Key Takeaways
- 9 states have no income tax; Florida is the most popular for residency
- High-tax states like CA (13.3%) and NY (10.9%) cost residents thousands annually
- State taxes are in addition to federal taxes—this is money you can save
- Changing residency to Florida is legal and used by hundreds of thousands
State Income Tax Landscape
State income taxes vary dramatically across the United States. While nine states charge no income tax at all, others impose rates exceeding 10%. For high earners, this difference can mean tens of thousands of dollars annually.
States With No Income Tax
These nine states do not tax wage income:
| State | Income Tax | Notes |
|---|---|---|
| Florida | 0% | Most popular choice; strong domicile laws |
| Texas | 0% | Large state; no income tax |
| Nevada | 0% | Popular with California refugees |
| Washington | 0% | Has 7% capital gains tax on high earners |
| Wyoming | 0% | Low population; minimal audit risk |
| South Dakota | 0% | Popular with RVers |
| Alaska | 0% | Pays residents via Permanent Fund |
| Tennessee | 0% | Eliminated income tax fully in 2021 |
| New Hampshire | 0% | Eliminated interest/dividend tax in 2025 |
Why Florida? Florida combines 0% income tax with strong domicile establishment laws, year-round livability, and well-established services for remote workers and travelers. It's the most practical choice for most people.
Highest Income Tax States
These states have the highest top marginal income tax rates:
| State | Top Rate | Tax on $150K Income | Audit Risk |
|---|---|---|---|
| California | 13.3% | ~$10,500 | Extreme |
| Hawaii | 11.0% | ~$8,250 | Medium |
| New Jersey | 10.75% | ~$6,400 | High |
| Oregon | 9.9% | ~$9,000 | Medium |
| Minnesota | 9.85% | ~$7,850 | High |
| New York | 10.9% | ~$6,850 | Extreme |
| Vermont | 8.75% | ~$6,800 | Medium |
| D.C. | 10.75% | ~$8,500 | High |
| Massachusetts | 9.0% | ~$5,000 | High |
| Connecticut | 6.99% | ~$5,500 | High |
NYC Residents: New York City adds an additional 3.876% on top of the state rate, bringing total income tax to nearly 15% for high earners.
Potential Savings by Income Level
$5,000 - $50,000+
Annual savings depending on income and former state
| Annual Income | CA Savings | NY Savings | NJ Savings |
|---|---|---|---|
| $100,000 | $6,000 | $5,500 | $4,500 |
| $150,000 | $10,500 | $8,500 | $7,000 |
| $200,000 | $15,100 | $12,000 | $10,000 |
| $300,000 | $24,400 | $19,500 | $17,500 |
| $500,000 | $47,000 | $38,000 | $35,000 |
How State Income Tax Works
Federal vs State Tax
State income tax is separate from and in addition to federal income tax. When you file taxes:
- Federal return: Everyone files (1040), rates 10-37%
- State return: Filed with your resident state; rates vary by state
- Florida residents: No state return needed (0% tax)
What's Taxed?
- Domicile state: Typically taxes your worldwide income
- Work state: Taxes income earned physically in that state
- Florida: Taxes nothing—$0 on all income types
Is This Legal?
Absolutely. Changing your residency to a lower-tax state is:
- Legal: Recognized by courts and tax authorities nationwide
- Common: Hundreds of thousands do this every year
- Established: Clear procedures exist for domicile changes
- Your right: You can live wherever you choose in the US
Supreme Court Precedent: The US Supreme Court has consistently upheld an individual's right to establish domicile in any state. What matters is genuine intent—not just a mailing address.
Why Choose Florida Over Other No-Tax States?
- Established domicile process: Florida Statutes §222.17 provides clear legal framework
- Favorable weather: Year-round mild climate makes visits enjoyable
- No additional taxes: Some states have capital gains or other taxes; Florida has none
- Service availability: Well-developed industry for mail forwarding and residency services
- Compact state (nursing): Florida is in the Nurse Licensure Compact
- Infrastructure: Major airports, healthcare, and services throughout the state