MOST households want to pay less in tax today than they did yesterday, but you may not know how to.
A state with no income tax might be the solution, and it could help you save money every year.
1
Below are the nine states with no income tax and what you can expect to pay in other taxes, according to Investopedia.
Just be aware that if a state does not have a state income tax, it does not necessarily mean that it is cheaper to live there.
You might want to wait before you pack all of your belongings and move.
It is important to do your research and ensure that the absence of the taxes mentioned below will put extra cash in your wallet.
Alaska
Alaska has no sales tax with an average local tax rate of 1.82%.
The rate of effective property tax rate is at 1.07%
The state sits at 35th in affordability, 36th in cost of living and 30th in housing affordability.
Florida
The next state on the list with no income tax is Florida.
There is also no inheritance tax or estate tax.
The state does have a 6% sales tax, and an average local tax rate of 1%.
The effective property tax rate is at 0.71%.
Nevada
Very similar to Florida, Nevada relies heavily on revenue from high sales taxes.
From groceries to clothes, alcohol, and gambling, mostly everything has a sales tax in Nevada.
Despite Nevada’s high sales tax of 6.85%, the state does have one of the lowest property tax rates of 0.44%.
The state also does not have an inheritance tax or estate tax.
New Hampshire
New Hampshire does not tax earned income, but the state does tax dividends and interest.
The state also has no sales tax or inheritance tax.
It does however have an effective property tax rate of 1.61%.
The state’s average property tax rate is the third-highest in the country.
South Dakota
South Dakota is known for being the location of Mount Rushmore, panoramic views of nature, and having no state income.
The state does have a sales tax 4.2%, and an average local tax rate of 1.91%.
South Dakota’s property taxes are at 1.01%.
Tennessee
Next on the list is Tennessee.
Tennessee also has high sales taxes at 7%.
It also has an average local tax rate of 2.55% and an effective property tax rate of 0.48%.
Texas
Texas has a 6.25% sales tax with an average local tax rate of 1.95%.
It also has an effective property tax rate of 1.47%.
The state sits 28th in affordability.
Washington
Washington may have no state income tax, but residents pay high sales and excise taxes.
It ranks 47th in affordability.
Gasoline is also more expensive in Washington than in other states.
In addition to the high sales tax and gasoline prices, the state has a high cost of living too.
Washington has a 6.5% sales tax, and. an average local tax rate of 2.88%.
It also has an effective property tax rate of 0.76%.
Wyoming
With an estimated six people per square mile, Wyoming is the second least densely populated state.
The citizens of this beautiful state pay no state income taxes and retirement income taxes. They also enjoy low sales tax rates.
Wyoming accumulates most of its tax revenue from natural resources, primarily oil, to make up for the lack of a personal income tax.
It has a 4% sales tax, as well as an average local tax rate of 1.44% and an effective property tax rate of 0.55%.
The state is ranked 19th in affordability.
2025 Tax Season
Tax season started on January 27 and folks must have theirs completed filed on April 15.
Those who fail to file by that time may face penalties.
However, taxpayers who need more time may file for an extension – this gives them until October 15.
The way to do this is by filling out Form 4868, the Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
This can be done by mail, online with an IRS e-filing partner, or through a tax professional.
While there’s no set schedule, the IRS revealed that taxpayers may receive refunds within 21 days of filing.
Just be sure to avoid making mistakes on any forms as that could tack on extra time.
Those filing through mail will likely get their returns within a month or could even face delays as the IRS processes millions.
As of January 31, the average refund amount totaled $1,928, per the IRS.
This is compared to the $1,395 for the same period in 2024.
The average direct deposit refund for 2025 was even higher, the IRS said, at $2,069.
To check the status of your refund, The IRS has an online tool called Where’s My Refund?
This works within 24 hours of e-filing and generally within four weeks of filing a paper return.
