10.9% | $5,400 | 137 | Very High |
| Minnesota | 9.85% | $5,200 | 100 | High |
Tax Impact on a $100,000 Salary
| State | State Income Tax | Take-Home (after federal + state) | Monthly Take-Home |
|---|---|---|---|
| Texas (no tax) | $0 | $78,000 | $6,500 |
| Tennessee (no tax) | $0 | $78,000 | $6,500 |
| Colorado (4.4% flat) | $4,400 | $73,600 | $6,133 |
| Illinois (4.95% flat) | $4,950 | $73,050 | $6,088 |
| New York (6.85%+) | $5,400 | $72,600 | $6,050 |
| California (9.3%+) | $5,800 | $72,200 | $6,017 |
Data Sources
- Bureau of Labor Statistics Consumer Expenditure Survey (2024)
- MERIC Cost of Living Index
- Bureau of Economic Analysis Regional Price Parities
- HUD Fair Market Rents
- U.S. Census Bureau American Community Survey
- Zillow Observed Rent Index (ZORI)
Frequently Asked Questions
Which states have no income tax?
Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire previously taxed interest and dividends but phased this out effective January 2025.
Are no-income-tax states always cheaper?
No. Washington (COL 130) and Alaska (COL 125) are quite expensive despite having no income tax. Texas (COL 93), Tennessee (COL 89), and Florida (COL 97) are the most affordable no-income-tax states. Always look at total cost of living, not just tax rates.
What is the total tax burden by state?
Total tax burden includes income tax, sales tax, and property tax. New York and New Jersey have the highest total burden. Wyoming, Tennessee, and Florida have among the lowest. The Tax Foundation publishes annual total tax burden rankings.
How do property taxes compare across states?
Property tax rates range from 0.28% (Hawaii) to 2.23% (New Jersey). On a $300,000 home, that is $840/year in Hawaii versus $6,690/year in New Jersey. Texas has no income tax but high property taxes (1.68%), which partially offsets the income tax savings.
Do state taxes affect retirement income?
Yes. 37 states do not tax Social Security. Some states also exempt pension income or IRA/401(k) withdrawals. No-income-tax states benefit retirees the most, as all retirement income is untaxed. See our best states for retirement guide.
How much does California income tax cost?
California's progressive rates range from 1% to 13.3%. On $100,000 of taxable income, the effective state tax is approximately $5,800. On $200,000, it is approximately $14,500. On $500,000, it exceeds $45,000. This is on top of federal taxes.
Is Texas really tax-free?
Texas has no income tax, but it is not tax-free. Texas has a 6.25% sales tax (up to 8.25% with local taxes), property taxes averaging 1.68% (among the highest in the nation), and various fees. A homeowner in Texas may pay more total taxes than someone in a low-property-tax state with moderate income tax.
Can I reduce my state tax burden legally?
Yes. Legal strategies include: relocating to a no-income-tax state (must establish genuine domicile), maximizing pre-tax retirement contributions to reduce taxable income, taking advantage of state-specific deductions, and timing income/capital gains around state residency changes. Always consult a tax professional.
Related Guides
- Cost of Living Comparison by State
- Salary Needed by State
- Best States for Retirement
- American Tax Burden Report
Disclaimer: This article is for informational purposes only. Tax rates are based on 2025 state tax codes and may change. Individual tax situations vary based on income, deductions, filing status, and other factors. Consult a qualified tax professional for personalized advice.
Related Reading
- Capital Gains Tax by State 2026 - Every state's capital gains rate compared in one guide
- Capital Gains Tax Complete Guide 2026 - Federal and state investment tax planning
- How to Reduce Capital Gains Tax in 2026 - Strategies that work in high-tax and no-tax states
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