The 9 No-Income-Tax States: What You Really Save, and What You Pay Instead

Nine states charge no income tax on wages, and the paycheck difference is real: a single filer earning $75,000 keeps about $61,593 a year in one of them, versus roughly $58,942 in California or $56,881 in Oregon. That is between $2,651 and $4,712 more in your account for the same job, purely because of the state line. You can run your own salary and state in the Take-Home Pay Calculator. The other half of the story is what those states collect instead, and it is not nothing.

The nine are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming (Tax Foundation, 2026 State Tax Competitiveness Index). Two of them only recently joined the list. New Hampshire finished repealing its tax on interest and dividends on January 1, 2025, and Tennessee ended its Hall tax on investment income on January 1, 2021. Before those dates, both still taxed a slice of personal income.

Everyone on that $75,000 pays the same federal tax and the same FICA. The whole state-to-state spread comes down to the one line a no-tax state leaves blank. That is why the effective total rate in these nine states lands at 17.9% while a high-tax state pushes past 22%.

The paycheck gap, in one chart

Here is the take-home on $75,000 in all nine no-income-tax states next to three states with an income tax. The nine sit level at the top because their state line is zero. Everyone else falls by exactly what their income tax takes.

Against California, the more typical high-tax comparison, the gap is about $2,651 a year. Against New York it is roughly $3,240, and against Oregon, the steepest in the dataset, it stretches to $4,712. Those are gross paycheck differences, computed from federal tax plus FICA plus a simplified state estimate. They are the money the state income tax never removes. They are not yet the money you get to keep after everything else a state charges.

No income tax is a revenue mix, not a free lunch

A state still has to pay for schools, roads, and troopers. Drop the income tax and the money has to come from somewhere else. It shows up in three main places.

Sales tax. Tennessee and Washington carry two of the highest combined state-and-local sales tax rates in the country. On the site’s 2025 rate table, Tennessee sits at 9.55% and Washington at 9.38% (Tax Foundation, 2025). The 2026 edition nudges those a little higher, to 9.61% and 9.51%, and puts Tennessee as the highest of the nine no-tax states (Tax Foundation, 2026). Louisiana, which does have an income tax, is actually the national leader, so high sales tax is a tendency among the no-tax states, not a rule.

Property tax. Texas and New Hampshire lean hard on the home. Tax Foundation’s 2026 figures, built on 2024 Census survey data, put the effective property tax rate at 1.40% of home value in Texas and 1.50% in New Hampshire. On a $350,000 house that is roughly $4,900 to $5,250 a year. Neither is the highest in the country. New Jersey and Illinois, both with income taxes, top that table near 1.88%. But for a homeowner, a steep property bill can eat the whole income-tax saving.

Resource revenue. Alaska funds its government from oil and its Permanent Fund and charges neither an income tax nor a state sales tax. It even pays residents a dividend. The catch is that the dividend swings with oil. The 2025 Permanent Fund Dividend was $1,000 per resident, the lowest in five years (Alaska Department of Revenue). That is a real perk, but not a stable one, and Wyoming leans on mineral and severance taxes in a similar, commodity-dependent way.

What the saving looks like once you spend it

Here is the same $75,000 earner’s paycheck gain against California, then a rough giveback through sales tax. Say you spend about $30,000 a year on taxable goods and live in Tennessee, where the combined rate is 9.55%.

The saving is real. The headline number is a paycheck figure, and a state with no income tax collects its money back through the register, the property bill, or a swing in oil prices. Whether you come out ahead depends on how much you spend, whether you own a home, and how expensive that home is. A renter who spends little keeps most of the gain. A homeowner in a high-property-tax county may hand most of it back.

”No income tax” is not “no tax on income”

The phrase is looser than it sounds. Washington taxes long-term capital gains at 7%, tiered, with an extra 2.9% on gains above $1 million, sitting above a large standard deduction of about $278,000 (Washington Department of Revenue). So a Washington resident with a big stock sale pays a state tax on that income, even though the state has no tax on wages. New Hampshire only stopped taxing interest and dividends in 2025. The precise claim is that these nine states levy no broad-based tax on wage income. For most workers that is what matters, and it is the line that drives the paycheck gap above.

The caveat. The take-home figures here come from the 2026 federal brackets, the $16,100 single standard deduction, and a flat 7.65% FICA, all computed, plus a simplified state estimate. The nine no-tax states are exact at $0. The taxed-state figures, including the $2,651 gap to California and the $4,712 gap to Oregon, are ranking-grade estimates that ignore state deductions, credits, brackets, and local income taxes. None of these numbers subtract the sales tax, property tax, or resource-linked revenue a no-tax state charges instead. Treat the paycheck gap as real and the cost-of-living verdict as unsettled.

Common questions

Which state has no income tax and no sales tax? Alaska is the only state that charges neither a state income tax nor a state sales tax, though some Alaskan cities add a local sales tax. New Hampshire has no wage income tax and no general sales tax either, but it makes up the difference with the country’s second-highest effective property tax at 1.50%.

Do no-income-tax states have higher property taxes? Often, but not always. Texas at 1.40% and New Hampshire at 1.50% lean on property tax to replace the income tax. Yet the two highest property-tax states in the country, New Jersey and Illinois near 1.88%, both have an income tax on top. So a high property bill is a common trait of no-tax states, not a guarantee.

Does moving to Texas or Florida actually save money? On the paycheck alone, yes, about $2,651 a year for a $75,000 single filer versus California. Whether that survives depends on what you buy and where you live. A renter who spends modestly keeps most of it. A homeowner in a pricey county with a 1.40% property rate can hand a large share of it back.

If you are weighing a move or an offer, compare the take-home, not the salary, and then add the housing and the sales tax before you decide. Run your exact number, filing status, and state in the Take-Home Pay Calculator.

For more, see The 50-State Money Hub, the full ranking in Take-Home Pay by State, and the other half of the trade in Sales Tax by State.