9 States With No Income Tax in 2025 (And What They Don't Tell You)
You've probably heard the pitch: "Move to Texas and keep more of your paycheck!" And yeah, it's true — kind of. Nine states charge zero state income tax, which sounds amazing until you realize some of them make up for it in ways that might surprise you.
Let's break down which states actually let you keep the most money, and which ones are quietly picking your pocket in other ways.
The Nine States With No Income Tax
Here's the full list:
Alaska — No income tax AND no state sales tax. The unicorn. They even pay YOU to live there through the Permanent Fund Dividend (around $1,300-$1,600/year). The catch? It's Alaska. Groceries cost a fortune, heating bills are brutal, and you're a long flight from anywhere.
Florida — The big one. No income tax, decent cost of living outside Miami, and year-round warm weather. This is why half of New York seems to move here every year. Sales tax is 6% plus local additions, and property taxes aren't cheap, but overall it's a genuinely good deal.
Nevada — No income tax, but Las Vegas has a 8.375% sales tax and the state leans hard on gaming and tourism taxes instead. If you're not gambling or staying in hotels, you come out ahead.
New Hampshire — No tax on wages or salary. They used to tax investment income but phased that out completely as of 2025. Property taxes here are among the highest in the country though — averaging over $5,000/year. So homeowners, do your math carefully.
South Dakota — No income tax, low cost of living, and property taxes are reasonable. Genuinely one of the best deals if you can handle the winters and don't mind living somewhere with a population smaller than most cities.
Tennessee — No income tax on wages since 2021. Sales tax is high at 7% (plus local), which hits lower earners harder. Nashville and Memphis are booming though, so job opportunities are strong.
Texas — No income tax, huge job market, relatively affordable housing outside Austin and Dallas. Property taxes are the gotcha — they average around 1.6-1.8% of home value, which on a $350K house is over $5,600/year. Renters don't feel this directly, making Texas especially attractive if you're renting.
Washington — No income tax, strong tech job market (Amazon, Microsoft, Boeing). But it's expensive to live here, and sales tax runs 6.5-10.25% depending on where you are. Also just passed a capital gains tax on investment income over $250K.
Wyoming — No income tax, no corporate income tax, low sales tax (4%), and low property taxes. Truly the most tax-friendly state in America. Population: roughly 580,000. So... there's that.
Here's What Actually Matters
Saving 5% on state income tax sounds great, but it's meaningless if your rent is $800/month higher or property taxes eat the difference. The real question is: what's your total cost of living after ALL taxes?
Let's make it real. Say you earn $75,000/year.
In Texas, you'd take home roughly $61,149 — no state tax, straightforward.
In California, that same $75K nets you about $56,842 — that's $4,307 less per year, or about $359/month.
But here's the thing: if you're comparing Dallas to San Francisco, the rent difference alone could be $1,500-$2,000/month. The state tax savings are almost irrelevant compared to housing costs.
On the other hand, if you're comparing Dallas to Houston (both in Texas, both no income tax), the savings are identical and your decision comes down to other factors entirely.
The Real Winners
If you're renting and earning a solid salary, Texas and Florida are hard to beat. You get the no-income-tax benefit without the property tax sting.
If you're buying a home, look harder at Wyoming, South Dakota, or Tennessee where property taxes are also reasonable.
If you're a high earner ($200K+), the savings from no state income tax become massive. Someone earning $200K in California pays roughly $13,000+ in state income tax alone. Move to Texas and that's $13K back in your pocket every year. At that income level, it's a real lifestyle difference.
The Bottom Line
No income tax is a genuine advantage, but it's one piece of a bigger puzzle. Run your actual numbers for your specific salary and situation before making any moves.
Calculate your take-home pay in any state →