2026 State Tax Guide
Best & Worst States for Taxes
All 50 states ranked by overall tax burden. From Alaska's 5.06% to New York's 11.41% — that's a $6,350/year difference on $100K income.
Written by Glen Bradford — Florida resident, Purdue engineer, and someone who left the DC area partly for the tax savings.
9
States with no income tax
5.06%
Lowest overall burden (Alaska)
11.41%
Highest overall burden (New York)
41
States that don't tax Social Security
What's Inside
Top 10 Best States for Taxes
These states have the lowest overall tax burden when you combine income tax, sales tax, property tax, and other state/local taxes. Seven of the nine no-income-tax states make this list — but not all of them.
Alaska (AK)
No income or sales tax, plus annual PFD oil dividend to residents
Wyoming (WY)
Ultra-low property tax + no income tax = retiree paradise
Florida (FL)
No income tax, moderate property tax, homestead exemption saves thousands
Tennessee (TN)
Highest combined sales tax in the US, but no income tax offsets it
South Dakota (SD)
No income tax, trust-friendly laws attract wealth management
Nevada (NV)
No income tax, low property tax, but high sales tax + gaming taxes fund the state
Texas (TX)
No income tax BUT one of the highest property taxes in the nation
New Hampshire (NH)
No income or sales tax, but 2nd-highest property tax rate in the US
Washington (WA)
No income tax, but high sales tax + new capital gains tax on high earners
North Dakota (ND)
Very low income tax, oil revenue keeps overall burden low
Top 10 Worst States for Taxes
These states take the biggest bite out of your paycheck. California leads with the highest income tax, New Jersey has the highest property tax, and New York tops the overall burden chart.
Vermont (VT)
High across the board, taxes SS above $50K/$65K thresholds
Oregon (OR)
No sales tax, but near-highest income tax rate
Maryland (MD)
County income tax surtaxes add 2.25–3.20% on top of state rate
Minnesota (MN)
High income tax, taxes SS above $78K/$100K thresholds
Illinois (IL)
2nd-highest property tax in the US drives huge overall burden
Connecticut (CT)
High across all categories, taxes SS above $75K/$100K AGI
California (CA)
Highest income tax in the US (13.3%), Prop 13 keeps property tax low
New Jersey (NJ)
Highest property tax in the US + top-tier income tax
New York (NY)
NYC residents pay additional 3.88% city income tax on top
District of Columbia (DC)
Not a state, but included — high income tax, moderate property
All 50 States Compared
Complete comparison table sorted by overall tax burden (lowest to highest). Overall burden represents total state and local taxes as a percentage of income.
| # | State | Income Tax | Sales Tax | Property Tax | Overall Burden |
|---|---|---|---|---|---|
| 1 | Alaska | None | 1.76% | 1.04% | 5.06% |
| 2 | Wyoming | None | 5.36% | 0.55% | 6.14% |
| 3 | Florida | None | 7.01% | 0.86% | 6.33% |
| 4 | Tennessee | None | 9.55% | 0.62% | 6.22% |
| 5 | South Dakota | None | 6.40% | 1.08% | 6.69% |
| 6 | Nevada | None | 8.23% | 0.53% | 6.72% |
| 7 | Texas | None | 8.20% | 1.68% | 7.94% |
| 8 | New Hampshire | None | 0.00% | 1.93% | 6.84% |
| 9 | Washington | None | 9.29% | 0.87% | 8.34% |
| 10 | North Dakota | 1.95% | 6.96% | 0.98% | 7.68% |
| 11 | Montana | 5.90% | 0.00% | 0.74% | 7.31% |
| 12 | Utah | 4.65% | 7.19% | 0.57% | 7.83% |
| 13 | Idaho | 5.80% | 6.02% | 0.63% | 7.74% |
| 14 | Indiana | 3.05% | 7.00% | 0.81% | 7.92% |
| 15 | Arizona | 2.50% | 8.37% | 0.62% | 7.82% |
| 16 | Colorado | 4.40% | 7.77% | 0.49% | 8.05% |
| 17 | Georgia | 5.49% | 7.37% | 0.87% | 8.24% |
| 18 | Oklahoma | 4.75% | 8.98% | 0.87% | 7.97% |
| 19 | South Carolina | 6.40% | 7.44% | 0.56% | 7.98% |
| 20 | Alabama | 5.00% | 9.24% | 0.39% | 7.60% |
| 21 | Missouri | 4.80% | 8.29% | 0.91% | 8.41% |
| 22 | Mississippi | 4.70% | 7.07% | 0.65% | 7.89% |
| 23 | Louisiana | 4.25% | 9.55% | 0.55% | 8.01% |
| 24 | Michigan | 4.25% | 6.00% | 1.38% | 8.63% |
| 25 | North Carolina | 4.50% | 6.99% | 0.76% | 8.27% |
| 26 | Virginia | 5.75% | 5.75% | 0.82% | 8.59% |
| 27 | Delaware | 6.60% | 0.00% | 0.59% | 8.42% |
| 28 | Arkansas | 4.40% | 9.45% | 0.62% | 8.71% |
| 29 | Pennsylvania | 3.07% | 6.34% | 1.49% | 8.53% |
| 30 | Nebraska | 5.84% | 6.94% | 1.63% | 9.20% |
| 31 | West Virginia | 5.12% | 6.55% | 0.57% | 8.52% |
| 32 | Ohio | 3.50% | 7.24% | 1.53% | 8.82% |
| 33 | Maine | 7.15% | 5.50% | 1.24% | 9.02% |
| 34 | Kansas | 5.70% | 8.71% | 1.33% | 9.11% |
| 35 | Iowa | 5.70% | 6.94% | 1.52% | 9.15% |
| 36 | Massachusetts | 5.00% | 6.25% | 1.15% | 9.38% |
| 37 | Wisconsin | 7.65% | 5.43% | 1.61% | 9.42% |
| 38 | Rhode Island | 5.99% | 7.00% | 1.40% | 9.29% |
| 39 | New Mexico | 5.90% | 7.72% | 0.67% | 8.74% |
| 40 | Hawaii | 11.00% | 4.44% | 0.32% | 9.53% |
| 41 | Vermont | 8.75% | 6.36% | 1.83% | 10.28% |
| 42 | Oregon | 9.90% | 0.00% | 0.87% | 9.74% |
| 43 | Maryland | 5.75% | 6.00% | 1.05% | 9.82% |
| 44 | Minnesota | 9.85% | 7.49% | 1.08% | 10.19% |
| 45 | Illinois | 4.95% | 8.81% | 2.07% | 10.43% |
| 46 | Connecticut | 6.99% | 6.35% | 1.96% | 10.61% |
| 47 | California | 13.30% | 8.68% | 0.71% | 10.52% |
| 48 | New Jersey | 10.75% | 6.63% | 2.23% | 11.23% |
| 49 | New York | 10.90% | 8.52% | 1.62% | 11.41% |
| 50 | District of Columbia | 10.75% | 6.00% | 0.57% | 10.94% |
Sources: Tax Foundation (2025), IRS, US Census Bureau, WalletHub, Kiplinger. Rates are combined state + average local.
The "No Income Tax" Trap
"No income tax" sounds incredible on paper. But states have to fund their governments somehow — and if it's not coming from your paycheck, it's coming from your house, your shopping cart, or both.
Texas: Property Tax Trap
Texas has no income tax, but its effective property tax rate of 1.68% is one of the highest in the nation. On a $400,000 home, that's $6,720/year in property taxes alone.
Compare that to Florida, where the effective rate is 0.86% and the homestead exemption knocks $50K off your assessed value. Same $400K house in Florida: $3,010/year. Texas costs you $3,710 more per year on the exact same house.
New Hampshire: The Stealth Tax Champion
New Hampshire has no income tax AND no sales tax — which sounds like a libertarian utopia. But its property tax rate of 1.93% is the second-highest in the country.
A $500K home in New Hampshire costs $9,650/year in property taxes. That's more than most people would pay in state income tax. Renters don't escape either — landlords pass property taxes directly through rent increases.
What Actually Matters: Total Tax Burden
Here's a real comparison for someone earning $100,000 with a $400,000 home:
Florida
No income tax + 0.86% property
$6,330
estimated annual state/local tax
Texas
No income tax + 1.68% property
$7,940
estimated annual state/local tax
New York
6.85% income + 1.62% property
$11,410
estimated annual state/local tax
Remote Worker Tax Implications
Remote work reshaped where Americans live — but state tax laws haven't fully caught up. Here's what you need to know before you move to a no-income-tax state and assume your tax bill disappears.
The General Rule: Tax Where You Sit
Most states tax income based on where the work is physically performed, not where the employer is headquartered. If you live in Florida and work remotely for a Florida-based company, you pay zero state income tax. If you live in Florida and work for a California company, you generally still pay zero California tax — because you're physically in Florida.
The "Convenience of the Employer" Trap
New York, Connecticut, Delaware, Nebraska, and Pennsylvania have "convenience of the employer" rules. If your employer is in New York and you work remotely from Florida for your own convenience (not because the employer requires it), New York can still tax that income. This has survived multiple court challenges. Always verify before assuming you're in the clear.
Multi-State Workers
If you split time between states (e.g., 3 days in New York, 2 days remote from New Jersey), you may owe taxes in both states. Most states offer credits for taxes paid to other states, but you need to file in each state where you physically work. Track your days carefully — some states trigger filing requirements after as few as 1 day of work within their borders.
The Best Remote Worker Move
The cleanest setup: live in a no-income-tax state and work for an employer based in a no-income-tax state (or a state that uses physical presence, not convenience rules). Florida resident + Texas employer = zero state income tax, no ambiguity. If you're self-employed and move to Florida, your state tax situation is simple — you owe Florida nothing.
Get Glen's Musings
Occasional thoughts on AI, Claude, investing, and building things. Free. No spam.
Unsubscribe anytime. I respect your inbox more than Congress respects property rights.
Best States for Retirees — Tax Edition
Retirement income comes from Social Security, pensions, 401(k)/IRA withdrawals, and investments. Each state taxes these differently. Here's what matters most for retirees.
States That Don't Tax Social Security
41 states (plus DC) don't tax Social Security benefits at all. The 9 states that do tax Social Security — usually only above certain income thresholds — are:
Most of these states offer partial exemptions. For example, Colorado exempts Social Security for residents 65+ entirely. Connecticut exempts it below $75K/$100K AGI. Check your specific state's thresholds.
States That Don't Tax Pensions or 401(k)/IRA Withdrawals
Beyond the 9 no-income-tax states, these states exempt most or all retirement income:
Pennsylvania
Fully exempts all retirement income (pensions, 401k, IRA, SS)
Mississippi
Exempts all qualified retirement income from state tax
Illinois
Exempts retirement income from 401k, IRA, and pensions
Iowa
Phasing out retirement income tax entirely by 2026
Alabama
Exempts all pension income + allows federal tax deduction
Hawaii
Exempts employer-contributed pension income
The Retiree Power Combo
For maximum tax savings in retirement, the ideal state has: no income tax, no Social Security tax, no pension tax, low property tax, and a homestead exemption. Florida checks every box. Wyoming and Nevada are close behind. If you want to stay in the eastern US, Pennsylvania is surprisingly strong — it exempts all retirement income from state tax, doesn't tax Social Security, and has moderate property taxes.
Glen's Take
Glen Bradford
Florida Resident · Former DC Area · Self-Employed LLC Owner
No state income tax was a factor when I moved from the DC area to Miami Beach. Not the only factor — the weather, the beach, and the lifestyle all played a role — but when you run your own LLC and every dollar of income flows through to your personal return, going from Virginia's 5.75% income tax to Florida's 0% is a real, measurable pay raise.
On $150K of self-employment income, that's roughly $8,625/year I keep instead of sending to Richmond. Over 5 years, that's $43,125. Invested at 8%, it compounds to over $50K in a decade. That's real money.
But I'm not naive about Florida's trade-offs. Property insurance is brutal — I pay more for wind/flood insurance than most people pay in state income tax. Sales tax at 7% adds up on everything except groceries. And the homestead exemption only helps homeowners, not renters. If you're renting in Miami Beach and earning $60K, the math is much less compelling than it is for a high-income homeowner.
My advice: Don't move states just for taxes unless you actually want to live there. Saving $8K/year doesn't matter if you're miserable. But if you're already considering a move and you're choosing between two cities you'd enjoy equally — pick the one with the lower tax burden. It compounds.
For high earners ($200K+), especially self-employed ones, the difference between California (13.3% top rate) and Florida (0%) is $26,600+ per year. That's not a rounding error. That's a maxed-out 401(k) contribution. That's your kid's college fund. At that level, state taxes should absolutely be part of your financial planning.
Frequently Asked Questions
Which states have no income tax?
Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire previously taxed interest and dividends but fully repealed that tax in 2025. Washington introduced a capital gains tax on high earners in 2022, though it's technically classified as an excise tax.
Does no income tax mean low overall taxes?
Not necessarily. States without income tax often make up the revenue through higher property taxes, sales taxes, or fees. Texas has no income tax but has one of the highest property tax rates in the country at 1.68%. New Hampshire has no income or sales tax but property tax averages 1.93%. Tennessee has the highest combined sales tax rate at 9.55%. You need to look at total tax burden, not just income tax.
What is the best state for taxes overall?
Alaska has the lowest overall tax burden at approximately 5.06% of income. It has no state income tax, no statewide sales tax (though localities can levy small taxes), and moderate property taxes. Residents also receive an annual Permanent Fund Dividend from oil revenues. Wyoming and Florida round out the top three with overall burdens of 6.14% and 6.33% respectively.
Which state has the highest taxes?
New York has the highest overall state and local tax burden at approximately 11.41% of income. New York City residents face an additional 3.88% city income tax. New Jersey (11.23%) is a close second, driven primarily by the highest property taxes in the nation at 2.23% effective rate. California ranks third due to its 13.3% top income tax rate, the highest of any state.
How do state taxes affect remote workers?
Remote workers are generally taxed in the state where they physically perform their work, not where their employer is headquartered. However, some states like New York have a 'convenience of the employer' rule that taxes remote workers as if they were in-state if their employer is based there. If you work remotely from Florida for a New York company, New York may still tax that income. Always check both states' rules and consult a tax professional.
Which states don't tax Social Security benefits?
The vast majority of states don't tax Social Security benefits. Only 9 states tax Social Security income to some degree: Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont — though most of these offer exemptions for lower-income retirees. The remaining 41 states (plus DC) either have no income tax or specifically exempt Social Security from state income tax.
Is it worth moving to a no-income-tax state?
It depends on your income level and overall financial picture. High-income earners ($200K+) can save $10,000–$25,000+ per year by moving from California or New York to Florida or Texas. But you need to factor in property taxes, sales taxes, cost of living differences, and quality of life. Someone earning $60K might only save $2,000–$3,000 in income tax, which may not offset higher property taxes or insurance costs in the new state.
What is the best state for retirees tax-wise?
Florida, Wyoming, and Nevada are consistently the best states for retirees from a tax perspective. All three have no income tax, no tax on Social Security, no tax on pensions, and relatively low overall tax burdens. Florida's homestead exemption further reduces property tax for primary residents. South Carolina and Pennsylvania are also strong choices — both exempt Social Security and most retirement income from state tax while maintaining lower costs of living.
Key Takeaways
Look at Total Burden, Not Just Income Tax
No income tax means nothing if your property tax eats the savings. Texas homeowners can pay $6,000–$10,000+/year in property taxes. Always calculate the full picture: income + sales + property + fees.
Income Level Changes the Calculus
At $50K income, the difference between the best and worst states is about $3,200/year. At $200K, it's $12,700+. At $500K+, it's $30,000+. State tax optimization matters more the more you earn.
Retirees Have the Most to Gain
Retirees can often choose where to live with fewer constraints. Moving from a high-tax state to Florida or Wyoming in retirement can save $5,000–$15,000/year — with zero impact on your career or commute.
Remote Workers: Check the Fine Print
Don't assume moving to a no-income-tax state eliminates your state tax obligation. "Convenience of employer" rules in NY, CT, and others can tax you even if you never set foot in the state. Get professional advice.
Recommended Resources
Tools & books I actually use and recommend
The Psychology of Money
Morgan Housel on why managing money is about behavior, not intelligence. Short, brilliant chapters you'll re-read.
View on AmazonThe Little Book of Common Sense Investing
John Bogle's manifesto on why low-cost index funds beat everything else. Straight from the founder of Vanguard.
View on AmazonTradingView
Best charting platform out there. Real-time data, screeners, and a community of millions of traders.
Try TradingViewSome links above are affiliate links. I only recommend products I personally use. See my full disclosures.
Keep Exploring
Cost of Living Comparison
Compare cost of living across 30+ US cities — housing, groceries, transportation, and more.
Read moreRankingTop 25 Cheapest Places to Live
The most affordable cities in America ranked by cost of living index, housing, and quality of life.
Read moreCalculatorTax Bracket Calculator
See exactly which federal tax bracket you fall into and how much you owe at every income level.
Read moreGuideTax Deductions for Self-Employed
25 deductions ranked by savings impact — the $30K+ most freelancers miss every year.
Read moreGuideBest States to Retire
Where to retire based on taxes, healthcare, climate, and cost of living — not just tax rates.
Read moreCalculatorFIRE Calculator
Calculate your financial independence number with 5 FIRE variants and a visual timeline.
Read more