If you've seen "9 states with no income tax" repeated across dozens of articles, here's what most of them skip: one of those nine states doesn't quite belong on the list the same way the other eight do. Washington doesn't tax wages, but it does tax capital gains — and starting in 2028, it will tax high earners directly. That single distinction changes how you should actually think about this list if you're planning a move, retirement, or relocation for tax purposes.
This guide covers the full, accurate 2026 picture: which states genuinely have no individual income tax, why Washington gets grouped in anyway, what taxes replace income tax in each state, and the residency rules that actually determine whether moving saves you money at all. If you already read our broader states with no income tax overview, this guide goes deeper specifically on the 2026 technical distinctions and the changes taking effect through 2028.
Which States Have No Income Tax in 2026?
The commonly cited list of nine states associated with "no income tax" includes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
However, the Tax Foundation's 2026 classification draws a more precise line: eight states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming — have no individual income tax in the conventional sense. Washington is classified separately, because while it has no general wage tax, it does impose a capital gains tax on certain high-value investment income, and has enacted a new income tax on very high earners beginning in 2028.
This isn't just technical hairsplitting. If you're relocating specifically to avoid state income tax on investment gains, Washington's actual tax structure matters enormously to that decision — treating it as identical to Texas or Florida could lead to a real financial surprise.
Why Washington Needs Its Own Explanation
Washington's tax situation is the single most misunderstood entry on any "no income tax" list, so it deserves a clear, standalone explanation rather than a footnote.
Currently (2026): Washington has no general individual income tax on wages or salaries — that part of the popular claim is accurate. But Washington's Department of Revenue confirms the state does impose a capital gains tax, with a tiered structure: 7% on the first $1 million of taxable Washington capital gains, and 9.9% on amounts above $1 million, effective for tax year 2025 onward.
Starting January 1, 2028: Washington has enacted a new 9.9% individual income tax specifically for individuals and married couples filing jointly with annual adjusted gross income exceeding $1 million. This is a genuinely new development — not a continuation of an old tax — and it means Washington's "no income tax" status has an expiration date for high earners.
The accurate way to describe Washington's position, rather than the oversimplified version most articles use: Washington does not currently have a general individual income tax, but it does tax capital gains, and beginning in 2028, high earners above $1 million in annual income will face a new state income tax.
If your income or investment gains put you anywhere near these thresholds, verify the current rates directly against Washington's Department of Revenue before treating this state as tax-free for your specific situation.
New Hampshire and Tennessee: Two Important Historical Corrections
Two other states on this list carry outdated information that circulates constantly online, and both are worth correcting directly.
New Hampshire used to tax interest and dividend income specifically, even though it never taxed wages — a detail that made it a partial exception on "no income tax" lists for years. That's no longer the case: New Hampshire's Department of Revenue Administration confirms its Interest and Dividends Tax was fully repealed for taxable periods beginning after December 31, 2024. As of 2026, New Hampshire genuinely has no individual income tax of any kind.
Tennessee had a similar historical exception called the Hall Income Tax, which taxed interest and dividend income. Tennessee's Department of Revenue confirms this tax was repealed for tax periods beginning January 1, 2021 or later. If you're reading older content that still describes New Hampshire or Tennessee as taxing investment income, that information is outdated — both states are now fully free of individual income tax on any income type.
The Full List: State-by-State Summary
| State | Individual Income Tax | Key Notes |
|---|---|---|
| Alaska | None | No state sales tax either, though local sales taxes exist in some areas |
| Florida | None | No income tax on wages, retirement income, or investment income |
| Nevada | None | Relies heavily on tourism and gaming-related revenue |
| New Hampshire | None (as of 2026) | Interest/Dividends Tax fully repealed after Dec 31, 2024 |
| South Dakota | None | Confirmed directly by state Department of Revenue |
| Tennessee | None (as of 2026) | Hall Income Tax repealed for periods starting Jan 1, 2021+ |
| Texas | None | No corporate income tax either, though a franchise tax applies to some businesses |
| Washington | No general tax, but capital gains tax applies; new high-earner tax begins 2028 | Requires the most careful individual analysis |
| Wyoming | None | One of the most consistently tax-favorable states across categories |
"No Income Tax" Doesn't Mean "No Taxes" — Here's What Replaces It
This is the single most important thing to understand before treating any of these states as simply "tax-free." States still need revenue, and every state on this list raises money through other means:
- Sales taxes — several of these states, including Tennessee and Nevada, have relatively high combined state and local sales tax rates that partially offset the lack of income tax
- Property taxes — property tax rates vary significantly across this group, and a state with no income tax but high property taxes can still be expensive depending on your housing situation
- Excise taxes — taxes on specific goods like fuel, alcohol, or tobacco
- Business and franchise taxes — Texas, for instance, has no individual income tax but does apply a franchise tax to many business entities
- Tourism, resource, and gaming revenue — states like Nevada (gaming) and Alaska (oil and resource revenue) lean heavily on industry-specific revenue streams that reduce their need for broad-based taxation
For a full breakdown of how sales tax specifically varies across all states, including these nine, our guide on states with the highest and lowest sales tax is worth checking before assuming any of these states is automatically cheaper to live in overall.
Does No Income Tax Mean Lower Total Taxes? Not Necessarily
This is where a lot of casual "best states for taxes" content oversimplifies things in a way that can genuinely mislead people making a real relocation decision. A state having no individual income tax says nothing on its own about your total tax burden once property tax, sales tax, and other state and local taxes are factored in.
Someone earning a modest salary with minimal investment income might see a clear net benefit moving from a high-income-tax state to one of these nine. Someone with a large investment portfolio moving specifically to Washington to avoid capital gains exposure, on the other hand, might find the state's capital gains tax structure produces a meaningfully different outcome than expected.
The honest, accurate framing: no income tax is one input into your total tax picture, not the entire picture. Comparing your specific income sources, property value, and spending patterns against each state's full tax structure — not just the income tax line — is the only way to get an accurate answer for your situation.
No Income Tax States for Retirees: What Actually Matters
Retirees searching for tax-friendly states often care specifically about how retirement income — pensions, 401(k) withdrawals, and Social Security — gets treated, which is a slightly different question than general income tax status.
Since none of these nine states impose a general individual income tax, retirement income (pensions, retirement account withdrawals, Social Security benefits) generally isn't taxed at the state level in any of them — this is one of the more genuinely consistent benefits across the group, Washington's capital gains tax notwithstanding, since capital gains taxation is a distinct issue from standard retirement income taxation.
That said, retirees should still evaluate property tax rates specifically, since many retirees are homeowners on fixed incomes where property tax represents a larger relative burden than it would for a working-age earner. Some of these states offer specific property tax relief programs for seniors, which are worth researching at the state and county level rather than assuming a blanket exemption exists.
How State Tax Residency Actually Works
Simply owning property or spending part of the year in one of these states doesn't automatically mean you've established tax residency there — this is a genuinely common and costly misconception for people considering a move specifically for tax purposes.
The IRS explains that domicile generally refers to the state or place considered someone's permanent legal home, and multiple factors go into determining this beyond just physical presence:
- Where you register to vote
- Where your driver's license and vehicle registration are held
- Where you own or rent your primary residence
- Where you spend the majority of your time during the year
- Where your significant personal and financial ties are located (banking, healthcare providers, professional licenses)
Many states apply a general rule of thumb around spending more than half the year (often cited as 183 days) in a location as a factor supporting residency there, though the exact threshold and its weight varies by state and situation. If you're moving specifically to establish tax residency in one of these nine states while maintaining ties to your previous state, it's worth understanding that your previous state's tax authority may still consider you a resident there unless you've clearly and documentably shifted your primary ties — this is exactly the kind of situation where consulting a tax professional familiar with multi-state residency rules is worth the cost.
Practical Checklist for Establishing Residency
If you're relocating to one of these states specifically for tax reasons, a few concrete steps help establish clear, documented residency:
- Obtain a driver's license and register vehicles in your new state promptly after moving
- Register to vote in your new state
- Update your address with your bank, employer, and any professional licensing bodies
- Spend the majority of the year in your new state and keep records (travel receipts, credit card statements) that can document this if needed
- Sell or formally end your lease on your previous primary residence, rather than maintaining it as a lingering tie
- File a part-year or non-resident return in your previous state for the transition year, following that state's specific rules
Remote Workers: A Different Set of Considerations
If you're a remote employee relocating to one of these states while your employer remains based elsewhere, your situation involves an additional layer some states apply — sometimes called a "convenience of the employer" rule in certain jurisdictions, where your original state may still claim taxing rights over your income if your remote arrangement is considered a matter of your own convenience rather than your employer's necessity.
This rule doesn't apply universally, and its specifics vary significantly by state, but it's exactly the kind of detail that can undermine an otherwise straightforward relocation-for-tax-savings plan. Remote workers considering a move to one of these nine states should specifically verify whether their employer's home state applies any rule like this before assuming their income becomes fully exempt from their previous state's tax simply by moving.
Comparing the Big Three: Florida, Texas, and Nevada
These three states get compared constantly since they're the most commonly discussed relocation destinations among the nine, particularly for younger professionals and business owners. Rather than declaring one universally "best," here's how they genuinely differ:
Florida combines no income tax with a large, diverse economy and no state estate tax, making it broadly popular for retirees and remote workers alike, though property insurance costs in certain regions have become a significant factor worth researching separately from tax considerations.
Texas pairs no individual income tax with a notable business tax feature: while there's no personal income tax, Texas does apply a franchise tax to many business entities, which matters specifically if you're relocating a business rather than just personal residency.
Nevada relies heavily on tourism and gaming revenue to fund state operations, which has historically kept its income tax position stable, though its property tax and sales tax structure should be compared directly against your specific spending and homeownership situation.
None of these three is objectively "the cheapest" across every scenario — the right comparison depends on your income sources, whether you own a business, your housing plans, and your spending patterns, not just the income tax line alone.
Common Misconceptions Worth Correcting
"These nine states are identical in their tax treatment." As covered throughout this guide, Washington specifically requires separate analysis due to its capital gains tax and upcoming 2028 high-earner tax.
"No income tax means the lowest overall tax burden." Sales tax, property tax, and other state and local taxes vary significantly across this group and can offset the income tax advantage depending on your specific situation.
"Moving to one of these states automatically ends my tax obligation to my previous state." Tax residency depends on documented, substantive ties to your new state, not simply owning property or spending some time there — your previous state may still claim residency-based taxing rights if you haven't clearly established your new domicile.
"New Hampshire and Tennessee still tax investment income." Both states fully repealed their historical taxes on interest and dividend income (New Hampshire after 2024, Tennessee from 2021 onward) — this information is outdated in a lot of still-circulating content.
Frequently Asked Questions
Which states have no income tax in 2026?
Eight states have no individual income tax in the conventional sense: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Washington is often included in casual lists but is classified separately because it taxes capital gains and will introduce a new tax on high earners in 2028.
Does Washington really have no income tax?
Washington has no general individual income tax on wages, but it does impose a capital gains tax on certain high-value investment gains, and beginning January 1, 2028, it will apply a 9.9% income tax to individuals and married couples with adjusted gross income above $1 million.
Do no income tax states have other taxes?
Yes. All nine states raise revenue through other means, including sales taxes, property taxes, excise taxes, and in some cases business or franchise taxes — none of them are entirely tax-free.
Is New Hampshire still considered a partial-tax state?
No, not as of 2026. New Hampshire's Interest and Dividends Tax was fully repealed for taxable periods beginning after December 31, 2024, making it a complete no-income-tax state on wages and investment income alike.
Can I avoid state income tax by simply moving?
Not automatically. Tax residency depends on establishing genuine, documented ties to your new state — voter registration, driver's license, primary residence, and time spent there — not just intent or property ownership. Your previous state may still claim taxing rights if these ties aren't clearly established.
Do retirees pay less tax in no income tax states?
Generally, retirement income like pensions and Social Security isn't subject to state income tax in any of these nine states, though property tax rates and other state-specific factors should still be evaluated based on your individual retirement income and housing situation.
Will Washington have an income tax in the future?
Yes, specifically for high earners. Washington's enacted legislation introduces a 9.9% individual income tax beginning January 1, 2028, for individuals and married couples filing jointly with annual adjusted gross income exceeding $1 million.
The Bottom Line
The "9 states with no income tax" framing is useful shorthand, but the accurate 2026 picture requires treating Washington as a genuine exception rather than lumping it in with the other eight — its capital gains tax and upcoming 2028 high-earner tax mean it functions differently depending on your specific financial situation. Beyond that single distinction, remember that no income tax never means no taxes at all: sales tax, property tax, and residency rules all matter just as much as the headline income tax status when you're actually comparing states or planning a move.
Last verified: September 2026. State tax laws, rates, thresholds, and residency rules can change. Verify current requirements with the relevant state Department of Revenue and the IRS before making tax or relocation decisions.
If you want to see exactly how your specific income compares across states before making a decision, run your numbers through the US State Income Tax Calculator, and pair it with our broader guide on federal vs. state income tax in the USA to understand the fuller picture of what you'll actually owe wherever you land.