State Income Tax Rates Ranked: Best and Worst States for Taxpayers in 2026
Where you live determines a significant portion of your total tax burden. Nine states have no income tax at all. Others tax top earners above 13%. Here's a complete breakdown of every state's approach — and the important question of whether moving to a no-tax state actually saves you money once the full picture is considered.
Updated April 2026 · 14 min read
How State Income Tax Works
State income taxes are entirely separate from federal income tax. You file a state return in addition to your federal 1040. Unlike the federal system, which uses one set of brackets nationwide, each state designs its own system. The three main approaches:
No Income Tax (9 states)
Zero personal income tax. Revenue comes from sales tax, property tax, and other sources.
Flat Tax (13 states)
Everyone pays the same percentage regardless of income. Rates range from 3.07% (Pennsylvania) to 5.39% (Georgia).
Progressive Brackets (28+ states)
Higher earners pay higher rates, like the federal system. Top rates range from under 3% to over 13%.
The 9 States With No Personal Income Tax
No income tax AND no state sales tax. Residents receive the Permanent Fund Dividend annually.
No income tax. 6% state sales tax plus local surtaxes (up to 8%). High property insurance costs.
No income tax. Relies heavily on gaming and tourism tax revenue.
No wage income tax, but taxes interest and dividends at 3% (phasing out — scheduled to end 2027).
No income tax. 4.5% state sales tax. Low population, limited public services.
No wage income tax. Previously taxed dividends and interest (Hall Tax) — fully repealed as of 2021.
No income tax. Relies heavily on property taxes — among the highest in the US.
No personal income tax on wages. Does impose a capital gains excise tax (7%) on gains over $262,000.
No income tax. Low population, relies on mineral severance taxes.
States With a Flat Income Tax Rate
| State | Flat Rate |
|---|---|
| Arizona | 2.5% |
| Indiana | 3.05% |
| Pennsylvania | 3.07% |
| Kentucky | 4.0% |
| Michigan | 4.25% |
| Colorado | 4.4% |
| North Carolina | 4.5% |
| Utah | 4.55% |
| Mississippi | 4.7% |
| Illinois | 4.95% |
| Massachusetts | 5.0% / 9.0% |
| Georgia | 5.39% |
| Idaho | 5.8% |
States With the Highest Top Income Tax Rates
| State | Top Rate |
|---|---|
| California | 13.3% |
| Hawaii | 11.0% |
| New York | 10.9% |
| New Jersey | 10.75% |
| Oregon | 9.9% |
| Minnesota | 9.85% |
| Vermont | 8.75% |
| Wisconsin | 7.65% |
| Maine | 7.15% |
| Iowa | 6.0% |
Top rates apply only to the highest income tiers. Effective rates for typical earners in high-tax states are considerably lower than the top marginal rate.
Total Tax Burden: The Full Picture
Income tax is only one part of the state tax picture. A complete comparison must include:
State Sales Tax
Range: 0% (OR, MT, NH, DE, AK) – 7.25% (CA)
Plus local sales taxes up to 5% in some jurisdictions.
Property Tax
Range: 0.27% (Hawaii) – 2.23% (New Jersey)
Expressed as effective rate on home value. Texas (~1.6%) and Illinois (~2.0%) are high despite varying income tax.
Gas Tax
Range: Varies widely
California ($0.68/gallon) vs. Alaska ($0.09/gallon). Matters for commuters.
Estate / Inheritance Tax
Range: 12 states + DC impose estate tax
Massachusetts starts at $1M; federal estate tax starts at $13.9M (2026 est.).
| State | Income Tax | Sales Tax (avg) | Property Tax | Overall Burden |
|---|---|---|---|---|
| Alaska | None | 1.7% (local only) | Low-Med | Very Low |
| Wyoming | None | 5.3% | Low | Very Low |
| Florida | None | 7.0% | Medium | Low |
| Texas | None | 8.2% | High | Medium |
| Nevada | None | 8.2% | Low-Med | Low-Med |
| California | 1%–13.3% | 8.7% | Low (Prop 13) | Very High |
| New York | 4%–10.9% | 8.5% | Med-High | Very High |
| New Jersey | 1.4%–10.75% | 6.6% | Very High | Very High |
| Illinois | 4.95% flat | 8.7% | Very High | High |
| Pennsylvania | 3.07% flat | 6.3% | Medium | Medium |
Does Moving to a No-Tax State Actually Save You Money?
This is the question most people want answered — and the honest answer is: it depends on your income, your lifestyle, and the cost of living in both states.
When moving to a no-tax state clearly wins
- • You earn a high income in a high-tax state (CA 13.3%, NY 10.9%) and can work remotely
- • You have significant investment income, capital gains, or retirement distributions
- • You're moving to a state with similar or lower cost of living (e.g., California → Texas or Nevada)
- • Your employer is in the no-tax state, so you avoid both state income AND sourcing issues
When moving to a no-tax state may not save much
- • Moving from a low/moderate income tax state (PA 3.07%) — the savings are minimal
- • Cost of living in the destination is significantly higher (e.g., Nevada: Las Vegas housing has risen sharply)
- • The no-tax state compensates with very high property taxes (Texas) or sales taxes
- • You still work remotely for a company in your old state — your income may still be taxed at source
- • Healthcare, housing, or insurance costs in the new state are substantially higher
Example: California ($150K income) → Texas
A single Californian earning $150,000 could save approximately $8,000–$10,000 per year in state income tax by moving to Texas. But Texas property taxes on an equivalent home may be $4,000–$6,000 higher per year than California's Prop 13-limited tax. The net savings shrinks to $2,000–$6,000 — significant but not a windfall unless housing costs are also comparable.
For high earners ($500K+), state income tax savings in California can exceed $50,000/year — making the move financially compelling regardless of property tax differences.
Related Tools
- Tax Bracket Estimator → Estimate your combined federal and state tax burden by state.