Top 10 States with the Lowest Income Tax in 2026
If keeping more of your paycheck is a priority, where you live matters—a lot. Here's our definitive ranking of the most tax-friendly states for 2026.
The No-Tax Champions (Tier 1)
1. Wyoming
- State Income Tax: 0%
- Property Tax: 0.55% (one of lowest in US)
- Sales Tax: 4%
- Overall Score: ★★★★★
Wyoming isn't just tax-free—it has rock-bottom property taxes too. The tradeoff? Sparse population and limited job market.
2. Nevada
- State Income Tax: 0%
- Property Tax: 0.55%
- Sales Tax: 6.85%
- Overall Score: ★★★★★
Las Vegas and Reno offer real job markets while maintaining zero income tax. Entertainment and hospitality dominate.
3. Florida
- State Income Tax: 0%
- Property Tax: 0.86%
- Sales Tax: 6%
- Overall Score: ★★★★☆
The sunshine state remains a powerhouse, though insurance costs dock it slightly.
4. Texas
- State Income Tax: 0%
- Property Tax: 1.60%
- Sales Tax: 6.25%
- Overall Score: ★★★★☆
Big job market, but property taxes are substantial.
5. South Dakota
- State Income Tax: 0%
- Property Tax: 1.22%
- Sales Tax: 4.5%
- Overall Score: ★★★★☆
Often overlooked, but excellent for retirees and remote workers.
The Almost-Free (Tier 2)
6. Tennessee
- State Income Tax: 0% (on wages)
- Property Tax: 0.67%
- Sales Tax: 7%
- Overall Score: ★★★★☆
Nashville's growth puts Tennessee on the map.
7. Washington
- State Income Tax: 0% (on most income)
- Property Tax: 0.93%
- Sales Tax: 6.5%
- Overall Score: ★★★☆☆
Tech salaries meet zero income tax—though there's now a capital gains tax for high earners.
8. New Hampshire
- State Income Tax: 0% (on wages)
- Property Tax: 1.93%
- Sales Tax: 0%
- Overall Score: ★★★☆☆
No income or sales tax, but property taxes are steep.
9. Alaska
- State Income Tax: 0%
- Property Tax: 1.18%
- Sales Tax: 0%
- Overall Score: ★★★☆☆
Plus you get the Permanent Fund Dividend (roughly $1,000-$2,000/year).
The Low-Tax Leaders (Tier 3)
10. North Dakota
- State Income Tax: 1.95% max
- Property Tax: 0.98%
- Sales Tax: 5%
- Overall Score: ★★★☆☆
Technically not zero, but 1.95% is barely noticeable.
Honorable Mentions
- Arizona: Flat 2.5%
- North Carolina: Flat 4.75% (declining to 2.49% by 2030)
- Indiana: Flat 3.05%
The Full Picture
Remember: low income tax doesn't always mean low total taxes. Consider:
- Property taxes (Texas is high)
- Sales taxes (Tennessee is high)
- Cost of living
- Job opportunities
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