State Tax Burden: Income, Sales & Property Taxes Compared

Nine states take nothing from your paycheck. Five charge nothing at the register. Not one of them is a tax haven.

Every state has to fund roads, schools, and public safety, and the money comes from somewhere. What varies is not how much states collect — the totals are far closer than the headlines suggest — but which of the three big taxes they collect it through. A state that skips income tax leans on property. A state that skips sales tax leans on income. The headline you read is describing the gap in a state's revenue mix, not a discount.

This guide covers all three legs of the stool — income, sales, and property — and how to work out what any given state would actually cost you.

The short version

• Nine states levy no broad income tax on wages; five levy no statewide sales tax.
• Effective property-tax rates span an eight-fold range, from ~0.28% in Hawaii to ~2.23% in New Jersey.
• No income tax does not mean low taxes — the revenue is recovered through sales, property, or severance taxes.
• Washington taxes very large capital gains; New Hampshire became fully income-tax-free in 2025.
• Your real burden depends on what you earn, own, and spend — the three don't weigh equally for everyone.

The nine states with no income tax

These states do not tax wage and salary income:

That covers the overwhelming majority of workers, though two of the nine carry an asterisk.

Washington has no tax on wages, but since 2022 it has levied a 7% tax on very large long-term capital gains — only on gains above roughly $278,000 per year (the 2025 threshold, indexed annually). For ordinary wage earners and most investors there is still no state income tax, but Washington's tax politics remain unusually active and this is a space to watch.

New Hampshire never taxed wages, but it did tax interest and dividends until that levy was fully phased out on 1 January 2025. As of 2025 it is completely income-tax-free — while carrying some of the highest property taxes in the country, which is not a coincidence.

Tennessee deserves a footnote too: its old "Hall tax" on investment income was repealed in 2021, which is why it now sits cleanly on the list.

The five with no sales tax

Five states charge no statewide sales tax, known collectively by the initialism NOMAD:

New Hampshire, Oregon, Montana, Alaska, Delaware. Big-ticket purchases — cars, appliances, electronics — are noticeably cheaper at the register than in a high-sales-tax state, where combined state and local rates can top 9%.

Each has its own catch:

• Alaska is the one NOMAD state that lets localities levy their own sales tax, reaching roughly 7.5% in some towns. The statewide zero is real; the rate you actually pay may not be.
• Montana permits limited local resort taxes in tourist areas.
• Delaware charges a gross-receipts tax on businesses, which works its way quietly into shelf prices.
• Oregon offsets it with a comparatively high income tax.
• New Hampshire leans on those very high property taxes.

Property tax: the widest spread of the three

Property tax varies more between states than income or sales tax does. Effective rates — annual tax as a share of home value — run from about 0.28% in Hawaii to over 2.23% in New Jersey. That is an eight-fold gap, and on a median home it is the difference between a few hundred dollars a year and nine thousand.

Highest effective rates:

Lowest:

The spread comes down to three structural choices. School funding is the biggest driver: where local property taxes fund schools, as in New Jersey, rates climb; where the state funds them centrally, as in Hawaii, rates stay low. Revenue substitution is the second — no-income-tax states like Texas systematically lean harder here. And assessment rules are the third: states that cap how fast assessed values may rise hold effective rates down for long-tenured owners while shifting burden onto recent buyers.

Putting the three together

The single most useful idea in this guide is that the three taxes fall on different people, so no state is cheap in the abstract — only cheap for a particular life.

• Income tax falls hardest on high earners. It is close to irrelevant for a retiree drawing down savings in a state that exempts retirement income.
• Sales tax is roughly proportional to spending, so it falls hardest on households that spend most of what they earn — which means lower and middle incomes, in practice.
• Property tax falls on owners, not renters, and scales with home value rather than income. It is the tax most likely to become unaffordable for someone whose income falls while their house appreciates.

Run those three against your own situation and the rankings invert constantly. A high earner who rents in Nevada or Washington may save enormously. A middle-income homeowner in Texas who spends most of their paycheck may pay just as much overall as they would in a state with an income tax, having simply routed the money through property and sales taxes instead. A retiree with a paid-off house and modest withdrawals wants low property tax and a retirement-income exemption, and should barely care about the income-tax headline at all.

How states rank on economic freedom

Taxes are one slice of economic freedom. The score folds in the total tax burden plus regulatory load and business climate, which is why this list is not simply the nine no-income-tax states in order:

1. 1. New Hampshire —
   10.0/10 (A+).
2. 2. Tennessee —
   9.8/10 (A+).
3. 3. South Dakota —
   9.6/10 (A+).
4. 4. Texas —
   9.4/10 (A+).
5. 5. Idaho —
   9.2/10 (A+).
6. 6. Florida —
   9.0/10 (A+).
7. 7. North Carolina —
   8.8/10 (A).
8. 8. Georgia —
   8.6/10 (A).
9. 9. North Dakota —
   8.4/10 (A-).
10. 10. Indiana —
    8.2/10 (A-).

See all 50 states ranked on Economic Freedom

See the full tax-burden & economic-freedom ranking

All 50 states ranked on total tax load, regulation, and business climate — with a color-coded map.

Should you move for the taxes?

It can be an excellent financial decision, and it is often oversold. Three steps before you commit:

1. Model your total burden, not the headline. Estimate income, sales, and property tax in both states for your actual income, spending, and likely home value. The tax-savings calculator does all three at once.
2. Add cost of living. A larger take-home means little if housing, insurance, and groceries absorb the difference. Insurance in particular has become a serious factor in Florida and Texas, and it is not a tax, so no tax comparison will show it to you.
3. Weigh what the money buys. Lower taxes can mean different funding levels for schools, infrastructure, and public services. That is a real trade-off, and which side of it you want is a judgement about your own life rather than a fact about the states.

For many remote workers and retirees the arithmetic is genuinely compelling. For plenty of others, a moderate-tax state with cheaper housing wins outright. The point is to compare the whole picture rather than one column of it.