States with no income tax: what it means for your take-home pay

If you're weighing a job offer in Texas, Florida, Washington or another state that doesn't tax wages, this guide shows you which states really qualify, what the exceptions are, and how to work out whether the offer leaves you with more money at the end of the month. Short version: no state income tax raises your take-home pay, but price levels, sales and property taxes, and where you physically do the work can cancel part or all of that gain.

Each state's status below was checked against its own revenue department (or, where noted, the closest official page we could load) on October 28, 2026.

Quick reference: states that don't tax wages

Nine states do not tax wage income. They don't all count the same way, which is why you'll see lists of seven, eight or nine elsewhere. South Dakota's Department of Revenue, for example, still describes itself as one of seven states without a state income tax, a count that dates from before New Hampshire and Tennessee finished repealing their taxes on interest and dividends.

One line worth repeating: "no income tax" means no tax on your salary. It doesn't mean no tax.

States with narrow exceptions

Three of the nine have, or recently had, a tax that touches some kind of personal income. None of them reaches a regular paycheck today, but they matter if you have investments or a high income.

Washington: capital gains, and a new tax on very high earners

Washington's capital gains tax was created by the 2021 legislature at a rate of 7% on the sale of long-term capital assets such as stocks, bonds and business interests. Real estate and assets held in certain retirement accounts are exempt. The state gives a large standard deduction, adjusted for inflation each year: $278,000 for 2025, per individual, couple or domestic partnership.

Starting with tax year 2025, the rate is tiered. According to the Department of Revenue's notice on the new rates, the first $1 million of taxable Washington capital gains is taxed at 7%, and gains above that are taxed at 9.9%.

Washington lawmakers have also passed a separate income tax aimed at very high earners. It is not yet in effect and faces a legal challenge, so if your household income is very high, check the Department of Revenue for its current status before you plan around it.

For most people taking a salaried job in Seattle or Spokane, none of this changes the math. Your wages aren't taxed by the state.

New Hampshire: the interest and dividends tax is gone

New Hampshire never taxed wages, but it used to tax residents' interest and dividend income at 3% above an exemption. The Department of Revenue Administration confirms the tax was repealed for tax periods beginning on or after January 1, 2025. Returns for 2024 and earlier years can still be audited and collected.

Tennessee: the Hall tax ended earlier

Tennessee's Hall income tax was a tax on certain investment income, not on wages. The Department of Revenue says it was phased out and fully repealed beginning January 1, 2021.

How to estimate the take-home difference between two offers

Here's the honest part: the state income tax line is only one of several that differ between two offers. Use this order so you don't overcount the savings.

1. Start with total pay, not base pay. Add any guaranteed bonus, sign-on bonus spread over the year, and typical overtime. A no-tax state doesn't change your bonus, but a bigger base elsewhere might outweigh the tax gap.
2. Hold federal taxes constant. Federal income tax, Social Security and Medicare are about the same on the same pay in any state. The main federal difference: if you itemize, you can deduct state and local taxes, and people in no-tax states can choose to deduct sales tax instead. Check IRS guidance for the current cap.
3. Calculate the state income tax on the other offer. Use that state's own rate schedule or withholding calculator from its revenue department. Don't rely on a single "top rate" from a headline; most states use brackets and deductions.
4. Add local income tax, if any. Some cities and counties tax wages on top of the state, for example New York City and many localities in Ohio, Pennsylvania and Michigan. Check the city or county where you'd work and where you'd live.
5. Add other payroll deductions. Some states take employee premiums for paid family leave, disability or long-term care. Washington is one of them: its paid family and medical leave and WA Cares long-term care programs are funded partly through paycheck deductions, so a Washington paycheck isn't entirely free of state deductions. Washington's Employment Security Department publishes the current premiums.
6. Adjust for prices. Divide your after-tax pay by the area's price index (see the next sections) to compare buying power.
7. Price your biggest fixed costs. Rent or a mortgage, property tax if you'll buy, car insurance and commuting costs can move more money than the income tax does.

A worked example (hypothetical)

Say you have two offers with the same base salary. Offer A is in a state with an income tax and a city wage tax. Offer B is in Texas.

• Steps 1-2: Same pay, so federal tax, Social Security and Medicare are essentially equal. No difference yet.
• Steps 3-4: Offer A loses its state tax plus the city tax. Offer B loses neither. Offer B is ahead.
• Step 5: Offer A's state also takes a family-leave premium. Offer B is further ahead.
• Step 6: You look up both areas on BEA's price index. If Offer B's metro scores higher than Offer A's, part of its tax advantage goes to higher prices.
• Step 7: You compare rent quotes and, if you'll buy, the property tax bill on a typical home in each area. In much of Texas, property taxes are a big line item, so this step can narrow the gap again.

The answer comes from your own numbers, not from the state's reputation. Sometimes the no-tax offer wins clearly. Sometimes the two land closer than you'd expect.

Other costs that offset the savings

States without a wage tax still have bills to pay, so they lean on other revenue. That shows up in what you pay day to day.

• Sales taxes. Several no-tax states rely heavily on sales tax, and cities and counties often add their own rate on top. Texas's Comptroller alone collects local sales taxes for more than 1,800 cities, counties and other local governments. Look up the combined rate where you'd actually live and shop.
• Property taxes. These are set locally and vary a lot from one county or school district to the next. If you plan to buy, get the actual tax bill for homes you'd consider, not a state average. Renters pay property tax too, indirectly, through rent.
• Business taxes. Texas has a franchise tax, Washington has a business and occupation tax, and Nevada's employers pay a Modified Business Tax and, above a revenue threshold, a Commerce Tax. These don't come out of your paycheck, but they're part of the cost of doing business there.
• Gaps in the other direction. New Hampshire has no general sales tax, and Alaska has no statewide sales tax, though some Alaska local governments charge one. In those places the tax savings can stack.

Sales and property tax rates change often and differ by address, so check the state and county sites rather than a ranking that may be out of date.

Price levels in no-income-tax states

A tax saving only matters if your money goes as far. The best official tool for comparing price levels across states is the Bureau of Economic Analysis's regional price parities, or RPPs. Think of an RPP as a price tag for an area: the national average is set at 100, so a state above 100 is more expensive overall than the US as a whole, and one below 100 is cheaper. The further from 100, the bigger the gap.

The latest figures are for 2024, from BEA's February 19, 2026 release. The next release is scheduled for December 10, 2026, so check for 2025 figures after that date.

None of the nine no-tax states is at the very top or bottom of BEA's 2024 list. They're spread across the middle, and the differences between metros inside a state are often bigger than the differences between states. Housing is where the gap is widest: BEA's 2024 index for housing rents ran from 154.3 in California down to 54.2 in West Virginia.

How to use it: take your estimated after-tax pay for each offer, divide by the RPP for that state or metro, and multiply by 100. The result is your pay in "national average" dollars. Using BEA's extremes as an illustration, the same paycheck goes roughly a quarter further at Arkansas's 2024 level than at California's.

Use the metro figure when you can. BEA publishes metro-area RPPs through its interactive data tables, and a job in Seattle or Austin can price very differently from the state average.

Working remotely across state lines: where you owe tax

This is where many people get surprised. Living in a no-tax state doesn't automatically mean your wages are untaxed. The general pattern works like this:

• Your home state can tax all of your income. If home is Texas or Florida, there's nothing to tax, so this part works in your favor.
• A state where you physically work can tax the wages you earn there. If you live in Vancouver, Washington, and commute to Portland, Oregon taxes your Oregon wages, and some Portland-area local income taxes can apply as well. A New Hampshire resident commuting to Massachusetts files a Massachusetts nonresident return.
• Your home state normally can't give you a credit, because it has no income tax to credit against. A resident of an income-tax state usually gets a credit for tax paid to another state; you don't need one, but you also can't use one.
• Some states tax remote workers based on the employer's location. New York is the best-known example of a "convenience of the employer" rule: if you work from home in another state for your own convenience rather than because the employer requires it, New York may treat those days as New York workdays. A few other states have similar rules.
• Business travel can count. Many states tax nonresidents who work there for even part of the year, with thresholds that vary by state.

Moving mid-year? You'll usually file a part-year resident return in the state you leave, and that state may look closely at whether you really changed your home. Keep proof of the move: lease or deed, driver's license, voter registration and where your car is registered.

Multistate situations can get complicated fast. If you'll split time between states, work remotely for an out-of-state employer, or move during the year, contact the revenue agency in each state involved or a tax professional before you file, and ideally before you accept the offer. Also tell your employer's payroll team where you actually work so they withhold for the right state.

Negotiating when the tax picture differs

Employers know the tax story too. Sometimes a company will point to the lack of state income tax to justify a lower offer. Sometimes you'll want to use it yourself. Either way, base the conversation on your numbers.

If an employer in a no-tax state offers less than you expected, don't accept the tax argument at face value. Run steps 1-7 above, then say something like:

"I appreciate that there's no state income tax here. When I add in housing and the other costs in this area, the offer comes out close to what I make now, not ahead. Is there room to move the base to [your number]?"

If you're moving from a no-tax state to a state with an income tax, it's fair to ask for pay that keeps your take-home whole:

"Moving from Texas means I'd start paying state income tax for the first time. To keep my take-home pay where it is, I'd need the base closer to [your number]. Can we get there?"

If the base can't move, ask about a sign-on bonus or relocation help instead.

Use posted ranges. Several states, including Washington, require many employers to include a pay range in job postings. If the posting has a range, anchor your ask inside it and explain why you belong in the upper half: experience, certifications or a competing offer.

Where to check your state's rules

Tax rules change, and the Washington high-earner tax is a reminder that "no income tax" isn't permanent. Before you rely on any list, including ours, check these sources:

• The state's revenue department. Start with the pages linked in the table above. The IRS keeps a directory of state government websites for small businesses that links to each state's tax agency.
• The city or county, for local income taxes, sales tax rates and property tax bills.
• The state labor or employment department, for payroll premiums such as paid family leave.
• BEA's regional data, for current price levels by state and metro.

What to do next

• Write down the total pay for each offer, then run the seven steps above using official calculators, not rules of thumb.
• Look up the 2024 RPP for each metro on BEA's site, and recheck after the December 10, 2026 release.
• Get real quotes for rent or property tax at the addresses you're considering.
• If any part of your work will cross state lines, call the state revenue agency or a tax professional before you sign.
• Then go back to the employer with a number and a reason. That's the conversation most likely to move your pay.

Browse more city-by-city pay comparisons in salaries by city, or get scripts for the offer stage in negotiation.