Which states have no income tax and does moving actually save money?

Nine states have no state income tax:

• Alaska — No income tax, no state sales tax (but local sales taxes exist)
• Florida — No income tax
• Nevada — No income tax
• New Hampshire — No income tax on wages (but taxes interest/dividends at 3% through 2024, fully repealed starting 2025)
• South Dakota — No income tax
• Tennessee — No income tax (dividend/interest tax was fully repealed in 2021)
• Texas — No income tax
• Washington — No income tax (but has a 7% capital gains tax on gains over $262,000)
• Wyoming — No income tax

Does moving actually save money? It's more complicated than it seems.

What you save:

• A high earner in California (13.3% top rate) or New York City (combined 12.7%+ state+city) moving to Texas or Florida could save $20,000–$100,000+ per year in state taxes alone
• The savings increase dramatically with income level

What you might pay MORE in:

• Property taxes: Texas has some of the highest property taxes in the country (average effective rate ~1.60% vs. California's ~0.71%). A $500,000 home in Texas costs ~$8,000/year in property tax vs. ~$3,550 in California.
• Sales taxes: Tennessee (9.55%), Louisiana (9.56%), and Texas (8.20%) have among the highest combined state+local sales tax rates
• Other taxes and fees: Higher vehicle registration, tolls, utility costs, or insurance premiums in some no-income-tax states
• Cost of living: While often lower, it varies significantly by metro area. Miami and Austin aren't cheap.

Establishing residency — the IRS and state auditors are watching:

• Simply buying property in a new state isn't enough. You need to establish domicile (intent to make it your permanent home)
• High-tax states like New York and California aggressively audit people who claim to have moved
• Key factors: where you spend the majority of your days (183+ days), driver's license, voter registration, where your family lives, where your doctor/dentist is, bank accounts, mail forwarding
• Keep a contemporaneous travel log documenting days in each state

Bottom line: For high earners ($200,000+), the income tax savings from moving to a no-tax state can be substantial. But run a complete analysis including property taxes, sales taxes, insurance costs, and cost of living before making the decision.