• Mortgages
    Compare Lenders
    • Mortgage rates
    • Refinance rates
    • Mortgage lender reviews
    Use Calculators
    • Mortgage calculator
    • How much house can you afford?
    • Mortgage refinance calculator
    • Mortgage payment calculator
    • Amortization calculator
    • All mortgage calculators
    Get Advice
    • Reverse mortgages
    • Home buying guide
    • Refinance your mortgage
    • First-time homebuyer tips
    • FHA loans
  • Banking
    Compare Accounts
    • CD rates
    • No Penalty CD
    • Savings accounts
    • Money market accounts
    • Checking accounts
    • Bank ratings
    Use Calculators
    • Savings calculator
    • CD calculator
    • Compound savings calculator
    • All banking calculators
    Get Advice
    • How to save money
    • Federal Reserve news
    • What is a money market account?
    • Which certificate of deposit account is best?
    • How to open a savings account
    • Credit union basics
    Bank Reviews
    • Capital One Bank
    • Marcus by Goldman Sachs
    • American Express National Bank
    • CIT Bank
    • Synchrony Bank
    • Barclays Bank
  • Credit Cards
    Compare by Category
    • Best Credit Cards of 2019
    • Rewards
    • Travel
    • Airline
    • Cash Back
    • No Annual Fee
    • Balance Transfer
    • 0% APR
    • Business
    • Student
    Compare by Credit Needed
    • Excellent Credit
    • Good Credit
    • Fair Credit
    • Bad Credit
    • No Credit History
    • Secured Credit Cards
    Compare by Issuer
    • American Express
    • Bank of America
    • Capital One
    • Chase
    • Citi
    • Discover
    • Wells Fargo
    Get Advice
    • Credit Card Reviews
    • Credit Card Payoff Calculator
    • Balance Transfer Calculator
    • All Credit Card Calculators
  • Loans
    Compare Lenders
    • Personal loan rates
    • Auto loan rates
    Loan Types
    • Personal loans
    • Auto loans
    • Debt consolidation loans
    • Home improvement loans
    • Student loans
    • Medical loans
    • Bad credit loans
    Use Calculators
    • Loan calculator
    • Auto loan calculator
    • Personal loan calculator
    • Auto refinance calculator
    • Loan payment calculator
    • Student loan calculator
    • All calculators
    Get Advice
    • Student loans guide
    • Refinancing student loans
    • Refinancing personal loans
    • Refinancing auto loans
    • How to get a personal loan
    • Personal loan origination fees
  • Investing
    Compare
    • IRA CD rates
    • Brokerage accounts
    • Brokerage reviews
    Use Calculators
    • Investment calculator
    • Annuity calculator
    • 401(K) calculator
    • Roth IRA calculator
    • All retirement calculators
    • All investing calculators
    Brokerage Reviews
    • WellsTrade Review
    • Robinhood Review
    • Merrill Edge Review
    • Vanguard Review
    • Fidelity Review
    • E*Trade Review
    Get Advice
    • Creating passive income
    • Mutual fund vs. ETF
    • Roth IRA vs. traditional IRA
    • What type of CD is best?
    • IRA basics
  • Home Equity
    Compare Lenders
    • Home equity loan rates
    Use Calculators
    • Should you borrow from Home Equity
    • HELOC Calculator
    • Debt consolidation calculator
    • HELOC payoff calculator
    • All home equity calculators
    Get Advice
    • What is a home equity loan?
    • HELOC vs. Home equity loan
    • Consolidate your debt using home equity
    • Home equity loans with bad credit
  • Personal Finance
    Compare
    • Current interest rates
    • Compare rates
    Use Calculators
    • Debt consolidation calculator
    • Net worth calculator
    • Personal finance calculators
    • Cost of living calculator
    • All calculators
    Get Advice
    • Retirement advice
    • Debt management
    • Improve your credit score
    • Career resources
    • Tax advice
    • Insurance basics
    • Real estate tips
    • Personal finance glossary
  • Free credit report
  • Sign In
  • Dashboard
  • Full Credit Report
  • Alerts
  • Settings
  • Support
  • Logout
Share

These states have no income tax

Kay Bell @taxtweet
October 9, 2018  in  Taxes

1 of 10

Welcome to Texas sign
ESB Professional/Shutterstock

It’s aggravating enough having to pay federal income taxes. Paying additional income tax to the state is even more annoying. 

If you live in California, Oregon, Minnesota or New York, you’ll pay some of the steepest income taxes in the nation.   

These nine states, however, have no state income tax as of 2018. 

The Bankrate Daily

2 of 10

Welcome to Alaska sign
Ingo70/Shutterstock

Alaska

The Last Frontier has no state income tax or sales tax, but it does allow some municipalities to levy sales taxes. Alaska’s coal mining and oil drilling operations bring in big tax revenues, however. Despite the state’s light tax burden, it is an expensive place to live, mostly because it is so remote. 

3 of 10

Welcome to Florida
Ingo70/Shutterstock

Florida

In the absence of an income tax, the Sunshine State relies heavily on sales taxes and property taxes. Florida is a popular tax and retirement haven, but the cost of living is above average. 

If you’re considering buying a second home, check out mortgage rates at Bankrate.

4 of 10

Welcome to Nevada sign
Alizada Studios/Shutterstock

Nevada

No need for an income tax in Nevada. The Silver State’s treasury collects half its revenue from above-average sales taxes and fees, much of it gambling-related. Las Vegas, for example, has a combined state, county and city sales tax of 8.25 percent. 

5 of 10

Welcome to New Hampshire sign
Joseph Sohm/Shutterstock

New Hampshire

The Granite State doesn’t tax wage income and it has no sales tax, but it does collect a 5 percent tax on income and dividends that exceed $2,400 per individual annually, or $4,800 for joint filers. Some exemptions are available for elderly, blind and disabled residents.

6 of 10

Welcome to South Dakota
Ingo70/Shutterstock

South Dakota

Not only does the Mount Rushmore State not collect income taxes, its sales tax is only 4.5 percent, one of the lowest in the country. But municipalities can collect up to 2 percent on top of that. The state’s Department of Revenue collects a variety of “special” taxes, such as excise taxes on cigarettes, bank franchise taxes, and even a license fee for coin-operated laundromats.

7 of 10

Welcome to Tennessee
esfera/Shutterstock

Tennessee

Residents of the Volunteer State don’t have to pay state taxes on their wages. Tennessee does tax dividends and interest, but that tax, known as the “Hall Tax,” is being phased out and will be eliminated entirely by the 2022 tax year. The investment tax for 2018 is 3 percent. The state began collecting online sales taxes in July. 

8 of 10

Welcome to Texas sign
Ingo70/Shutterstock

Texas

The Lone Star State does not have an income tax, but it does levy a state sales tax of 6.25 percent, and local jurisdictions can levy up to 2 percent in additional taxes, for a combined rate of 8.25 percent.  

9 of 10

Welcome to Washington sign
J.D.S/Shutterstock

Washington

The Evergreen State remains in the no-income-tax fold, but it ranks fifth highest in the nation for sales taxes. A 6.5 percent state sales tax combined with city and/or municipal sales-tax rates that can hit as high as 3.9 percent combine for a whopping sales tax of potentially 10.4 percent. Washington, the home state of Amazon, began collecting online sales taxes on Oct. 1.

10 of 10

Welcome to Wyoming
Ingo70/Shutterstock

Wyoming

In addition to having no personal state income tax, the Equality State levies no corporate income tax. It does have a 4 percent sales tax and an average local sales tax of 1.46 percent, for a combined average sales tax rate of 5.46 percent.   

Thinking of buying a house? Learn six ways to slash your mortgage costs.

 

You may also like

  • 2017 tax brackets

  • Capital gains tax rates

  • Teen jobs and taxes

  • How are 401(k) withdrawals taxes

  • State with no income tax: Better or worse?

  • Homeowners get a big tax break when they sell: A capital gains tax exclusion

Related Articles

  • How to get a tax deduction for charitable donations

  • 3 painful tax penalties and how to avoid them

  • Here’s how to get a tax deduction for charitable giving

  • Do you have to file taxes? The answer depends on your age, income and filing status

  • Follow these IRA withdrawal rules or pay a hefty tax penalty

  • About Us
  • Press Room
  • Affiliate Center
  • Contact Us
  • Careers
  • Advertise With Us
  • Latest News
  • Popular Topics
  • Glossary
  • Compare Rates
  • Bank Reviews
  • Understand Bankrate's Averages
  • Privacy Policy / Your California Privacy Rights
  • Terms of Use
  • GLBA Annual Notice
  • Licenses
  • Sitemap
How we make money

Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.

Maximize Your Money. Get Expert Advice & Tools. Master Life's Financial Journey.

You have money questions. Bankrate has answers. Our experts have been helping you master your money for four decades.

Our tools, rates and advice help no matter where you are on life’s financial journey.

Follow Us

© 2019 Bankrate, LLC All Rights Reserved.

United States United Kingdom