What States Have No Income Taxes at All 2025?

Imagine a world where your paycheck isn’t nibbled at by state income taxes. Sounds dreamy, right? Well, for residents of certain states, it’s a reality. As of now, nine U.S. states have no state income tax:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Living in these states means you won’t pay a dime in state income taxes, allowing you to keep more of your hard-earned money.

What Is State Income Tax?

State income tax is a tax levied by individual states on the income earned by residents and, in some cases, non-residents who earn income within the state. The rates and rules vary widely across states, and some states, as we’ve seen, don’t impose this tax at all.

What Does It Mean to Live in a State with No Income Tax?

Living in a state without income tax can feel like a financial breath of fresh air. You get to keep more of your paycheck, which can be especially beneficial for high earners. However, it’s essential to note that these states might compensate for the lack of income tax by imposing higher sales or property taxes.

Pros and Cons of Living in a State With No Income Taxes

Pros:

• Increased Take-Home Pay: Without state income tax, your paycheck is heftier.
• Simplified Tax Filing: One less tax form to worry about during tax season.
• Attractive for High Earners: The more you earn, the more you save.

Cons:

• Higher Other Taxes: States may have higher sales or property taxes to compensate.
• Potentially Fewer Public Services: Less tax revenue can mean fewer state-funded services.
• Cost of Living Variations: Some no-income-tax states have higher living costs.

What Are the Best States for Taxes?

When considering overall tax burden, including sales and property taxes, some states stand out:

• Alaska: Lowest overall tax burden.
• Wyoming: Low property and sales taxes.
• South Dakota: Favorable tax climate for businesses and individuals.

States like California and New York have higher overall tax burdens due to higher income and property taxes.

Which States Have the Highest and Lowest Income Tax?

While there are states are with no income tax, there are some which are the totally opposite:

Highest Income Tax Rates:

• California: Up to 13.3% for top earners.
• Hawaii: Up to 11%.
• New York: Up to 10.9%.

Lowest Income Tax Rates (among states that levy them):

• North Dakota: As low as 2.5%.
• Arizona: Flat rate of 2.5%.
• Indiana: Flat rate of 3.23%.

States With No Income Taxes

Down here is a proper look at the nine states without state income tax:

1. Alaska

• Sales Tax: No statewide sales tax. However, local municipalities can impose sales taxes up to 7.5%. For instance, Juneau has a 5% sales tax.
• Property Tax: Approximately 1.19%.

2. Florida

• Sales Tax: Statewide rate of 6.0%.
• Property Tax: Around 0.89%.

3. Nevada

• Sales Tax: State rate is 6.85%.
• Property Tax: Approximately 0.64%.

4. New Hampshire

• Sales Tax: No state sales tax.
• Property Tax: High, at about 2.20%.

5. South Dakota

• Sales Tax: Statewide rate of 4.2%.
• Property Tax: Approximately 1.32%.

6. Tennessee

• Sales Tax: State rate is 7.0%.
• Property Tax: Around 0.73%.