Everybody wants a lower tax bill. One way to accomplish this might be to live in a state with no income tax. At present, seven states—Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming—levy no state income tax at all. In addition, Washington levies an income tax on investment income and capital gains, but it is only for certain high earners. Elsewhere, New Hampshire currently taxes investment and interest income but is set to phase out those taxes starting in 2023. That will bring the number of states with no income tax to nine by 2027.Key TakeawaysAlaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming do not levy state income taxes, while New Hampshire doesn’t tax earned wages.States with no income tax often make up the lost revenue with other taxes or reduced services.A state’s total tax burden, which measures the percent of income paid in state and local taxes, may be a more accurate measure of its affordability than its income tax rate al...
