States With No Income Tax: The Full Picture Before You Move

Moving to a state with no income tax sounds like a straightforward win. And for many people, it is — especially high earners who can save tens or hundreds of thousands of dollars per year. But "no income tax" doesn't mean "no taxes," and the move itself creates risks that catch people off guard.

Your departure state has every financial incentive to argue you didn't really leave. States like New York, California, and New Jersey have dedicated audit teams that target high-income taxpayers who change their filing state. If you don't handle the transition correctly, you could end up paying taxes in both states.

This guide covers the full picture: which states have no income tax, what they charge instead, how the total tax burden actually compares, and — critically — how to make the move in a way that survives scrutiny from your old state.

1. The 9 States With No Income Tax

As of 2026, nine states impose no tax on earned income (wages, salaries, self-employment income):

State	Income Tax	Key Tradeoff
Alaska	None	No sales tax either; remote location, high cost of living
Florida	None	Higher property insurance; 6% sales tax
Nevada	None	Revenue from gaming; 6.85% sales tax
New Hampshire	None on wages*	Interest/dividend tax phased out; high property taxes
South Dakota	None	4.5% sales tax; low cost of living
Tennessee	None	Investment income tax fully phased out; 7% sales tax
Texas	None	High property taxes (among highest in the US)
Washington	None on wages*	7% capital gains tax on high earners; 6.5% sales tax
Wyoming	None	Revenue from mineral extraction; low population

*New Hampshire historically taxed interest and dividends at 5%, but this has been phasing out and is now fully eliminated. Washington has no traditional income tax but enacted a 7% tax on capital gains exceeding $250,000 (upheld by the state supreme court in 2023). For most wage earners, Washington is effectively no-income-tax.

2. State-by-State Breakdown

3. What They Charge Instead

No state operates without revenue. Here's how no-income-tax states compensate:

• Sales tax: Tennessee (7%), Washington (6.5%), Nevada (6.85%), and Texas (6.25%) all have above-average state sales tax rates. With local additions, effective rates in major cities often exceed 9%.
• Property tax: Texas and New Hampshire use property tax as their primary revenue tool, with rates roughly double the national average.
• Severance/extraction taxes: Alaska, Wyoming, and to a lesser extent Texas generate significant revenue from oil, gas, and mineral extraction.
• Tourism and gaming: Nevada and Florida benefit enormously from visitors paying sales taxes, hotel taxes, and gaming revenue. Residents effectively share the tax burden with tourists.
• Corporate taxes: Some no-income-tax states charge corporate franchise taxes or gross receipts taxes that indirectly affect residents through higher prices.

4. Comparing Total Tax Burden

Income tax is only one piece of the puzzle. Here's how the total state and local tax burden compares for selected states (as a percentage of income for a median household):

State	Income Tax	Sales & Excise	Property Tax	Overall Rank*
Alaska	None	Low	Moderate	Lowest burden
Wyoming	None	Low	Low	Very low
Florida	None	Moderate	Moderate	Low
Nevada	None	High	Low	Low
South Dakota	None	Low-Mod	Moderate	Low
Tennessee	None	High	Low	Low-Moderate
Texas	None	Moderate	High	Moderate
Washington	None*	High	Moderate	Moderate
New Hampshire	None	None (state)	Very High	Moderate

*Rankings are approximate and vary significantly based on income level, spending habits, and property ownership. High-income earners benefit most from no income tax. For someone earning $500,000+, the income tax savings from moving to Florida or Texas can easily outweigh any additional sales or property taxes. For middle-income earners, the math is closer.

5. Your Departure State Will Audit You

This is the part most "move to Florida" articles skip. If you're a high-income taxpayer leaving a high-tax state, your old state will fight to keep taxing you. Here's what you're up against:

States With Aggressive Residency Audit Programs

• New York: The most aggressive state for residency audits. Dedicated audit unit. Examines "near and dear" items (where you keep artwork, pets, family heirlooms). Known for auditing 3+ years of day counts. Requires demonstrating you left — not just that you arrived somewhere new.
• California: The Franchise Tax Board has a large residency audit team. They can claim you owe tax on worldwide income for any year you're considered a resident. Known for using "safe harbor" rules — if you're in California for more than 9 months, you're presumed to be a resident.
• Connecticut: Has significantly ramped up residency audits in recent years. Targets high earners moving to Florida.
• New Jersey: Conducts exit audits on high-income taxpayers who file their last resident return.
• Minnesota: Has a specific "exit tax" review process for departing residents.

The key insight: your departure state has every incentive to argue you didn't really leave. The tax revenue from one successful residency audit of a high-income individual can fund the entire audit program for a year. They are very good at this.

For a deep dive on what auditors examine and how to prepare, see our guide to proving state residency.

6. The Domicile Change Checklist

Successfully changing your domicile requires a clear, decisive, and comprehensive break from the old state. Half-measures will fail in an audit. Here's what needs to change:

7. Partial-Year Residency: The Year You Move

The year you change states is the most complex from a tax perspective. Most states require you to file as a part-year resident for the year of the move. Here's what that means:

• Two state returns. You'll typically file as a part-year resident in your departure state (for income earned through the move date) and as a part-year or full-year resident in your arrival state (for income earned after the move date).
• Income allocation. Wages are generally allocated based on where the work was performed. Investment income may be allocated based on your resident state at the time it was received. The rules vary.
• Move date matters. Document the exact date of your domicile change. This is typically the date you physically move to the new state with the intent to make it permanent — not the date you first visit, and not the date you sell your old home.
• Day counts still apply. Even as a part-year resident, your departure state may count your days after the move date. If you claim you moved to Florida on March 1 but spent 150 days in New York from March through December, that's a problem.

The first full calendar year after the move is arguably the most important. Auditors look closely at the first complete year to see if you genuinely live in the new state. Plan to spend as much time as possible there, especially in Year 1.

8. Common Traps When Relocating

1. "I changed my address" is not enough. Updating your mailing address while keeping your New York apartment, doctors, voter registration, and social life is the most common audit failure. Auditors call this "changing your filing address, not your domicile." They've seen it thousands of times.
2. Keeping the old home. If you maintain a home in the departure state that's larger, more expensive, or better furnished than your new home, auditors will argue that's your real residence. If you must keep the old home, consider converting it to a rental and having tenants — this weakens the state's argument that it's "available" to you.
3. Spending too many days back. Even after moving, spending 183+ days in the old state while maintaining any kind of abode there can trigger statutory residency. Many people move to Florida but keep returning to New York for months at a time. If your day count exceeds the threshold, you haven't effectively left.
4. Not tracking from day one. The first year after your move is when your departure state will scrutinize your records most closely. Start tracking your days in every state from the moment you decide to move, not after you've settled in.
5. Ignoring social media. Posting photos from your old city, checking in at your old gym, or tagging yourself at the old neighborhood restaurant — auditors check all of this. Be conscious of your digital footprint during and after the transition.
6. Not spending enough on "life" in the new state. Auditors look at the totality of your life. If your credit card bills show three times more spending in the old state than the new one, that undermines the claim. Build a genuine life in the new state: get a library card, join a gym, patronize local businesses.