9 States With No Income Tax (2026 Comparison)

1. The 9 States With Zero Income Tax

As of 2025, nine US states levy no broad-based individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

For digital nomads, expats, retirees, and business owners looking to minimize their tax burden, moving your domicile to one of these states can save tens or even hundreds of thousands of dollars per year. But "no income tax" doesn't always mean "low taxes" — several of these states compensate with higher sales taxes, property taxes, or other levies.

Below, we break down each state in detail: what you actually pay, what you don't, and who each state is best suited for.

2. Alaska

Income tax: 0%. No individual income tax of any kind.

Sales tax: No state sales tax. However, some local municipalities levy their own sales taxes (up to ~7.5% in some boroughs). There is no statewide sales tax to anchor these — each locality sets its own rate independently.

Estate tax: None. Alaska does not impose a state-level estate or inheritance tax.

Property tax: Varies by municipality. The statewide average effective rate is approximately 1.04%, which is moderate. Some areas are significantly higher or lower depending on local services and infrastructure needs.

The catch: Alaska has a high cost of living, particularly for housing, food, and transportation. Its remote location makes it impractical for most people who don't genuinely want to live there. The state is not a realistic domicile option for digital nomads or snowbirds.

The bonus: Alaska pays its residents. The Alaska Permanent Fund Dividend (PFD) distributes a portion of oil revenue to every eligible resident each year. In 2024, the dividend was approximately $1,312 per person. You must be a resident and physically present in the state to qualify.

Best for: People who actually want to live in Alaska. If you love the outdoors, don't mind the cold, and want the combination of no income tax, no sales tax, and an annual dividend check, it's hard to beat. But it's not a viable "paper domicile" state.

3. Florida

Income tax: 0%. No individual income tax. This is enshrined in the Florida Constitution, making it extremely unlikely to change.

Sales tax: 6% state base rate, plus local surtaxes of up to 2% depending on the county. The combined rate ranges from 6% to 8% in most areas. Miami-Dade County, for example, has a combined rate of 7%.

Estate tax: None. Florida does not impose a state-level estate or inheritance tax.

Property tax: The statewide average effective rate is approximately 0.86%, which is moderate. Florida's homestead exemption reduces the taxable value of your primary residence by up to $50,000, and the Save Our Homes cap limits annual assessed value increases to 3% — a significant benefit for long-term homeowners.

Homestead protection: Florida has some of the strongest homestead protections in the country. Your primary residence is protected from most creditors (with limited exceptions), and there is no cap on the value protected. This is a major draw for business owners and high-net-worth individuals.

Domicile establishment: Florida has no minimum stay requirement. To establish domicile, you file a Declaration of Domicile with the county clerk, get a Florida driver's license, register to vote, and use a Florida address on your tax returns and financial accounts. The process is well-established and straightforward.

Best for: Digital nomads, expats, retirees, anyone wanting warm weather combined with tax savings. Florida is the most popular zero-income-tax state for establishing domicile, thanks to its warm climate, no minimum stay requirement, strong homestead protections, and well-developed infrastructure for domicile services. It's the default choice for a reason.

4. Nevada

Income tax: 0%. No individual income tax.

Sales tax: 6.85% state rate, plus local taxes of up to 1.53%. The combined rate in Las Vegas (Clark County) is 8.375%. Reno (Washoe County) has a combined rate of 8.265%.

Estate tax: None. Nevada does not impose a state-level estate or inheritance tax.

Property tax: The statewide average effective rate is approximately 0.53%, which is among the lowest in the country. Nevada also has a property tax cap that limits annual increases.

Corporate tax: No corporate income tax. Nevada does have a Commerce Tax on businesses with gross revenue exceeding $4 million, but most small businesses fall below this threshold.

Best for: Business owners, those who want to live near Las Vegas or Reno, and people seeking low property taxes. Nevada's combination of no income tax, no corporate income tax, and low property taxes makes it attractive for entrepreneurs. The state is also popular for LLC formation due to its strong privacy protections and business-friendly laws.

5. New Hampshire

Income tax: 0%. New Hampshire previously taxed interest and dividend income at 5% under its Interest & Dividends Tax. This tax was phased down over several years and was fully repealed effective January 1, 2025. New Hampshire now has no income tax of any kind — no tax on wages, interest, dividends, or capital gains.

Sales tax: None. New Hampshire has no state sales tax.

Estate tax: None. New Hampshire does not impose a state-level estate or inheritance tax.

Property tax: Relatively high. The statewide average effective rate is approximately 1.57%, among the highest in the country. Because New Hampshire has no income tax and no sales tax, property taxes are the primary revenue source for local governments and school districts. This means property tax bills can be substantial.

Best for: Those in the Northeast who want proximity to Boston and New York City while living in a no-income-tax, no-sales-tax state. New Hampshire is ideal for high earners who rent rather than own (avoiding the high property taxes) or who don't mind paying more in property taxes in exchange for zero taxes on their income and purchases.

6. South Dakota

Income tax: 0%. No individual income tax.

Sales tax: 4.2% state rate, plus local taxes that can add up to approximately 2% more. The combined rates are modest compared to many other states.

Estate tax: None. South Dakota does not impose a state-level estate or inheritance tax.

Corporate tax: No corporate income tax.

Property tax: The statewide average effective rate is approximately 1.08%, which is moderate. Property taxes fund local governments and school districts, but rates are not as high as in Texas or New Hampshire.

Trust laws: South Dakota is widely regarded as having the best trust laws in the United States. The state allows dynasty trusts with no rule against perpetuities (trusts can last forever), has strong asset protection trust statutes, no state income tax on trust income, and a highly developed trust administration industry. This makes South Dakota the top choice for high-net-worth individuals engaging in long-term estate and trust planning.

Domicile establishment: South Dakota is the second most popular state (after Florida) for establishing domicile as a digital nomad or full-time traveler. The process is straightforward: spend one night in the state, obtain a mailing address, get a South Dakota driver's license, and register to vote. There is no minimum stay requirement for maintaining domicile.

Best for: Trust and estate planning, low overall tax burden, digital nomads seeking an easy domicile process. South Dakota's combination of no income tax, no corporate income tax, no estate tax, low sales tax, and world-class trust laws makes it one of the most genuinely low-tax states in the country.

7. Tennessee

Income tax: 0%. Tennessee previously taxed interest and dividend income under the Hall Income Tax. This tax was phased out and fully repealed effective January 1, 2021. Tennessee now has no income tax of any kind.

Sales tax: 7% state rate — one of the highest state-level sales tax rates in the country. Local jurisdictions add up to 2.75%, bringing the combined rate to as high as 9.75% in many areas. This is among the highest combined sales tax rates in the entire United States.

Estate tax: None. Tennessee repealed its estate tax (the inheritance tax) effective 2016.

Property tax: The statewide average effective rate is approximately 0.56%, which is low. Tennessee has relatively affordable property taxes compared to other states on this list.

Best for: Those wanting Southern living, the Nashville tech and music scene, or retirement in a no-income-tax state with warm weather and a low cost of living. Tennessee's combination of no income tax and low property taxes is offset by its very high sales tax, so it's best for people who save and invest more than they spend (retirees, high earners living modestly).

8. Texas

Income tax: 0%. No individual income tax. Like Florida, this is enshrined in the Texas Constitution.

Sales tax: 6.25% state rate, plus local taxes of up to 2%. The combined rate in most major cities is 8.25% (Houston, Dallas, San Antonio, Austin).

Estate tax: None. Texas does not impose a state-level estate or inheritance tax.

Corporate tax: No corporate income tax. Texas does have a Franchise Tax (also called the Margins Tax), but the first $2.47 million in revenue is exempt, and rates above that are modest (0.375% for retail/wholesale, 0.75% for other businesses).

Property tax: Relatively high. The statewide average effective rate is approximately 1.60%, among the highest in the country. Texas relies heavily on property taxes to fund local services, schools, and infrastructure. On a $400,000 home, that translates to roughly $6,400 per year in property taxes.

Best for: Business owners, families wanting big-city amenities, and those in the energy, tech, or aerospace industries. Texas offers major metropolitan areas (Houston, Dallas-Fort Worth, Austin, San Antonio), a diversified economy, and no corporate income tax. The trade-off is high property taxes, which are a significant cost for homeowners.

9. Washington

Income tax: 0% on wages and salary. However, Washington enacted a 7% capital gains tax on the sale of stocks, bonds, and other capital assets with long-term gains exceeding $262,000 (2025 threshold, adjusted annually for inflation). This was upheld by the Washington Supreme Court in March 2023 as an "excise tax" rather than an income tax. Retirement account distributions, real estate sales, and certain small business exclusions are exempt.

Sales tax: 6.5% state rate, plus local taxes of up to 4%. The combined rate in Seattle is 10.25%, making it one of the highest in the country. The statewide average combined rate is approximately 9.29%.

Estate tax: Washington has a state estate tax. The exemption threshold is $2.193 million (2025). Estates above this amount are taxed at rates from 10% to 20%. This is one of the lowest estate tax exemption thresholds of any state that imposes an estate tax.

Property tax: The statewide average effective rate is approximately 0.87%, which is moderate.

Best for: Wage earners who don't have large capital gains. If your income comes primarily from salary (not stock sales or investments), Washington is effectively a no-income-tax state. But if you're an investor, entrepreneur with significant equity, or have a large estate, the capital gains tax and estate tax make Washington less attractive than other states on this list.

10. Wyoming

Income tax: 0%. No individual income tax of any kind.

Sales tax: 4% state rate, plus local taxes of up to 2%. The combined rate is modest — typically 5-6% in most areas.

Estate tax: None. Wyoming does not impose a state-level estate or inheritance tax.

Corporate tax: No corporate income tax.

Property tax: The statewide average effective rate is approximately 0.55%, which is low.

Cost of living: Generally low, though it varies by area. Wyoming has a small population (~577,000), wide open spaces, and a relatively low cost of living compared to coastal states. Housing is affordable in most areas outside of Jackson Hole.

Best for: Privacy, LLC formation, and the lowest overall tax burden. Wyoming is one of the top states for LLC formation (along with Delaware and Nevada) due to its strong privacy protections — Wyoming LLCs do not require the disclosure of member names. The combination of no income tax, no corporate income tax, no estate tax, low sales tax, and low property taxes makes Wyoming one of the most genuinely low-tax states in the United States.

11. Full Comparison Table

Here are all nine zero-income-tax states compared side by side.

12. Which Zero-Tax State Is Best for You?

The "best" state depends entirely on your situation. Here's a quick guide based on common profiles:

For digital nomads and expats

Florida or South Dakota. Both have the best domicile infrastructure in the country — established mail forwarding services, no minimum stay requirements, and straightforward processes for filing a Declaration of Domicile (FL) or establishing residency (SD). Florida has the added advantages of warm weather, major airports, and strong homestead protection. South Dakota is popular with full-time RVers and nomads who want the simplest possible process.

For retirees

Florida or Tennessee. Neither state taxes retirement income (because neither taxes any income), both have warm weather, and both have reasonable costs of living. Florida has better homestead protection and no sales tax on groceries. Tennessee has lower property taxes but higher sales taxes. If you're retiring with a paid-off home, Tennessee's low property taxes are attractive. If you're buying a new home, Florida's homestead exemption and Save Our Homes cap provide long-term value.

For business owners

Texas, Wyoming, or Nevada. All three have no corporate income tax (Texas has a modest Franchise Tax with a generous exemption threshold). Texas offers major metropolitan areas and a huge talent pool. Wyoming offers the lowest overall tax burden and strong LLC privacy. Nevada offers low property taxes and proximity to the West Coast.

For investors

Wyoming or South Dakota. Both have no income tax, no capital gains tax, no estate tax, and low taxes across the board. Avoid Washington if you have significant capital gains (the 7% CG tax on gains over $262,000 is material). Florida is also excellent for investors, with the added benefit of strong homestead and asset protection.

For lowest overall taxes

Wyoming or South Dakota. These two states consistently rank as having the lowest overall tax burdens in the country. No income tax, no corporate income tax, no estate tax, low sales tax, and moderate-to-low property taxes. If your primary goal is minimizing total taxes paid, these are the top choices.

13. How to Actually Move to a Zero-Tax State

Choosing a state is the easy part. The harder part is establishing domicile in a way that's legally defensible — especially if your former state has a high income tax rate and an aggressive tax authority (looking at you, California, New York, and New Jersey).

Here's the high-level process:

1. Choose your new state — based on the analysis above, pick the state that fits your lifestyle, business, and tax goals.
2. Establish a physical address — you need a real street address in your new state. For digital nomads, this usually means a mail forwarding service. Florida and South Dakota have the most options.
3. File a Declaration of Domicile (Florida) or equivalent documentation in your new state.
4. Get a driver's license in your new state and surrender your old one.
5. Register to vote in your new state.
6. Update your address everywhere — IRS (Form 8822), Social Security Administration, banks, brokerages, insurance, employer, passport (when renewed).
7. Sever ties with your old state — this is critical. Cancel old voter registration, update all accounts, and minimize physical presence in your former state.

For a complete, step-by-step walkthrough of this process, read our Florida Residency Guide — it covers everything from choosing a mailing address to filing your first tax return as a Florida resident.

14. Frequently Asked Questions

Which state has the lowest overall tax burden?

Wyoming and South Dakota consistently rank as the states with the lowest overall tax burden in the United States. Both have no income tax, no corporate income tax, no estate tax, and relatively low sales and property taxes. Alaska also ranks very low (no income tax, no sales tax), but its high cost of living offsets the tax savings for most people. The Tax Foundation's annual State Business Tax Climate Index regularly places Wyoming and South Dakota in the top 3.

Is Washington truly a no-income-tax state?

Yes, for wages and salary. Washington does not tax earned income. However, since 2022, Washington has imposed a 7% capital gains tax on the sale of stocks, bonds, and other capital assets with long-term gains exceeding $262,000 (2025 threshold, indexed for inflation). This was upheld by the Washington Supreme Court in 2023 as an "excise tax" rather than an income tax. If you have significant investment gains, Washington is not fully tax-free. Retirement account distributions, real estate sales, and certain small business exits are exempt from this tax.

Did New Hampshire eliminate its income tax?

Yes. New Hampshire previously taxed interest and dividend income at 5% under its Interest & Dividends Tax. The state legislature passed a phased repeal, reducing the rate by 1% per year starting in 2023. The tax was fully repealed effective January 1, 2025. New Hampshire now has no income tax of any kind. Combined with its lack of sales tax, New Hampshire is now one of only two states (along with Alaska) that have neither an income tax nor a state sales tax.

Can I establish residency in any of these states without living there?

It depends on the state. Florida and South Dakota have the easiest processes with no minimum stay requirement. You can establish domicile by getting a mailing address, filing the appropriate documents, obtaining a driver's license, and registering to vote. However, "establishing domicile" and "being physically present" are different things. Your former state may challenge your domicile change if you don't genuinely intend to make the new state your permanent home. The IRS and state tax authorities look at the totality of your circumstances — where you spend the most time, where your family lives, where your belongings are, where you're registered to vote, and where your financial and social ties are strongest.

Do these states make up for no income tax with higher other taxes?

Some do. Tennessee has a combined sales tax rate of up to 9.75% — among the highest in the nation. Washington has combined sales tax rates exceeding 10% in Seattle and a 7% capital gains tax. Texas and New Hampshire have relatively high property taxes (~1.6% effective rate). However, Wyoming and South Dakota have low taxes across the board — they are genuinely low-tax states, not states that simply shift the burden to a different type of tax. Florida also strikes a good balance, with moderate sales and property taxes.

Which zero-tax state is easiest to establish domicile in?

Florida and South Dakota are the most popular choices and have the most streamlined processes. Both have well-established mail forwarding and virtual address industries specifically catering to digital nomads, full-time RVers, and expats. Florida requires filing a Declaration of Domicile with the county clerk. South Dakota requires spending one night in the state and obtaining a mailing address. Neither has a minimum stay requirement for maintaining domicile. Between the two, Florida is more popular due to its warm weather, major airports, and broader appeal, but South Dakota's process is slightly simpler.

This guide is for informational purposes only and does not constitute tax or legal advice. Tax laws change frequently and individual circumstances vary. The tax rates and rules described are based on information available as of early 2025. Always consult a qualified tax professional before making decisions about your state residency or domicile.