No Income Tax States
Last Updated: January 2026
Nine states do not impose a state income tax on wages. Employers with employees in these states are not required to withhold state income tax from paychecks.
States Without Income Tax
| State | Status | Notes |
|---|---|---|
| Alaska | No income tax | Constitutional ban on state income tax; no local income taxes |
| Florida | No income tax | Constitutional ban on state income tax |
| Nevada | No income tax | Constitutional ban on state income tax |
| New Hampshire | No income tax | Interest/dividend tax fully repealed January 1, 2025 |
| South Dakota | No income tax | Constitutional ban on state income tax |
| Tennessee | No income tax | Hall Tax (interest/dividends) fully repealed January 1, 2021 |
| Texas | No income tax | Constitutional ban on state income tax |
| Washington | No income tax | No income tax on wages; capital gains tax on high earners |
| Wyoming | No income tax | Constitutional ban on state income tax |
State Details
Alaska
Alaska has no state income tax and no state sales tax. Some local jurisdictions impose local sales taxes, but there are no local income taxes. The state constitution prohibits a state income tax.
ProPay Setup: No state withholding required.
Florida
Florida's constitution prohibits a state personal income tax. The state relies primarily on sales tax revenue. There are no local income taxes.
ProPay Setup: No state withholding required.
Nevada
Nevada has no state income tax, protected by constitutional prohibition. The state generates revenue primarily from gaming and sales taxes. No local income taxes exist.
ProPay Setup: No state withholding required.
New Hampshire
As of January 1, 2025, New Hampshire no longer taxes any form of income. The Interest and Dividends Tax (which taxed investment income at 5%) was fully phased out. Wages were never subject to New Hampshire income tax.
ProPay Setup: No state withholding required.
South Dakota
South Dakota has no state income tax, with constitutional protections against implementing one. The state has no local income taxes.
ProPay Setup: No state withholding required.
Tennessee
Tennessee eliminated its Hall Tax on interest and dividend income effective January 1, 2021. Wages were never subject to Tennessee income tax. No local income taxes exist.
ProPay Setup: No state withholding required.
Texas
Texas has a constitutional prohibition against a state income tax. There are no local income taxes. The state relies on sales tax and property tax revenue.
ProPay Setup: No state withholding required.
Washington
Washington has no state income tax on wages. However, a capital gains tax of 7% applies to gains over $262,000 from sales of stocks and bonds (not applicable to payroll). Some cities impose a Business & Occupation (B&O) tax on businesses, but this does not affect employee withholding.
ProPay Setup: No state withholding required for wages.
Wyoming
Wyoming has no state income tax, protected by constitutional prohibition. There are no local income taxes.
ProPay Setup: No state withholding required.
Important Considerations
Multi-State Employees
If an employee works in multiple states and one of those states is a no-income-tax state:
- Wages earned while working in the no-income-tax state are not subject to that state's withholding
- Wages may still be subject to withholding for the employee's resident state or other work states
Resident State Taxation
Employees who live in a state with income tax but work in a no-income-tax state may still owe taxes to their resident state. Withholding should be set up for the resident state.
Local Taxes
While these states have no state income tax, always verify there are no applicable local taxes. Currently, none of the nine no-income-tax states have local income taxes.
Related Topics
- State Income Tax Withholding Guide Overview
- Flat Tax States
- Progressive Tax States
- Multi-State Withholding