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What States Have No State Income Tax?

Posted by on November 28, 2012
Last modified:
Nine states have no income tax

If you live or work in one of these seven states you may not have to file a return.

In most states, you have to file a state income tax return AND a federal income tax return.

But in seven states you don’t have to file a state return because they don’t have an income tax:

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

Plus there are another two states that only tax income from dividends and interest:

  • Tennessee
  • New Hampshire

Does no tax mean more income?

Living in one of these states will certainly save you from the hassle of having to file an extra return during tax season, but it won’t necessarily save you any money. These states make up for the gap left in their budgets by the absence of income tax through relatively higher property, sales, and fuel taxes.

Normally, you have to file a resident tax return in the state where you are a resident, as well as a nonresident tax return in any additional state where you earned money during the tax year.

Your resident return will tax you on all of your income, regardless of where it was earned and your nonresident return will tax you only on the income you earned in that state.

So if you are a resident of a state without an income tax, you will still need to file a return in any other state where you earned money. Conversely, if you are a resident of a state with an income tax, but you work in one of the seven without one, you will not have to file a nonresident return there.

Remember, you can easily take care of all your state income tax returns at the same time you file your federal. Do it right here on PriorTax.

From a different point of view…

Just as an interesting point of comparison, here are the ten states with the highest income taxes per capital:

  • New York
  • Connecticut
  • Massachusetts
  • Oregon
  • California
  • Minnesota
  • New Jersey
  • Hawaii
  • Virginia
  • Maryland

Photo via A McLin on Flickr.

2 Responses to “What States Have No State Income Tax?”

  1. […] There would also be no deductions or exemptions from the tax, and even though it would mean you don’t have to file a tax return for the state (conservatives actually tout this as a benefit of a sales tax only system), it also […]

  2. Fran Holloway says:

    If enough revenue from taxation on goods and services are making no state tax, that is good!
    CT is one of the highest for for state and property tax (many more local tayes), and we have the poorest roads, bridges, in fact all infrastructure has been crumbling over the past 40 years. Yet the state government has mismanaged and misappropriated money from Washington and state and local tax money. Each year they continuely come up short and never can curb their spending, then they do things that is just no common sense, like complete research and reverie of completing Route 11 to connect to I-95 Every 5 or 10 years there is millions appropriated each time for the study over the past 40 years, I was shocked how much they spend on each of the studies! This money could have been used for upkeep of bridges and roads, instead they are linning pockets of a few that are on that project. This is only one big waste, I’m sure there are many more. We do not have someone who is capable in overseeing such misuse of our taxes.

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