What States Have State Income Tax and Which Don’t?

Forty-two states and the District of Columbia levy an individual income tax; eight states do not. The states with no income tax on wages are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Among the states that do tax income, some charge every resident the same flat percentage while others use graduated brackets that climb past 13 percent at the top. Which states have a state income tax, and how much you actually owe, depends on where you live, where you work, and how each state structures its rates.

The Eight States With No Income Tax

If you live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, or Wyoming and earn all your income there, you won’t file a state income tax return at all.

New Hampshire is the newest addition. The state used to tax interest and dividend income at rates that were being phased down each year, but that tax was fully repealed for tax years beginning after December 31, 2024. New Hampshire residents owe no state income tax of any kind starting with their 2025 returns.1NH Department of Revenue Administration. Interest and Dividends Tax

Washington sits in a gray zone. The state does not tax wages, salaries, or business income, but since 2022 it has imposed a 7 percent tax on long-term capital gains above an annual threshold set at $278,000 for 2025. Most residents never encounter this tax, but investors selling large stock positions or business interests can face a meaningful bill.2Washington Department of Revenue. Capital Gains Tax

States With Flat Income Tax Rates

A growing number of states charge every taxpayer the same percentage regardless of income. Between 2021 and 2026, roughly a dozen states either adopted a flat rate for the first time or enacted legislation to transition to one. As of January 2026, at least 15 states use a single-rate income tax on wages and salary:3Tax Foundation. State Individual Income Tax Rates and Brackets, 2026

Kansas is collapsing its two existing brackets, both above 5 percent, down to a single rate of 4 percent through a gradual transition.6Tax Foundation. Flat Tax Revolution: State Income Tax Reform

In four of these states the flat structure is written into the state constitution, which means switching to graduated brackets would require a constitutional amendment rather than a simple legislative vote. Colorado, Illinois, Michigan, and Pennsylvania all carry that protection.7Institute on Taxation and Economic Policy. How Many States Have a Flat Income Tax

Massachusetts is worth flagging separately. Its base income tax rate is a flat 5 percent, but voters approved a constitutional amendment in 2022 adding a 4 percent surtax on taxable income above roughly $1.08 million (the threshold adjusts for inflation). That effectively makes Massachusetts a two-bracket state for high earners, with a combined top rate of 9 percent.8Massachusetts Department of Revenue. Massachusetts 4% Surtax on Taxable Income

States With Graduated Income Tax Brackets

About 27 states and the District of Columbia divide taxable income into tiers, with each successive tier taxed at a higher rate. This is the most common structure for state income taxes and uses the same basic concept as the federal system. The number of brackets varies: some states get by with three or four, others carve out a dozen or more.

The differences at the top end are dramatic. California’s top marginal rate reaches 13.3 percent on income above $1 million, and an additional payroll tax for disability insurance can push the effective rate on wages even higher. Hawaii hits 11 percent, Oregon charges 9.9 percent, and Minnesota tops out at 9.85 percent.3Tax Foundation. State Individual Income Tax Rates and Brackets, 2026

At the other end, many graduated-rate states keep their lowest brackets at 1 to 3 percent, so a single filer earning a modest salary might owe just a few hundred dollars. The jump to higher rates usually doesn’t hit until income crosses five figures or more. Being “in” a high bracket doesn’t mean all your income is taxed at that rate, only the portion above the bracket’s threshold.

Most states build their income tax on top of your federal return. Roughly three-quarters of the states with an income tax use federal adjusted gross income as the starting point, then layer on their own deductions, credits, and exemptions. A few states calculate income independently, which adds filing complexity.

States With Local Income Taxes

In 16 states, some residents face a third layer of income tax from their city, county, or school district. More than 5,000 local jurisdictions impose these taxes, though they cluster in a handful of states rather than spreading evenly across the country.9Tax Foundation. Local Income Taxes: A Primer

The heaviest concentrations are in Maryland, where every county levies a local income tax; Ohio, which has more than 800 local taxing jurisdictions; and Pennsylvania, where most municipalities charge an earned income tax. New York City also stands out with rates that range from about 3.1 to 3.9 percent on top of the state’s already-high brackets. Philadelphia’s local wage tax runs close to 3.9 percent as well.

Local rates are small compared to state taxes, but they add up. Maryland county income taxes alone average about 2.4 percent of adjusted gross income statewide. In Ohio and Pennsylvania, rates typically run from a fraction of a percent up to about 3 percent, depending on the municipality.9Tax Foundation. Local Income Taxes: A Primer

Some states handle local tax collection through the state return, so there’s no separate filing. Others require a separate local return. Reciprocity agreements or credits between overlapping jurisdictions usually prevent true double taxation, but you may need to claim those credits yourself.

How the No-Tax States Raise Revenue Instead

States that skip income taxes still need revenue, and they tend to collect more through other channels. The most common substitute is a higher-than-average sales tax. Tennessee’s combined state and local rate averages about 9.6 percent, Washington’s roughly 9.5 percent, and Texas comes in around 8.2 percent. For comparison, the national median combined rate sits near 7 percent.10Tax Foundation. State and Local Sales Tax Rates, 2026

Alaska is the outlier. It has no state sales tax and no income tax. The state funds itself largely through oil and gas revenue and pays residents an annual check from the Alaska Permanent Fund. Local governments do levy small sales taxes that average under 2 percent, but the overall tax burden on residents is among the lowest in the country.10Tax Foundation. State and Local Sales Tax Rates, 2026

Several no-income-tax states also rely on business-level taxes that reach residents indirectly. Texas charges a franchise tax, Washington imposes a business and occupation tax on gross receipts, and Nevada levies a commerce tax on companies above a revenue threshold. These don’t appear on your personal return, but they can raise prices for goods and services or push down wages in the local economy.

What If You Live in One State and Work in Another

Your state tax obligations depend on where you’re considered a resident, and that’s less straightforward than most people assume. States generally use two overlapping tests: domicile (your permanent home) and statutory residency (based on physical presence above a day-count threshold).

The most common statutory residency rule kicks in when you maintain a home in a state and spend 183 or more days there during the tax year. New York, New Jersey, Massachusetts, and Utah all use variations of this threshold. Hawaii uses 200 days, and Idaho requires 270. Some states, including California and Illinois, skip the day-count approach and instead weigh the totality of your connections.

If you’re domiciled in one state but spend enough days in another, both can claim you as a resident on your full income. Most states will give you a credit for taxes paid to the other state to prevent outright double taxation, but the credit doesn’t always make you whole. Five states use a “convenience of the employer” rule that taxes you based on where your employer is located rather than where you actually perform the work. New York is the most aggressive on this front; Connecticut, Delaware, Nebraska, and Pennsylvania maintain similar rules.11Tax Foundation. Tax Reciprocity Agreement

For regular cross-border commuters, reciprocity agreements simplify the picture. These are pacts between neighboring states that let you pay income tax only in the state where you live, even though you earn money in the other state. About 17 states participate in at least one agreement. Common pairs include Pennsylvania and New Jersey, Virginia and Maryland, and the Midwestern cluster of Illinois, Indiana, Iowa, Kentucky, Michigan, Ohio, and Wisconsin. If your two states have an agreement, you file a withholding exemption form with your employer so taxes come out of your paycheck at your home state’s rate instead. Without an agreement, you typically file a nonresident return in the work state and a resident return at home, claiming a credit to avoid being taxed twice on the same income.