2026 Study
States With No Income Tax: Cost of Living Comparison
9 US states charge zero state income tax on earned wages. But do the savings hold up when you factor in housing costs, property taxes, and sales taxes? We break it all down.
Data: 2023 Census ACS · Tax Foundation 2024 · Updated January 2026
Published January 1, 2026 · Updated April 25, 2026
The 9 No-Income-Tax States
Note: New Hampshire taxes interest and dividend income only. All others have no broad-based state income tax.
No-Income-Tax States: Full Comparison
Sorted by median home value (lowest first)
| State | Income Tax | Med. Home | Med. Rent | Med. Income | Prop. Tax | Sales Tax |
|---|---|---|---|---|---|---|
| South Dakota 485 cities | None | $236,800 | $912/mo | $72,421 | 1.2% | 6.1% |
| Tennessee 504 cities | None | $256,800 | $1,122/mo | $67,097 | 0.7% | 9.6% |
| Texas 1863 cities | None | $260,400 | $1,339/mo | $76,292 | 1.7% | 8.2% |
| Wyoming 205 cities | None | $285,100 | $968/mo | $74,815 | 0.6% | 5.3% |
| Florida 955 cities | None | $325,000 | $1,564/mo | $71,711 | 0.9% | 7.0% |
| Alaska 355 cities | None | $333,300 | $1,388/mo | $89,336 | 1.0% | 1.8% |
| New Hampshire 100 cities | None | $367,200 | $1,423/mo | $95,628 | 2.1% | — |
| Nevada 133 cities | None | $406,100 | $1,489/mo | $75,561 | 0.6% | 8.2% |
| Washington 639 cities | None | $519,800 | $1,682/mo | $94,952 | 1.0% | 9.2% |
Sources: 2023 Census ACS 5-Year Estimates, Tax Foundation 2024 State Tax Competitiveness Index.
States With the Highest Income Tax (for contrast)
Top 10 highest state income tax rates
| State | Top Tax Rate | Med. Home | Med. Income |
|---|---|---|---|
| California | 13.3% | $695,400 | $96,334 |
| Hawaii | 11.0% | $808,200 | $98,317 |
| New York | 10.9% | $403,000 | $84,578 |
| District of Columbia | 10.8% | $724,600 | $106,287 |
| New Jersey | 10.8% | $427,600 | $101,050 |
| Oregon | 9.9% | $454,200 | $80,426 |
| Minnesota | 9.8% | $305,500 | $87,556 |
| Massachusetts | 9.0% | $525,800 | $101,341 |
| Vermont | 8.8% | $290,500 | $78,024 |
| Wisconsin | 7.7% | $247,400 | $75,670 |
Frequently Asked Questions
Which states actually have no state income tax?
South Dakota, Tennessee, Texas, Wyoming, Florida, Alaska, New Hampshire, Nevada, Washington. New Hampshire taxes interest and dividend income but not earned wages; all others collect zero on earned income.
Is the no-income-tax thing oversold?
Often, yes. The states without income tax don't generate revenue from nothing — they recover it through property tax, sales tax, fees, or some combination. Texas's effective property tax rate of ~1.6% routinely costs homeowners more annually than the income tax they'd pay in a moderately-taxed state. Tennessee and Florida offset partly through high sales taxes. Washington has a hybrid mix. The "no income tax" headline obscures more than it reveals.
Who actually benefits from moving to a no-income-tax state?
High-W2-income earners who don't plan to buy expensive homes — and remote workers especially. Someone making $300K/year who rents in Texas captures the full income-tax savings without absorbing the property-tax counterweight. Someone making $80K and buying a $400K home in Texas roughly breaks even versus most income-tax states.
Why are home prices so different across no-income-tax states?
Geography and supply, mostly. Tennessee, Florida (most counties), and Texas have abundant land and growing populations — prices rose but remained accessible. Washington (Seattle gravity) and Nevada (constrained supply around Las Vegas/Reno) hit a different ceiling. The average median home value across the 9 no-income-tax states is $332,278, but the spread between cheapest and most expensive is roughly $283,000.
Should I make a decision based on income tax alone?
No. The first question should be: why are you actually moving? If the answer is "tax savings", the realistic savings on most middle-income households are smaller than people expect once you factor property tax, sales tax, and the often-thinner labor markets in lower-tax states. If the answer is "career opportunity, climate, family, lifestyle," then tax structure becomes one of several inputs, not the deciding one.
Are there hidden costs I should look for?
A few that catch movers off guard: sales tax can hit 9-10% combined in Tennessee; property reassessments in Texas can push tax bills up faster than home appreciation; vehicle registration and inspection fees vary widely; and homeowner's insurance in Florida (and increasingly the Gulf Coast) has roughly doubled in 5 years and shows no sign of stabilizing. None of these are dealbreakers individually but together they can erase a meaningful portion of the income-tax win.