Where you live determines more about your tax bill than almost anything else. A $100,000 salary in Texas keeps $8,000+ more than the same salary in California — and that's before you factor in property taxes, sales taxes, and all the other ways your state chips away at your paycheck.
The problem is that most "best states for taxes" lists only look at income tax. That's a mistake. A state with no income tax can still crush you with property taxes or sales taxes. To get an honest answer, you need to look at the total tax burden — income, sales, and property taxes combined.
This guide ranks every state that matters, explains the trade-offs, and helps you figure out which states actually save you money in 2026.
Nine states charge zero state income tax on wages and salaries. For high earners, this alone can save $5,000 to $20,000+ per year. But each state makes up that revenue somewhere else.
Income tax gets all the headlines, but the real question is: what's the total effective tax rate? The ranking below combines state income tax, average sales tax, and average property tax into a single effective burden for a typical household.
| Overall Rank | State | Income Tax | Sales Tax (Avg.) | Property Tax |
|---|---|---|---|---|
| #1 | Wyoming | 0% | 5.36% | 0.55% |
| #2 | Nevada | 0% | 8.24% | 0.53% |
| #3 | Florida | 0% | 7.02% | 0.86% |
| #4 | Alaska | 0% | 1.82% | 1.07% |
| #5 | South Dakota | 0% | 6.40% | 1.14% |
| #6 | Tennessee | 0% | 9.55% | 0.62% |
| #7 | Texas | 0% | 8.20% | 1.68% |
| #8 | New Hampshire | 0%* | 0% | 1.86% |
| #9 | Washington | 0% | 9.29% | 0.87% |
| #10 | North Dakota | 1.10% | 6.97% | 0.94% |
*New Hampshire's interest and dividends tax is being phased out and reaches 0% in 2027.
Notice that Wyoming, Nevada, and Florida dominate the top three. It's not just about having no income tax — these states also keep sales and property taxes at reasonable levels. Texas, despite having no income tax, drops to #7 because its property tax rate is nearly three times Wyoming's.
Enter your salary and filing status to see exactly how much you'd keep in each state.
On the other end of the spectrum, these states combine high income taxes, steep property taxes, and aggressive sales taxes into a total burden that can exceed 12% of household income.
| Overall Rank | State | Top Income Tax | Sales Tax (Avg.) | Property Tax |
|---|---|---|---|---|
| #50 | New York | 10.90% | 8.52% | 1.62% |
| #49 | California | 13.30% | 8.68% | 0.71% |
| #48 | Connecticut | 6.99% | 6.35% | 2.15% |
| #47 | New Jersey | 10.75% | 6.63% | 2.23% |
| #46 | Illinois | 4.95% | 8.84% | 2.08% |
| #45 | Minnesota | 9.85% | 7.49% | 1.05% |
| #44 | Vermont | 8.75% | 6.24% | 1.83% |
| #43 | Maine | 7.15% | 5.50% | 1.24% |
| #42 | Rhode Island | 5.99% | 7.00% | 1.53% |
| #41 | Maryland | 5.75% | 6.00% | 1.07% |
New York takes the worst spot because it hits you from every direction — sky-high income taxes (especially in New York City, which adds its own 3.876% city tax), elevated sales taxes, and property taxes that average $8,000+ per year. California has the single highest income tax rate in the nation at 13.3%, though its property taxes are kept somewhat low by Proposition 13.
Pay attention to Illinois and Connecticut. Their income tax rates look moderate, but punishing property taxes — 2.08% and 2.15% respectively — push their total burden into the top five worst states.
This is the single most important point in this entire article: income tax alone tells you almost nothing about your actual tax burden.
Consider these examples:
The lesson: you need to look at your total tax burden based on your specific income, spending habits, and housing situation. A blanket "no income tax = best" analysis is wrong more often than it's right.
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Tax planning in retirement is a different game. Your income shifts from wages to Social Security, pensions, and investment withdrawals — and states tax those very differently.
Social Security: The majority of states do not tax Social Security benefits at all. Only about a dozen states tax Social Security income, and most of those offer generous exemptions for lower-income retirees. States that still partially tax Social Security include Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
Best states for retirees overall:
If you're self-employed or run a small business, state taxes hit differently. You're not just paying income tax — you're exposed to the full weight of state tax policy on business income, and you don't have an employer splitting FICA taxes with you.
No income tax = no state self-employment tax. In states like California, self-employed workers pay the 13.3% top income tax rate on every dollar of business profit. In Texas or Florida, that rate is zero. On $150,000 of self-employment income, that's a difference of nearly $20,000 per year.
QBI deduction considerations: The federal Qualified Business Income (QBI) deduction lets many self-employed workers deduct up to 20% of their qualified business income. This deduction is calculated on your federal return, so it applies regardless of which state you live in. However, living in a no-income-tax state means you get the QBI benefit federally without any offsetting state income tax, maximizing the total savings.
The best states for self-employed workers are generally the same as the best states overall: Wyoming, Florida, Nevada, South Dakota, and Texas, in roughly that order. If you work remotely and have the flexibility to choose your state, the math is hard to argue with.
The short answer: it depends on who you are.
See how much you'd pay in property taxes on your home value in any state.
The SALT (State and Local Tax) deduction lets you deduct state and local taxes — income tax, property tax, and sales tax — from your federal taxable income. But since the Tax Cuts and Jobs Act of 2017, that deduction is capped at $10,000 per year ($5,000 if married filing separately).
This cap disproportionately punishes residents of high-tax states. Here's why:
The SALT cap effectively makes high-tax states even more expensive for homeowners who itemize. If you're considering a move, factor in whether you're currently losing thousands of dollars per year in deductions you can't use because of the SALT cap. Moving to a low-tax state could make more of your taxes deductible — or eliminate the issue entirely.
Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes interest and dividends but not earned wages, and that tax is being phased out by 2027.
Wyoming ranks as the best state for overall tax burden in 2026. It has no state income tax, a low 4% state sales tax rate, and a property tax rate of just 0.55% — the lowest combined effective rate in the country.
New York consistently ranks as the worst state for total tax burden. High income tax rates (up to 10.9%, plus NYC's additional city tax), steep property taxes, and combined sales tax rates above 8% in most areas create an effective total burden that exceeds 12% for many residents.
It depends on your income level and personal situation. High earners, remote workers, and retirees often save tens of thousands of dollars annually by relocating to no-income-tax states. However, higher property taxes, sales taxes, and cost-of-living differences can offset those savings for lower and middle earners.
The SALT (State and Local Tax) deduction is capped at $10,000 per year for federal tax returns. This limits how much you can deduct for state income taxes, property taxes, and local taxes combined, which disproportionately impacts residents of high-tax states like New York, California, and New Jersey.
The best states for retirees include the nine no-income-tax states, plus states that fully exempt retirement income like Illinois, Mississippi, and Pennsylvania. Most states do not tax Social Security benefits, though a handful — including Colorado, Connecticut, and Montana — tax them partially.