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States That Don't Tax Income


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If seeing your state take a bite out of your paycheck (on top of whatever the federal government withholds) really grinds your gears, then consider moving yourself to one of these nine states. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no income tax - for any residents.

Be advised, though, that states still have to find money to pay for roads, schools and more, so other taxes may be higher. Texas, for example, has some of the highest property taxes in the U.S., and Tennessee, the second-highest average sales tax. In addition, New Hampshire and Tennessee tax some dividends and interest, although Tennessee plans to phase out its tax by 2021.

SEE ALSO: Best States for Low Taxes: 50 States Ranked for Taxes, 2018



Alaska

Sales Tax: Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can go as high as 7.5%. The statewide average is only 1.43%, according to the Tax Foundation. Sales taxes are generally charged in locations without real property taxes and vice versa.

Property Taxes: The median property tax on Alaska's median home value of $250,000 is $2,956.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Alaska .

SEE ALSO: 10 Tax Breaks for the Middle Class



Florida

Sales Tax: 6% state levy. Localities can add as much as 2%, and the average combined rate is 6.8%, according to the Tax Foundation.

Property Taxes: The median property tax on Florida's median home value of $166,800 is $1,702.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Florida .

SEE ALSO: 10 Things You Must Know About Retiring to Florida



Nevada

Sales Tax: 6.85% state levy. Localities can add as much as 1.42%, and the average combined rate is 8.14%, according to the Tax Foundation.

Property Taxes: The median property tax on Nevada's median home value of $191,600 is $1,478.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Nevada .

SEE ALSO: 14 States That Won't Tax Your Pension



New Hampshire

State Income Tax: While New Hampshire doesn't have an income tax, the Granite State does impose a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers).

Sales Tax: New Hampshire is one of five states with no state sales tax. There are no local sales taxes, either.

Property Taxes: The median property tax on New Hampshire's median home value of $239,700 is $5,241 (the third-highest in the country).

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in New Hampshire .

SEE ALSO: 10 Smart Steps to Minimize Taxes and Penalties on Your RMDs



South Dakota

Sales Tax: 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.40%, according to the Tax Foundation. Many services are taxed, as is food.

Property Taxes: Median property tax on South Dakota's median home value of $146,700 is $1,943.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes on retirees in South Dakota .

SEE ALSO: 13 States Where Social Security Benefits Are Taxable



Tennessee

State Income Taxes: Like New Hampshire, Tennessee doesn't tax earned income but does have a tax on dividends and interest. The first $1,250 in taxable income for individuals ($2,500 for joint filers) is exempt from what's known as the Hall Tax. For 2018, the rate is 3%. The Hall tax is being phased out, falling 1% a year. It will be phased out entirely by 2021 (and it's already waived completely if you're over 100).

Sales Tax: 7% state levy. Localities can add up to 2.75%, with an average combined rate of 9.46%, the second-highest in the country, according to the Tax Foundation. Groceries are taxed at 4% by the state, plus whatever local rate is in effect. Local taxes are limited, though: Only the first $1,600 of any item is taxable.

Property Taxes: The median property tax on Tennessee's median home value of $146,000 is $1,088.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Tennessee .

SEE ALSO: The Most-Overlooked Tax Breaks and Deductions



Texas

Sales Tax: 7% state levy. Localities can add up to 2%, with an average combined rate of 8.17%, according to the Tax Foundation.

Property Taxes: The median property tax on Texas' median home value of $142,700 is $2,654.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Texas .

SEE ALSO: The Most Tax-Friendly States in the U.S. 2018



Washington

Sales Tax: 6% state levy. Municpalities can add up to 3.9% to that, with the average combined rate at 9.19% (the fourth-highest in the country), according to the Tax Foundation.

Property Taxes: The median property tax on Washington's median home value of $266,200 is $2,798.

Inheritance and Estate Taxes: An estate tax is imposed on estates exceeding $2.129 million. Rates range from 10% to 20%. Washington offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million. There is no inheritance tax.

For details on other state taxes, see the complete guide to taxes in Washington state .

SEE ALSO: 10 Surprising Things That Are Taxable



Wyoming

Sales Tax: 4.5% state levy. Localities can add as much as 2.0%, and the average combined rate is 5.42%, according to the Tax Foundation.

Property Taxes: The median property tax on Wyoming's median home value of $201,000 is $1,206.

Inheritance and Estate Taxes: There is no inheritance tax or estate tax.

For details on other state taxes, see the complete guide to taxes in Wyoming .

SEE ALSO: Millionaires in America: All 50 States Ranked



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Personal Finance , Taxes




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