And it's real — nine U.S. states levy no individual income tax in 2026. A high earner leaving California can genuinely save five figures a year on the income-tax line alone.
But here's what the moving brochures skip: no income tax does not mean no tax. States still need revenue, so they collect it elsewhere — property taxes, sales taxes, excise taxes, fees. For some people, the move is a jackpot. For others, it's a wash. And for retirees on fixed incomes, it can actually cost more.
Let's do the real math.
The Nine States (2026)
As of 2026, the no-income-tax states are:
- Alaska — no income or statewide sales tax; funded largely by oil and gas revenue (residents even get an annual Permanent Fund Dividend)
- Florida — heavy reliance on sales tax and tourism revenue
- Nevada — funded heavily by gaming and tourism taxes
- New Hampshire — fully repealed its tax on interest and dividends on January 1, 2025, making it a true zero-income-tax state; but property taxes are among the nation's highest
- South Dakota — moderate sales tax
- Tennessee — repealed its old investment-income "Hall Tax" in 2021; relies on one of the country's highest combined sales tax rates (up to 9.75%)
- Texas — high property taxes and sales taxes (up to 8.25% combined)
- Washington — no tax on wages, but a 7% capital gains tax on long-term gains above roughly $270,000 (rising to 9.9% above $1 million), annually adjusted
- Wyoming — mineral and energy severance taxes
California, for contrast, tops out at a 13.3% top marginal rate — the highest in the country (Hawaii is next at 11%).
What You Actually Save at Each Income Level
Savings depend on what you'd pay where you live now. Here's the rough picture for a single filer moving from a high-tax state:
| Your income | ~State tax in California | ~State tax in Florida/Texas/NV | Approximate savings |
|---|---|---|---|
| $60,000 | ~$2,000–3,000 | $0 | ~$2,000–3,000/yr |
| $100,000 | ~$6,000–8,000 | $0 | ~$6,000–8,000/yr |
| $150,000 | ~$10,000–12,000 | $0 | ~$10,000–12,000/yr |
| $300,000 | ~$25,000–30,000 | $0 | ~$25,000–30,000/yr |
(The exact California figures depend on deductions and filing status — effective rates, not top brackets, are what matter. A mid-six-figure earner in California or New York realistically keeps $10,000+ more per year after a move.)
What You Pay Instead: The Hidden Tax Bill
This is where moves get mispriced. Compare the trade-offs:
Property taxes. Texas has one of the highest effective property tax rates in the country (about 1.63%). On a $400,000 home, that's roughly $6,500/year — vs. under $2,000 in a low-property-tax state. New Hampshire's effective property tax rate approaches 1.93%, among the highest in the nation.
Sales taxes. Tennessee's combined state-and-local sales tax can hit 9.75%, among the highest in the U.S. A family spending $40,000/year on taxable purchases pays roughly $3,900 in sales tax there — more than some low earners ever paid in income tax.
Excise and fees. Washington's 7% capital gains tax above ~$270,000 catches high earners with big investment gains. Car registration, business taxes, and local fees vary wildly.
Bottom line: the classic winner is a high earner who rents or owns modestly and spends moderately. The classic loser is a retiree on a fixed income who owns a home outright and spends heavily on taxable goods — paying zero income tax on a small taxable income while getting hammered on property and sales tax.
The Rules That Can Bite You
- Source income follows the work. Earn income physically in another state and that state can tax it, regardless of where you live.
- Washington's capital gains tax means high-earning investors should model carefully before assuming "zero."
- Three states ban income taxes constitutionally (Florida, Nevada, Texas) — but that doesn't stop other taxes from rising.
The 5-Minute Move Test
Before you call the movers, answer these three questions:
- What is your effective state income tax rate right now (total state tax ÷ income)?
- Would your property tax bill go up or down at your target home price?
- How much do you spend annually on taxable goods (multiply by the sales tax difference)?
If (1) clearly exceeds (2) + (3), the move likely pays. If not, you're moving for the weather — which is also fine, just know it.
FAQ
Q: Which states have no income tax in 2026?
A: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Q: Does New Hampshire really have no income tax now?
A: Yes. It finished phasing out its tax on interest and dividend income on January 1, 2025, joining the full no-income-tax list. It still has no sales tax but very high property taxes.
Q: Is Washington truly a no-income-tax state?
A: On wages and retirement income, yes. But Washington taxes long-term capital gains above roughly $270,000 at 7% (9.9% above $1 million), so wealthy investors aren't fully exempt.
Q: Do no-income-tax states really have higher property taxes?
A: Often, yes. Texas and New Hampshire both rank near the top nationally for property tax burden. That's the main offset most movers underestimate.
Q: Can my old state still tax me after I move?
A: Income you earn physically in another state is taxable there. Some aggressive states also audit high earners who claim to have moved — keep documentation of your new residency.
This article is for general information only and is not financial or tax advice. Tax situations vary; consult a qualified tax professional before making relocation decisions.
Tool tie-in: A "Should I Move? Tax Savings Calculator" comparing effective state tax, property tax, and sales tax burden would fit this article perfectly.