No Income Tax States: Should You Move to Save Money?
Moving to Florida or Texas sounds like a tax haven. But governments always get their money somehow. Here are the 9 states with zero income tax and the “hidden taxes” you need to watch out for.
States
9
No Income TaxList
The Catch
Property
Higher RatesWarning
Savings
~$6.5k
On $150k SalaryProfit
The Hidden Cost: California vs. Texas
“I’m moving to Texas to save money!” …Wait until you see your property tax bill. Let’s compare the burden for a family earning $150,000.
| Category | California (High Tax) | Texas (No Tax) |
|---|---|---|
| State Income Tax | ~9.3% | 0% |
| Property Tax (Avg) | ~0.7% | ~1.8% |
| Sales Tax (Avg) | 8.8% | 8.2% |
| Net Result | Pays More | Pays Less |
The Verdict
If you earn a high salary but rent a home, Texas wins easily.
If you are retired with low income but own a $1M mansion, California might actually be cheaper due to Prop 13 (low property tax).
Annual Tax Bill ($150k Income)
| Scenario | Best State |
|---|---|
| Remote Worker | Florida / Texas |
| Business Owner | Wyoming / Nevada |
The “Zero Income Tax” Club (2026)
As of 2026, these 9 states do not levy a state income tax on wages.
- 🇺🇸 Florida (FL): The most popular for retirees. No tax on income, reasonable property tax, but high insurance costs.
- 🤠 Texas (TX): No income tax, but holds some of the highest Property Tax rates in the nation.
- 🎰 Nevada (NV): Funded by tourism/gambling taxes. High sales tax, but low property tax.
- 🏔️ Wyoming (WY): Arguably the most tax-friendly state overall (low property & sales tax), funded by oil/mineral revenue.
- 🌧️ Washington (WA): No income tax (except on high capital gains), but very high gasoline and sales taxes.
- 🎸 Tennessee (TN): Low cost of living, high sales tax.
- ❄️ South Dakota (SD): Very business-friendly, low taxes across the board.
- 🧊 Alaska (AK): They actually pay you to live there (Permanent Fund Dividend), but cost of goods is high.
- 🍁 New Hampshire (NH): No tax on wages. (Tax on interest/dividends is fully phased out by 2027).
Don’t Fake It (The 183-Day Rule)
You cannot just buy a P.O. Box in Florida and claim you live there while staying in New York. High-tax states (NY, CA) aggressively audit people who “move.”
How to Prove You Moved
- Physical Presence: Spend >183 days in the new state.
- The “Teddy Bear” Test: Where are your prized possessions? (Pets, family photos, heirlooms).
- Paper Trail: Change your Driver’s License, Voter Registration, and Primary Doctor immediately.
Pro Tip: The “Closer Connection” Test
It is not just about counting days (183 days). Auditors look for a “Closer Connection.”
If you keep your dentist, country club membership, and expensive cars in New York while renting a small apartment in Florida, New York will win.
You must “leave” your old state as fully as you “arrive” in the new one.
Frequently Asked Questions
Does “No Income Tax” mean “No Federal Tax”?
NO. You still have to pay Federal Income Tax to the IRS regardless of where you live. This only saves you the State portion (usually 3% – 13%).
Is it good for retirees?
Generally, yes. States like Florida don’t tax Social Security or 401(k) withdrawals. However, watch out for Estate Taxes (Washington has one).