States with No Income Tax

Posted by Kristen on December 2, 2012

Are there states where you can live and you do not have to pay income tax?

Yes, there are seven American states that do not require residents to pay any income tax. In addition, to the states with no income tax there are two states that only tax dividends and interest income.

States with No Income Tax

Which states don’t have an income tax? They are:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

States With Limited Income Tax

The two states that tax only dividend and interest income are:

  • Tennessee
  • New Hampshire

Why don’t these states have to collect an income tax?

These states have another way to fund state operations. Generally, these states may have a higher property or sales tax. They also may have higher taxes for fuel, alcohol, cigarettes, or other products and services. Or they can have a unique circumstance such as Alaska that has the sale of petroleum or Nevada that has gaming tax collections to fund the state.

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Comments to States with No Income Tax

  1. I have been fortunate to live in two of them for the past 6 years–Florida for two years, and now Texas. Woohoo to no state income tax!! Plus the cost of living here in Houston is much less than in the Northeast (where I came from).

    Amanda L Grossman

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