Home/Cheapest No Income Tax State

The Cheapest No Income Tax State in 2026 (Ranked by Total Tax Burden)

Q: Which state has the lowest taxes overall?

Wyoming consistently ranks as having the lowest total state and local tax burden as a percentage of income, according to Tax Foundation rankings. It has no income tax, low property tax (0.56%), low sales tax (5.36% average), and no estate or corporate income tax. Alaska competes for the top spot on the numbers alone but has a cost of living 27.5% above the national average that largely offsets the tax advantage.

Q: What is the cheapest no income tax state for retirees?

For most retirees, Wyoming or South Dakota offer the lowest total burden. Florida is the most popular choice due to climate, infrastructure, and the generous Homestead Exemption, even though it is not the absolute cheapest. Tennessee is attractive for retirees with high spending because low cost of living partially offsets the 9.55% sales tax.

Q: What is the cheapest no income tax state for high earners?

For high earners ($200K+), Wyoming and South Dakota offer the best total tax burden. Florida is close and adds major infrastructure and climate benefits. Texas lags due to its very high property tax (1.60% average), which adds $6,400 to $9,600 per year on a typical executive home.

Q: Is Wyoming really the cheapest state to live in?

Wyoming is the cheapest state on total tax burden, but it is not the cheapest state to live in overall. Mississippi, West Virginia, and Kansas have lower costs of living. Wyoming's cost of living index of 96 is 4% below the national average, which is good but not extreme. The tax advantage is the primary reason Wyoming comes out on top for total financial burden calculations.

The short answer: Wyoming, for most people. But it depends on your income, your spending, and whether you need a major metro. South Dakota is a close second. Florida ranks third on the practical ranking because of its infrastructure, climate, and healthcare network.

Last reviewed April 2026. Sources: Tax Foundation State-Local Tax Burden Rankings 2024, BEA Regional Price Parity 2024.

Quick Answer by Persona

Overall

Wyoming

2nd: South Dakota

Lowest tax burden by any measure

High Earner

Wyoming

2nd: Florida

Large income savings + low property

Retiree

Wyoming

2nd: Florida

FL wins on climate + healthcare access

Remote Worker

Wyoming

2nd: Florida

FL wins on infrastructure + connectivity

Ranked Comparison Table: All 9 No Income Tax States

Ranked by overall total tax burden (income, property, and sales tax combined as percentage of income at $150K income, $450K home, $50K spending). CoL = cost of living index (100 = national average).

Rank	State	Income Tax	Property Tax	Sales Tax	CoL	Estate Tax
1	Wyoming (WY)	0%	0.56%	5.36%	96	No
2	South Dakota (SD)	0%	1.08%	6.10%	92	No
3	Alaska (AK)	0%	1.04%	0-7.5%	128	No
4	Florida (FL)	0%	0.86%	7.02%	103	No
5	Nevada (NV)	0%	0.53%	8.23%	104	No
6	Tennessee (TN)	0%	0.64%	9.55%	92	No
7	New Hampshire (NH)	0%*	1.86%	0%	113	No
8	Texas (TX)	0%	1.60%	8.19%	94	No
9	Washington (WA)	0%†	0.94%	9.20%	111	Yes

* NH taxes interest and dividends above $2,400 at 3% in 2026; 0% from Jan 2027. † WA has a 7% capital gains tax on gains above $250K and an estate tax above $2.193M. Sources: Tax Foundation, BEA.

Per-Persona Analysis

Retiree: 65, $70K retirement income, $500K home

$30K Social Security + $40K pension/IRA. $35K annual taxable spending. Homeowner.

State	Income Tax	Property Tax	Sales Tax	Total
Wyoming	$0	$2,800	$1,876	$4,676
South Dakota	$0	$5,400	$2,135	$7,535
Florida	$0	$4,300	$2,457	$6,757
Nevada	$0	$2,650	$2,881	$5,531
Tennessee	$0	$3,200	$3,343	$6,543
Texas	$0	$8,000	$2,867	$10,867
New Hampshire	$0	$9,300	$0	$9,300
Washington	$0	$4,700	$3,220	$7,920

Estimates using average county rates. Actual amounts vary by location. Not tax advice.

High Earner: 38, $250K W-2, $750K home

$250,000 W-2 salary. Currently in California (10.3% state income tax). $60K annual taxable spending.

State	Income Tax	Property Tax	Sales Tax	Total	vs CA ($34K+)
Wyoming	$0	$4,200	$3,216	$7,416	+$26,584 saved
South Dakota	$0	$8,100	$3,660	$11,760	+$22,240 saved
Florida	$0	$6,450	$4,212	$10,662	+$23,338 saved
Nevada	$0	$3,975	$4,938	$8,913	+$25,087 saved
Tennessee	$0	$4,800	$5,730	$10,530	+$23,470 saved
Texas	$0	$12,000	$4,914	$16,914	+$17,086 saved
New Hampshire	$0	$13,950	$0	$13,950	+$20,050 saved
Washington	$0	$7,050	$5,520	$12,570	+$21,430 saved

CA income tax estimate at effective ~13.6% on $250K. Estimates only, not tax advice.

Why Wyoming Usually Wins

Wyoming wins on tax math because it stacks advantages that no other state combines: no income tax, low property tax (0.56%), low sales tax (5.36%), no estate tax, no corporate income tax, and a cost of living slightly below the national average. Mineral extraction revenues fund the state, reducing the need to tax residents in any category.

The main reason people choose another state over Wyoming is lifestyle: Wyoming has under 600,000 residents, extreme winters, limited healthcare specialists, and remote geography. For most people who need a functioning metro, Florida, Nevada, or Tennessee offer better practical options even if the pure tax math is slightly less favorable.

Why Texas and New Hampshire Rank Low

Texas: The Property Tax Trap

Texas ranks 8th out of the 9 no-income-tax states on total burden. Its 1.60% average property tax rate costs $6,400 to $9,600 per year more than Wyoming or Nevada on a typical $400K to $600K home. This is the dominant factor that pushes Texas down the ranking despite its many other advantages (size, economy, jobs, weather).

New Hampshire: The Property Tax Trap 2.0

New Hampshire has zero income tax on wages and zero sales tax, which sounds perfect. But the 4th highest property tax rate in the nation at 1.86% crushes the advantage for homeowners. On a $500K New Hampshire home, property tax is $9,300 per year. NH only wins clearly for high earners who rent or own inexpensive properties.

Why Alaska Wins on Math But Loses on Feel

Alaska has no state income tax, no state sales tax, and pays residents up to $2,000 per year via the Permanent Fund Dividend. On the raw numbers, Alaska's tax burden is extremely low. But Alaska's cost of living at 127.5 (28% above average) means that a household spending $60,000 per year in the lower 48 will spend $76,800 for the same lifestyle in Alaska. The $16,800 cost of living premium dwarfs the tax savings for most households. Alaska is a great place to live for people who love the Alaska lifestyle, not a tax optimization destination.

The Remote Worker Exception

Remote workers have a unique advantage: they can choose where to live based entirely on tax burden and lifestyle, without job market constraints. For remote workers, the calculus shifts toward Wyoming or South Dakota for pure financial optimization, but toward Florida, Nevada, or Tennessee for most practical life choices. Most remote workers eventually choose Florida or Texas because of infrastructure, airport access, and housing supply.

One critical caveat: if your employer is in New York, Connecticut, Delaware, Nebraska, or Pennsylvania, the convenience-of-employer rule may mean you owe that state's income tax regardless of where you live. See our convenience of employer rule guide for details.

FAQ

Which state has the lowest taxes overall?

Wyoming, consistently. It has no income tax, the second-lowest property tax (0.56%), low sales tax (5.36%), no estate tax, and no corporate income tax. The Tax Foundation ranks Wyoming 1st in its annual state business tax climate index.

What is the cheapest no income tax state for retirees?

Wyoming or South Dakota on pure tax math. Florida for practical considerations: healthcare access, climate, no estate tax, and strong retirement community infrastructure.

What is the cheapest no income tax state for high earners?

Wyoming for pure total-burden math. Florida and Nevada rank second and third while offering much better infrastructure than Wyoming's rural environment.

Is Wyoming really the cheapest state to live in?

Wyoming is the cheapest on total tax burden. Its overall cost of living index is 96 (4% below national average), which is good but not the lowest. Mississippi, West Virginia, and Arkansas have lower cost of living overall.

Total Tax Burden

All 50 states ranked and compared

Best State to Retire

Retiree-specific ranking with healthcare data

Remote Workers Guide

What remote workers actually pay

Residency Checklist

How to make the move official

Sources: Tax Foundation State-Local Tax Burden Rankings 2024, BEA Regional Price Parity 2024, state revenue departments. All estimates are simplified calculations. Not tax advice. Consult a CPA before making relocation decisions.