By Texas has no state income tax in 2026. California’s top rate is 13.3%. So moving from San Francisco to Austin should save you a fortune, right?
The answer is more nuanced than you’d expect. Let’s run the actual numbers.
The Nine No-Income-Tax States
| State | No Tax On Wages | Notes |
|---|---|---|
| Alaska | ✓ | Also pays residents a dividend (PFD) |
| Florida | ✓ | Popular retirement destination |
| Nevada | ✓ | High sales tax (8.23% avg) |
| New Hampshire | ✓* | Taxes dividends/interest, not wages (phasing out by 2027) |
| South Dakota | ✓ | Low overall tax burden |
| Tennessee | ✓ | abolished wage tax in 2021; investment income tax phased out 2025 |
| Texas | ✓ | High property tax (~1.6% avg) |
| Washington | ✓* | Taxes capital gains over $270k, not wages |
| Wyoming | ✓ | Lowest tax burden in the US |
*These states don’t tax regular wage income but may tax investment income.
The Savings on a $100,000 Salary
How much state income tax would you save by living in a no-tax state vs. the highest-tax states?
Single filer, $100,000 salary, standard deduction:
| State | State Income Tax | Monthly Savings vs CA |
|---|---|---|
| California | ~$5,944 | — |
| New York | ~$5,412 | $44 |
| Hawaii | ~$6,950 | −$84 |
| Texas | $0 | $495 |
| Florida | $0 | $495 |
| Washington | $0 | $495 |
| Wyoming | $0 | $495 |
On paper, moving from California to Texas saves $5,944 per year ($495/month) on a $100,000 salary.
At $200,000, the gap widens to over $14,000 per year.
But Here’s What They Get You Back
States without income tax still need revenue. They collect it elsewhere.
Property Tax
| State | Avg Effective Property Tax Rate | Tax on $400k Home |
|---|---|---|
| Texas | 1.60% | $6,400 |
| New Hampshire | 1.89% | $7,560 |
| Washington | 0.93% | $3,720 |
| California | 0.75% | $3,000 |
| Hawaii | 0.31% | $1,240 |
Texas’s property tax is more than double California’s. If you own a $400,000 home, you pay $3,400 MORE per year in Texas property tax than you would in California.
That eats 57% of your income tax savings.
Sales Tax
| State | State + Avg Local Sales Tax |
|---|---|
| Tennessee | 9.55% |
| Louisiana | 9.56% |
| Washington | 9.38% |
| Nevada | 8.23% |
| Texas | 8.20% |
| Florida | 7.02% |
| California (for comparison) | 8.82% |
Sales tax rates in no-income-tax states are comparable to or slightly higher than high-tax states. On $40,000 of annual taxable spending, the difference between 8.2% (Texas) and 8.8% (California) is only $240/year.
The Complete Picture: $100k Salary, Homeowner
Let’s compare a homeowner earning $100,000 with a $400,000 home:
| California | Texas | Difference | |
|---|---|---|---|
| State Income Tax | $5,944 | $0 | +$5,944 |
| Property Tax | $3,000 | $6,400 | −$3,400 |
| Sales Tax (on $40k spending) | $3,528 | $3,280 | +$248 |
| Net Tax Savings | +$2,792 |
So the real savings is $2,792 per year — not $5,944. Still positive, but 53% less than the headline number.
The Renter’s Advantage
If you rent instead of own, the calculation changes dramatically:
| California | Texas | Difference | |
|---|---|---|---|
| State Income Tax | $5,944 | $0 | +$5,944 |
| Property Tax | $0 (indirect) | $0 (indirect) | $0 |
| Sales Tax | $3,528 | $3,280 | +$248 |
| Net Tax Savings | +$6,192 |
Renters capture almost the full income tax savings because they don’t directly pay property tax. (Landlords pass some of it through in rent, but not all.)
This is why young professionals and high-income renters benefit most from no-tax states.
The Cost of Living Factor
Taxes are only half the equation. Housing costs dwarf tax differences:
| Metro | Median Home Price | Property Tax + Income Tax on $100k |
|---|---|---|
| San Francisco, CA | $1,350,000 | ~$5,944 + $10,125 = $16,069 |
| Austin, TX | $550,000 | $0 + $8,800 = $8,800 |
| Tampa, FL | $420,000 | $0 + $2,940 = $2,940 |
| Seattle, WA | $820,000 | $0 + $7,626 = $7,626 |
The housing cost difference between San Francisco and Austin is $800,000 — dwarfing the $6,000/year tax difference.
When Moving to a No-Tax State Actually Makes Sense
Move if:
- You earn $150,000+ (higher income = bigger tax savings)
- You rent (you capture the full benefit)
- Your job is remote or transferable
- You’re retiring with high investment income (especially to FL, NV, TX, WA)
- The cost of living is equal or lower than your current location
Don’t move if:
- Your income is under $80,000 (savings are modest)
- You own an expensive home (property tax eats the savings)
- Your salary would drop significantly in the new market
- You’d need to buy in a high-property-tax state like TX or NH
The Remote Worker Loophole
If you work remotely, you may be able to legally establish residency in a no-tax state while working for a company in a high-tax state.
Key requirements:
- Physically live in the no-tax state for most of the year
- Change your driver’s license, voter registration, and mailing address
- Some states (especially NY, CA, NJ) aggressively audit “remote workers” who claim to have moved
Warning: New York’s “convenience of the employer” rule can tax you even if you work remotely from another state — unless your employer requires you to be outside NY for business reasons.
Frequently asked questions
Which states have no income tax in 2026?
Nine states don’t tax wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire and Washington tax some investment income but not wages.
Is it worth moving to a no-income-tax state?
It depends on your income and housing situation. High-income earners (especially renters) save $4,000–$14,000 per year. Homeowners in high-property-tax states like Texas may see savings cut by 50% or more. Calculate your specific situation using our state tax comparison tool.
How much would I save moving from California to Texas?
On a $100,000 salary: roughly $5,944/year in state income tax. But Texas property taxes are higher, so a homeowner with a $400k home nets about $2,792 in total savings. A renter captures closer to $5,900.
Do no-tax states have higher property taxes?
Generally yes. Texas (1.60%), New Hampshire (1.89%), and Tennessee (0.71% average but higher in cities) compensate for lost income tax revenue through property tax. Washington (0.93%) and Florida (0.80%) are more moderate.
Can I avoid state income tax by working remotely?
Potentially, if you genuinely relocate and establish residency in a no-tax state. You’ll need to change your driver’s license, voter registration, and spend most of the year there. Be aware that states like New York audit remote workers aggressively and may still tax you under the "convenience of the employer" rule.
What is the cheapest state to live in overall?
States with the lowest total tax burden (income + property + sales) are typically Alaska, Wyoming, Tennessee, South Dakota, and Michigan. But cost of living — especially housing — matters more than taxes for most households. Mississippi, Oklahoma, and Arkansas have the lowest cost of living.
How do I calculate my take-home pay in a different state?
Use our take-home pay calculator, select the state you’re considering, and enter your expected salary. The calculator applies that state’s 2026 tax brackets, standard deduction, and exemptions to show your actual net pay.
Know what changes your take-home pay
Official tax and wage changes, explained with practical paycheck examples and a tool to check your own situation. No spam; unsubscribe anytime.
By subscribing, you agree to our privacy policy.
Check your own numbers
Continue reading
Reader feedback Spot something unclear or outdated?
Send a correction, source suggestion or question to the editorial inbox. Submissions are reviewed privately and are never published automatically.