Nine U.S. states charge no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For a $100,000 earner, this can mean $3,000–$7,000 more in take-home pay annually compared to a high-tax state. But the full picture is more nuanced.
The Nine No-Tax States
| State | Sales Tax | Avg Property Tax Rate | COL Index |
|---|---|---|---|
| Texas | 6.25% + local (up to 8.25%) | 1.74% | 95 |
| Florida | 6% + local (up to 8%) | 0.97% | 100 |
| Washington | 6.5% + local (up to 10.4%) | 0.98% | 140 |
| Nevada | 6.85% + local (up to 8.37%) | 0.55% | 104 |
| Tennessee | 7% + local (up to 9.75%) | 0.67% | 92 |
| Wyoming | 4% + local (up to 6%) | 0.61% | 93 |
| Alaska | 0% state (local varies) | 1.22% | 127 |
| South Dakota | 4.5% + local (up to 6.5%) | 1.31% | 96 |
| New Hampshire | 0% on wages | 2.18% | 115 |
Where No-Tax States Win Clearly
For high earners ($150k+), the income tax savings in Texas or Florida are substantial — $8,000–$15,000 per year vs. California or New York — and property values are often lower, partially offsetting higher property tax rates. Remote workers who can choose their state have the most to gain.
Where the Math Gets Complicated
Washington State has no income tax, but Seattle's cost of living (COL 140) is significantly higher than Dallas (COL 95). A $90,000 salary in Seattle has roughly the same real purchasing power as a $61,000 salary in Dallas. The income tax savings of ~$6,000 don't close that $29,000 gap.
New Hampshire has no income tax on wages but has the highest average property tax rate in the country (2.18%). A $400,000 home costs ~$8,700/year in property taxes — more than most state income taxes on a $100,000 salary.
Verdict
No-tax states are genuinely advantageous for high earners, especially when combined with affordable cost of living (Tennessee, Wyoming, South Dakota). For middle earners in high-cost no-tax states (Washington, Nevada), the housing premium often outweighs the tax benefit. Always calculate total cost of living, not just income tax rate.