States with No Regular Income Tax in 2022
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Alaska: Low Tax Burden and Annual Payments
Alaska has no state income or sales tax. The total state and local tax burden on Alaskans, including income, property, sales, and excise taxes, is just 5.06% of personal income, the lowest of all 50 states. All residents of Alaska receive an annual payment from the Alaska Permanent Fund Corp.
Wyoming: Tax Revenue and Affordability
Wyoming is the least populated state in the U.S. and has no individual or corporate income tax. The state relies on property, oil, sales, and excise taxes to generate income. Its overall state and local tax burden is 7.5%, the second-lowest in the country. Wyoming ranks above average in cost of living and housing affordability.
Income Tax Overview
Generally, taxpayers must file a state income tax return annually to determine their tax obligations. Income tax is imposed by a government on income generated by individuals and businesses to pay for public services and infrastructure.
New Hampshire: Phase-Out of Interest and Dividend Tax
New Hampshire taxes interest and dividends from investments, but that tax is being phased out and will be completely eliminated in 2027.
Is It Better to Live in a State with No Income Tax?
Living in a state without income tax can be advantageous for high-income families, allowing them to save more of their earnings.
Tax Burden Comparison Table
| State | Tax Burden (%) | Affordability Rank | Best States to Live In Rank |
|---|---|---|---|
| Alaska | 5.06 | High | Top rank |
| Florida | – | – | – |
| Nevada | – | – | – |
| … | … | … | … |
Consider Full Tax Picture
States without income tax often raise other taxes to offset revenue loss. It’s essential to examine the complete tax scenario before moving to a no-income-tax state.