What States Do Not Have State Income Tax?
Introduction
Income taxes are a major expense for individuals and businesses alike. When it comes to taxes, everyone wants to pay as little as possible. One way to reduce income taxes is to live in a state that does not impose a state income tax. As of 2023, there are nine states that do not have a state income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee. Let’s take a look at how each of these states differs in terms of income tax policy.
Alaska
Alaska is one of the most tax-friendly states in the U.S. It has no personal income tax, no corporate income tax, and no sales tax. Alaska does, however, have a local option sales tax that ranges from 0.5%-7.5%. Alaska does have property taxes, but these are among the lowest in the nation. Residents of Alaska also benefit from the state’s Permanent Fund Dividend, which is paid out each year to all residents regardless of their income level.
Florida
Florida is another state that does not have a state income tax. In addition, it does not have a corporate income tax or an inheritance tax. Florida does, however, have a sales tax that is 6% statewide, with local option taxes adding an additional 1%-2.5%. Florida also has some of the highest real estate taxes in the nation. Despite this, Florida remains one of the most desirable states to live in due to its low cost of living, warm climate, and abundance of recreational activities.
Nevada
Like Florida, Nevada does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. However, Nevada does have a sales tax of 6.85%, with local option taxes adding an additional 0.5%-2.5%. Nevada is also known for its low real estate taxes, which are among the lowest in the nation. In addition, Nevada has no personal income tax, making it an attractive destination for retirees and other high-income individuals.
South Dakota
South Dakota is another state that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. South Dakota does, however, have a sales tax of 4.5%, with local option taxes adding an additional 0.5%-2.5%. South Dakota also has some of the lowest real estate taxes in the nation. In addition, South Dakota is one of the few states that does not tax Social Security benefits.
Texas
Texas is the largest state in the U.S. and one of the few states that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. Texas does, however, have a sales tax of 6.25%, with local option taxes adding an additional 0.5%-2.5%. Texas also has some of the lowest real estate taxes in the nation. In addition, Texas has no personal income tax, making it an attractive destination for retirees and other high-income individuals.
Washington
Washington is another state that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. Washington does, however, have a sales tax of 6.5%, with local option taxes adding an additional 0.5%-2.5%. Washington also has some of the lowest real estate taxes in the nation. In addition, Washington is one of the few states that does not tax Social Security benefits.
Wyoming
Wyoming is another state that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. Wyoming does, however, have a sales tax of 4%, with local option taxes adding an additional 0.5%-2.5%. Wyoming also has some of the lowest real estate taxes in the nation. In addition, Wyoming is one of the few states that does not tax Social Security benefits.
New Hampshire
New Hampshire is another state that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. New Hampshire does, however, have a sales tax of 0%, with local option taxes adding an additional 0.5%-2.5%. New Hampshire also has some of the lowest real estate taxes in the nation. In addition, New Hampshire is one of the few states that does not tax Social Security benefits.
Tennessee
Tennessee is another state that does not have a state income tax. It also does not have an inheritance tax or a corporate income tax. Tennessee does, however, have a sales tax of 7%, with local option taxes adding an additional 0.5%-2.5%. Tennessee also has some of the lowest real estate taxes in the nation. In addition, Tennessee is one of the few states that does not tax Social Security benefits.
Conclusion
As of 2023, there are nine states in the U.S. that do not have a state income tax. These states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee. Each of these states has its own unique tax structure, so it is important to research each state’s tax laws before making a decision on where to live. By living in a state without a state income tax, individuals and businesses can save a considerable amount of money on taxes each year.