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Which states have no state income tax?

While the majority of states have an income tax ranging from less than 1% to as high as 10% or more, there are five states that have no income tax, plus another two that only tax certain types of investment income. These states are Alaska, Florida, Nevada, Texas, Washington, Wyoming, and South Dakota. People living in these states only have to pay the Federal income tax. Tennessee and New Hampshire only tax dividend income.

While each state must generally make up for the lost revenue through some other avenue (like sales taxes or property taxes), the lack of an income tax can make these states particularly attractive to retirees or others looking to minimize their income tax bill.

List of States With No Personal Income Taxes


Along with New Hampshire (which only taxes dividends), Alaska is one of the only states that has no income tax as well as no sales tax. Most of the state's revenues come from petroleum resources, which have also allowed Alaska to pay its citizens a five-figure dividend from the Alaska Permanent Fund every year since the 1980s.


Florida has no personal income tax, which contributes to its popularity with retirees. The state used to tax financial investments (like stocks and mutual funds), but this tax was repealed back in 2007.


Nevada has no state income tax, and also has no corporate income tax, makes the state popular with both businesses and retirees. Most of the state's revenue is derived from sales taxes and special taxes on the gambling and mining industries.


Texas has no state income tax, and the Texas Constitution places severe restrictions on passage of an individual income tax and the use of its proceeds. Most of the state's revenue comes from sales and income taxes, as well as a series of corporate income taxes.


Washington only collects an income tax on capital gains over $250,000, and makes up for lost revenue with a gross receipts tax on almost all businesses and a relatively high sales tax. The Capital Gains income tax was introduced in WA in 2021.

Washington is located directly above Oregon, which by contrast has some of the highest personal income tax rates in the country.


Wyoming has no state income tax, and also has no corporate income tax. State revenue instead comes from sales taxes, property taxes, and other fees.

Some tourist-heavy cities in Montana do collect local sales taxes of 3%-7% on certain types of transactions, often including lodging and vehicle rentals.

South Dakota

South Dakota, has no personal income tax, but does have a corporate income tax. State revenue heavily relies on sales tax and property tax income.

List of States With Dividend-Only Income Taxes


Tennessee only collects income tax on qualifying investment, dividend, and interest income. Not all forms of investment and interest income are taxable. Interest earned on a bank account's balance, tax-free bonds, and most ordinary capital gains are exempt from the Tennessee income tax.

This means that while most taxpayers won't owe much (or any) income tax due to wages not being taxes, retirees who rely on dividend and interest income may have the heaviest tax exposure. Several exemptions do exist for retirees over age 65.

New Hampshire

New Hampshire only collects income tax on qualifying investment, dividend, and interest income. The tax only applies if you earn over a certain threshold of investment income. Most of the state's revenues come from property taxes.

Back to list of state income tax brackets
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