Why State Taxes Matter for Your Take-Home Pay
The Impact of Where You Live
Where you live can dramatically affect how much of your paycheck you keep. Two people earning the same salary in different states can have take-home pay that differs by thousands of dollars per year. California's top income tax rate of 13.3% versus no income tax in Texas means a high earner keeping significantly more in Texas — though property taxes and cost of living also matter.
Nine States with No Income Tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming levy no state income tax on wages. These states fund government through other means — primarily sales tax, property tax, and in some cases natural resource revenues. For the average American earning $67,000, living in a no-income-tax state saves roughly $3,417 per year compared to the national average state tax rate of 5.1%.
Understanding Combined State Tax Burden
Income tax is just one piece of the state tax picture. States with no income tax often compensate with higher sales taxes (Tennessee at 9.55%) or property taxes (Texas at 1.60%). When evaluating where to live or work, consider the total tax burden: income tax + sales tax impact + property tax. Our state calculators show all three metrics side-by-side to give you the complete picture.
Explore More Free Calculators
All free, all updated for 2026