States with no income tax
Nine states charge zero income tax on wages. Here is what that actually means for your take home pay and overall cost of living.
Published May 22, 2026
Nine U.S. states charge no income tax on wages and salaries: South Dakota, Wyoming, Tennessee, Texas, Nevada, Alaska, New Hampshire, Washington, Florida. For workers earning the national average household income, the absence of state income tax can mean thousands of dollars more in take home pay each year.
But income tax is only one piece of the cost of living. Several no-income-tax states make up the missing revenue through higher property tax (Texas, New Hampshire), higher sales tax (Tennessee, Washington), or by relying on resource royalties (Alaska, Wyoming). This guide compares all nine on rent, household income, sales tax and total monthly cost, and shows which actually deliver lower overall cost of living and which only look cheaper on paper.
The nine states at a glance
Sorted by overall monthly cost (cheapest first). All figures are state averages.
- South Dakota $2,562/moRent$728/mo Income$66,926/yr Sales6.10% 11% below the national averageSouth Dakota 6.10% $728/mo $66,926/yr $2,562/mo 11% below the national average
- Wyoming $2,615/moRent$790/mo Income$73,360/yr Sales5.36% 9% below the national averageWyoming 5.36% $790/mo $73,360/yr $2,615/mo 9% below the national average
- Tennessee $2,734/moRent$925/mo Income$58,994/yr Sales9.55% 5% below the national averageTennessee 9.55% $925/mo $58,994/yr $2,734/mo 5% below the national average
- Texas $2,754/moRent$905/mo Income$64,737/yr Sales8.19% 4% below the national averageTexas 8.19% $905/mo $64,737/yr $2,754/mo 4% below the national average
- Nevada $3,004/moRent$1,080/mo Income$75,206/yr Sales8.23% 4% above the national averageNevada 8.23% $1,080/mo $75,206/yr $3,004/mo 4% above the national average
- Alaska $3,028/moRent$1,140/mo Income$79,407/yr Sales1.82% 5% above the national averageAlaska 1.82% $1,140/mo $79,407/yr $3,028/mo 5% above the national average
- New Hampshire $3,042/moRent$1,002/mo Income$86,520/yr Sales0.00% 6% above the national averageNew Hampshire 0.00% $1,002/mo $86,520/yr $3,042/mo 6% above the national average
- Washington $3,049/moRent$1,157/mo Income$76,363/yr Sales10.23% 6% above the national averageWashington 10.23% $1,157/mo $76,363/yr $3,049/mo 6% above the national average
- Florida $3,061/moRent$1,216/mo Income$65,468/yr Sales7.01% 6% above the national averageFlorida 7.01% $1,216/mo $65,468/yr $3,061/mo 6% above the national average
State-by-state breakdown
Detailed look at each no-income-tax state, ordered from cheapest to most expensive.
1. South Dakota
Combined sales tax 6.10%. Average monthly cost $2,562 (11% below the national average).
The average monthly cost for a single person in South Dakota is $2,562, which is 11% below the national average. Average one-bedroom rent across the state's 66 counties is $728/mo, and average household income is $66,926/yr.
South Dakota has no income tax, low property tax by national standards, and a state sales tax with modest local additions. Combined with a low average cost of living, the state offers one of the most tax-friendly combinations in the country.
Sioux Falls, the largest metro, has become a regional financial services hub thanks to favorable banking law. The state is otherwise rural.
2. Wyoming
Combined sales tax 5.36%. Average monthly cost $2,615 (9% below the national average).
The average monthly cost for a single person in Wyoming is $2,615, which is 9% below the national average. Average one-bedroom rent across the state's 23 counties is $790/mo, and average household income is $73,360/yr.
Wyoming has no income tax and one of the lowest combined sales tax rates in the country. State government revenue comes heavily from mineral and energy royalties. Property tax rates are modest.
Energy (oil, gas, coal), agriculture and tourism are the dominant industries. Population is small and most counties are rural; resort areas like Teton County have a very different cost profile from the rest of the state.
3. Tennessee
Combined sales tax 9.55%. Average monthly cost $2,734 (5% below the national average).
The average monthly cost for a single person in Tennessee is $2,734, which is 5% below the national average. Average one-bedroom rent across the state's 95 counties is $925/mo, and average household income is $58,994/yr.
Tennessee phased out its Hall Income Tax on dividends and interest in 2021, joining the no-income-tax club. The state makes up the difference with one of the highest combined sales tax rates in the country.
Healthcare (Nashville), logistics (Memphis), and manufacturing (Chattanooga, Knoxville) drive the state economy. Music industry employment is concentrated in Nashville.
4. Texas
Combined sales tax 8.19%. Average monthly cost $2,754 (4% below the national average).
The average monthly cost for a single person in Texas is $2,754, which is 4% below the national average. Average one-bedroom rent across the state's 254 counties is $905/mo, and average household income is $64,737/yr.
Texas has no state income tax and funds public services primarily through property tax, which is among the highest in the country. The combined state-and-local sales tax averages over 8%.
Energy, tech, healthcare and manufacturing employment is spread across major metros (Houston, Dallas-Fort Worth, Austin, San Antonio). Property tax burden weighs heaviest on homeowners and is often the deciding factor in net savings versus an income-tax state.
5. Nevada
Combined sales tax 8.23%. Average monthly cost $3,004 (4% above the national average).
The average monthly cost for a single person in Nevada is $3,004, which is 4% above the national average. Average one-bedroom rent across the state's 17 counties is $1,080/mo, and average household income is $75,206/yr.
Nevada charges no income tax but funds state government through gaming and tourism revenue and a substantial sales tax. Property tax is modest by national standards. Most residents live in Las Vegas or Reno, where housing has climbed sharply over the past decade.
Workers in hospitality, gaming, logistics and warehousing are concentrated in Las Vegas; tech and outdoor industries are growing in Reno.
6. Alaska
Combined sales tax 1.82%. Average monthly cost $3,028 (5% above the national average).
The average monthly cost for a single person in Alaska is $3,028, which is 5% above the national average. Average one-bedroom rent across the state's 30 counties is $1,140/mo, and average household income is $79,407/yr.
Alaska charges no income tax and no statewide sales tax. State government revenue comes largely from oil royalties, and residents receive an annual Permanent Fund Dividend payment. Combined sales tax shown is the average of local-only rates.
Best suited to people who already work for one of the state's anchor industries (oil, fishing, federal government) and don't mind the remoteness and short summers.
7. New Hampshire
Combined sales tax 0.00%. Average monthly cost $3,042 (6% above the national average).
The average monthly cost for a single person in New Hampshire is $3,042, which is 6% above the national average. Average one-bedroom rent across the state's 10 counties is $1,002/mo, and average household income is $86,520/yr.
New Hampshire has no tax on wages. The state previously taxed interest and dividend income (the Interest and Dividends Tax) but that levy is being phased out. New Hampshire compensates with some of the highest property tax rates in the country.
Commuters working in Massachusetts often choose to live across the state line in southern New Hampshire to avoid Massachusetts income tax, though Massachusetts taxes nonresident income earned in-state.
8. Washington
Combined sales tax 10.23%. Average monthly cost $3,049 (6% above the national average).
The average monthly cost for a single person in Washington is $3,049, which is 6% above the national average. Average one-bedroom rent across the state's 39 counties is $1,157/mo, and average household income is $76,363/yr.
Washington has no income tax on wages but does levy a 7% capital gains tax on amounts above a threshold (introduced in 2022) and a Business and Occupation tax on businesses. Combined sales tax is among the highest in the nation.
Tech employment is concentrated in the Seattle metro. Eastern Washington has a notably lower cost of living than the Puget Sound region.
9. Florida
Combined sales tax 7.01%. Average monthly cost $3,061 (6% above the national average).
The average monthly cost for a single person in Florida is $3,061, which is 6% above the national average. Average one-bedroom rent across the state's 67 counties is $1,216/mo, and average household income is $65,468/yr.
Florida has no income tax and a 6% state sales tax with significant local additions. Property tax in coastal counties varies widely. Home insurance, particularly hurricane coverage, is a major and rising cost not captured in standard cost-of-living estimates.
Popular with retirees and remote workers. Florida's lack of income tax is particularly valuable for those with investment income or in higher brackets.
The real savings: income tax vs overall cost
A single person earning $75,000 per year pays approximately $4,984 in state income tax in Oregon, the highest-tax state at that income level. The same earner pays $0 in state income tax in any of the nine no-income-tax states. That income-tax saving is real and recurring.
But overall cost of living tells a different story. Of the nine no-income-tax states, 4 have below-average overall monthly cost and 5 are at or above the national average. And 5 of 9 have above-national-average combined sales tax rates, which partially offset the income tax savings for renters and lower-income earners.
The bottom line: no state income tax is meaningfully valuable, especially for high earners and people with investment income. But moving to a no-income-tax state does not automatically lower your overall cost of living. The full picture requires looking at rent, property tax, sales tax, and healthcare costs, not just the income-tax rate.
Key findings
- The cheapest no-income-tax state is South Dakota at $2,562/month for a single person.
- The most expensive is Florida at $3,061/month.
- A single earner making $75,000/year saves approximately $4,984/year in state income tax by living in a no-income-tax state instead of Oregon.
- However, 5 of 9 no-income-tax states have above-average combined sales tax rates, and only 4 of 9 have below-average overall monthly cost.
Frequently asked questions
About no-income-tax states in the U.S.
Which states have no income tax?
Nine U.S. states charge no income tax on wages and salaries: South Dakota, Wyoming, Tennessee, Texas, Nevada, Alaska, New Hampshire, Washington, Florida.
Is it cheaper to live in a state with no income tax?
Not necessarily. 4 of the 9 no-income-tax states have below-average overall monthly costs, but 5 are at or above the national average. The income tax savings are real, but high property tax (Texas, New Hampshire), high sales tax (Tennessee, Washington), or expensive housing (Washington, Nevada) often offset them.
What is the cheapest state with no income tax?
South Dakota is the cheapest no-income-tax state by overall monthly cost, at approximately $2,562/mo for a single person.
How much do you save with no state income tax?
For a single earner making $75,000/year, living in a no-income-tax state instead of Oregon saves approximately $4,984 per year in state income tax. The exact figure depends on income, filing status, and which states you're comparing.
Does New Hampshire have an income tax?
New Hampshire has no income tax on wages or salaries. The state previously levied the Interest and Dividends Tax on investment income but that tax is being phased out. New Hampshire is generally counted among the no-income-tax states for wage earners.
Not financial or tax advice
This guide presents data on cost of living and tax rates for general informational purposes only. It does not constitute financial, tax, or relocation advice. Tax laws change frequently and personal situations vary widely. Consult a qualified tax professional before making decisions based on tax considerations.
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About this data
State tax rates and brackets are from the Tax Foundation. Cost of living, rent and income figures are from the U.S. Census Bureau (ACS 5-Year Estimates) and HUD Fair Market Rents, averaged across each state's counties.