9 States in the United States With No Income Taxes

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9 States in the United States With No Income Taxes

Updated August 8, 2010
2 minute read

These are the nine states in the United States that have no personal state income taxes. That does not mean these states have no taxes as all states must have some kind of tax base to pay for state government services but these states tax citizens in forms other than a state personal income tax. So high salary and income individuals are naturally drawn to live in these nine states. Any job in these nine states is worth more than in other states that do have personal income taxes.

Texas

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Texas has no personal income tax and no corporate income tax though it does have a gross margins business tax. The Texas Constitution severely restricts the imposition of a personal income tax and if such a tax is ever enacted proceeds have to be used to reduce property taxes. Texas has the 2nd largest economy of any state in the USA and 35 billionaires and 57 Fortune 500 companies reside in the Lone Star State.

Florida

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Florida has no personal income tax but does have a corporate income tax rate of 5%. There used to be a personal property tax in Florida that residents absolutely loathed but it was done away with in 2007. Florida has the 4th largest GDP of all the states in the United States.

Alaska

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Not only does Alaska have no personal income tax but the state actually pays residents dividends equal to 5% of the money in the state's Alaska Permanent Fund which manages the surplus from the state's petroleum or oil revenues. Since 1982 Alaska residents have received anywhere from $331.29 to $3,269.00 dollars each year and there is over $40 billion sitting the account. Residents of Alaska also earn the 4th highest income of any state in the USA.

New Hampshire 

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Though New Hampshire has no personal income tax it does have a interest and dividends tax of 5% as well as a business profits tax of 8.5%. New Hampshire residents earn the 7th highest median household incomes in the country.

Washington 

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Washington has no personal income tax and a very moderate business tax and residents of Washington earn the 10th highest incomes in the United States.

Nevada 

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Nevada gets most of its state income from gaming and sales taxes and a good percentage of those taxes are paid by tourists and visitors from other states and countries.

South Dakota 

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South Dakota does have a corporate income tax which applies to financial companies.

Tennessee 

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Tennessee taxes income received from stocks and bonds at 5% but has no other income taxes.

Wyoming 

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Wyoming is the least populous state in the country and has no state income taxes of any kind.

For more see 10 States Where You Can Earn the Most Money

Highest Income Cities in the United States

10 Highest Income Counties in the United States

Largest Economies in the World

Sources: http://en.wikipedia.org/wiki/State_income_tax