Maria Vasquez opened her first Austin paycheck in and stared at the state withholding line — it read $0.00. She’d spent twelve years in Portland, Oregon, watching 9.9% leave every check before she could touch it.
[Nine states collect zero individual income tax in 2026]: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. But no income tax rarely means no tax burden — sales tax, property tax, and hidden fees often compensate aggressively. This guide names exact towns, real dollar amounts, and the trade-offs nobody posts on the relocation forums.
The Nine States — And Why New Hampshire Is Still an Asterisk
Read more: Cheapest States to Live in America
The full 2026 roster is clean on its face. [New Hampshire taxes only investment income — dividends and interest at 3% in 2026, down from 4% in 2025, with full legislative repeal scheduled for ]. If you’re a W-2 worker in Concord, you pay nothing on wages. If you’re a retiree in Nashua living off dividend income, you still owe the state a small cut — for now.
The other eight — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming — impose zero tax on wages, salaries, and most ordinary income. That’s the headline. Here’s the fine print.
Income Tax in 2026
Sales Tax Cap
Sales Tax on Food
Tax Rate in 2026
What Moving Actually Costs: Town-by-Town Reality Check
Saving on income tax is real. In San Antonio, Texas, a household earning $85,000 saves roughly $4,675/year compared to the same income in California (9.3% marginal rate applies there). That’s $389/month back in your pocket.
But San Antonio’s median property tax rate sits near 2.2% of assessed value. On a $310,000 home — roughly the 2026 median there — that’s $6,820/year in property tax alone. Compare that to Albuquerque, New Mexico (which does have income tax) where effective property tax rates hover around 0.79%.
In Las Vegas, Nevada, the sales tax rate in Clark County is 8.375%. A family spending $4,500/month on taxable goods and services pays roughly $376/month in consumption taxes — nearly $4,512/year. Nevada’s property taxes are more forgiving at about 0.6% effective rate, but the sales tax is relentless.
| State / City | Income Tax | Sales Tax (Max) | Effective Property Tax | 1BR Median Rent |
|---|---|---|---|---|
| Cheyenne, WY | None | 6% | 0.61% | $1,050 |
| Nashville, TN | None | 9.75% | 0.66% | $1,620 |
| Anchorage, AK | None | 0% (state) | 1.19% | $1,380 |
| Sioux Falls, SD | None | 6.5% | 1.14% | $960 |
| Austin, TX | None | 8.25% | 1.81% | $1,927 |
| Seattle, WA | None | 10.25% | 0.94% | $2,190 |
Sources: Tax Foundation 2026 state data; Zillow Rent Index Q1 2026. Austin 1BR at $1,927/month — about what a 1-bedroom costs in Phoenix, AZ.
Remote Work Viability: Who Actually Thrives Here
Read more: 3,800+ Ghost Towns Worth Your Next American Road Trip
Remote workers targeting no-income-tax states often land in Sioux Falls, South Dakota — population 202,121 as of the 2020 census, now estimated near 215,000. Average internet speed: 200+ Mbps across most zip codes. Co-working space at The Bunker downtown runs $250/month for a dedicated desk. The city lacks the trendy gloss of Austin but wins on pure cost math.
[Small business owners relocating to these states can file state and federal returns faster, since there’s no state income return to prepare in seven of the nine states]. Washington state has no income tax but does levy a Business & Occupation (B&O) tax on gross receipts — freelancers earning $60,000 in Seattle owe approximately $270/year in B&O tax under the service rate of 0.5%.
A family earning $75,000 in Nashville, Tennessee pays no state income tax. But Tennessee’s combined state and local sales tax averages 9.55% — the highest in the nation by some measures. That same family spending $3,200/month on taxable purchases owes roughly $3,666/year in sales tax. A comparable family in Charlotte, North Carolina pays 4.75% income tax but only 7.25% sales tax and faces lower property tax rates. The net difference shrinks to under $800/year — hardly worth a cross-state move.
Retirement in No-Tax States: Medicare, Investment Income, and Real Numbers
Retirees moving to these states often overlook healthcare cost exposure. [Out-of-pocket Medicare costs are a critical
Retirees on fixed incomes make a different calculation than working families. Their tax picture involves Social Security, pension distributions, required minimum distributions (RMDs), and capital gains — not a W-2. In a no-income-tax state, all of it escapes state-level taxation. That is genuinely significant.
Consider a retired couple in Naples, Florida — Collier County — drawing $28,000/year from Social Security, $22,000 from a 401(k) RMD, and $18,000 in dividend income. Total: $68,000. In Florida, they owe $0 in state income tax. Move that same couple to Asheville, North Carolina, and North Carolina’s 4.5% flat income tax (2026 rate) costs them roughly $3,060/year. Over a 20-year retirement, that gap compounds to over $61,000 — before factoring in investment growth on retained savings.
Medicare premiums are federal. No state affects them. But Washington State introduced a wrinkle in : a 7% capital gains tax on gains exceeding $262,000 per year (as of 2026, adjusted for inflation). Retirees liquidating investment portfolios above that threshold in Bellevue or Kirkland face a real state-level tax hit — despite Washington having no income tax. That is not theoretical. It is a line-item surprise.
- Florida: No income, capital gains, or estate tax at state level. Homestead exemption reduces property tax burden.
- Wyoming: No income or capital gains tax. Median property tax rate: 0.57%. Sparse population means low county levies.
- Nevada: No income or capital gains tax. Sales tax averages 8.23% statewide — offset by no estate tax.
- South Dakota: No income tax. Pierre and Rapid City retirees also benefit from no inheritance tax and sub-6% combined sales tax in many counties.
- New Hampshire: Eliminated its Interest & Dividends tax entirely as of . Now truly zero income tax on all sources.
Property Tax: The Bill No-Income-Tax States Often Send Instead
Read more: Austin’s $5,400 Monthly Burn: What a Cost of Living Index Really Measures
States forgo income tax revenue somehow. Property taxes are frequently the answer. Texas is the most cited example. With no income tax, the Lone Star State leans hard on property owners. The effective statewide average property tax rate sits near 1.63% of assessed value — among the top five highest in the nation according to Tax Policy Center data.
A median-priced home in Austin, Travis County was assessed around $525,000 in early 2026. At a combined city-county-school effective rate near 1.81%, that household owes approximately $9,502/year in property taxes — $792/month. That is not a rounding error. It is a mortgage-sized additional cost.
Compare that to Henderson, Nevada — Clark County — where the effective property tax rate is approximately 0.55%. A comparable $525,000 home there generates a property tax bill near $2,888/year. Nevada has no income tax either. The $6,600/year difference between Austin and Henderson is real and compounding. Nevada funds government partly through gaming and tourism taxes that most residents never directly pay.
Avg. effective property tax: 1.63%
Combined sales tax (avg.): 8.20%
$525K Austin home: ~$9,502/yr property tax
Avg. effective property tax: 0.57%
Combined sales tax (avg.): 5.36%
$525K Cheyenne home: ~$2,993/yr property tax
Avg. effective property tax: 0.83%
Combined sales tax (avg.): 7.02%
$525K Naples home: ~$4,358/yr property tax
The Full List: Every No-Income-Tax State in 2026 and Their Hidden Costs
Nine states impose no broad-based individual income tax as of . Each has a distinct fiscal personality. None is a pure tax haven.
| State | Income Tax | Avg. Sales Tax | Avg. Property Tax Rate | Key Caveat |
|---|---|---|---|---|
| Alaska | None | ~1.76% (local only) | 1.04% | Extreme cost of living in Anchorage; remote borough taxes vary widely |
| Florida | None | 7.02% | 0.83% | Insurance costs in Miami-Dade and coastal counties can exceed $8,000/yr |
| Nevada | None | 8.23% | 0.55% | Commerce Tax on businesses; Las Vegas water scarcity increasingly an infrastructure cost |
| New Hampshire | None (as of ) | 0% | 1.93% | Highest property tax rate on this list; Concord homeowners feel it sharply |
Frequently Asked Questions
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