States With No Income Tax: The Hidden Costs You Need to Know
June 11, 2025
The "No Income Tax" Myth
Nine states charge zero income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Millions of Americans move to these states every year believing they'll save big on taxes.
But here's what most people miss: no income tax doesn't mean low taxes.
The Real Total Tax Burden
When you add property tax and sales tax back in, the picture changes dramatically:
| State | Income Tax | Property Tax | Sales Tax | Total Burden |
|---|---|---|---|---|
| New Hampshire | 0% | ~2.0% | 0% | 6.86% |
| Washington | 0% | ~0.9% | 9.29% | 6.86% |
| Texas | 0% | ~1.3% | 8.20% | 5.72% |
| Florida | 0% | ~0.8% | 7.02% | 4.92% |
| Tennessee | 0% | ~0.5% | 9.55% | 4.80% |
| South Dakota | 0% | ~1.1% | 6.40% | 4.60% |
| Nevada | 0% | ~0.5% | 8.23% | 4.47% |
| Wyoming | 0% | ~0.6% | 5.36% | 3.72% |
| Alaska | 0% | ~0.7% | 1.76% | 3.00% |
New Hampshire has NO income tax AND NO sales tax — but its property taxes are so high that its total burden (6.86%) is higher than 5 other no-income-tax states.
Texas: The Property Tax Surprise
Texas is the poster child for "no income tax." But the average Texas homeowner pays 1.3% of their home's value in property tax every year. On a $400,000 home, that's $5,200/year — before you've bought a single thing subject to the 8.2% sales tax.
Compare that to California, which everyone thinks of as "high tax":
Yes, California has high income tax. But if you own an expensive home, Texas property tax can exceed what you'd pay in California income tax.
Who Actually Saves by Moving?
High earners without expensive homes benefit most from no-income-tax states. If you make $200K+ but rent or own a modest home, Texas or Florida genuinely saves you money.
Homeowners with expensive property need to do the math. A $600K home in Texas costs $7,800/year in property tax — that's equivalent to paying a 3.9% income tax just on the house alone.
The Bottom Line
Don't move based on income tax alone. Use our total tax burden calculator to see the combined picture for your specific income and home value, or compare two locations directly.