States With No Income Tax: Is Moving for Taxes Worth It? The 2026 List, the Math and the Audit Trap

0:00He left California. It billed him $13 million

States with no income tax can save you money. Leaving is the hard part.

In 1991, an inventor moved from Southern California to Las Vegas, as patent money arrived. California's tax agency said he hadn't left until April 1992. It billed more than thirteen million dollars in taxes and fraud penalties.

In 2017, twenty-six years after the move, the state's tax board ruled he'd moved in October 1991, and dropped the fraud penalties. But his business was run from California for months, so he owed about one point nine million, plus interest.

Coming up: the nine states, what they charge instead, the math at two incomes, what retirees should check, and how your old state can still tax you. This is general information, not tax advice. Check with a tax professional for your situation.

I'm Daniel, from Majestic Moving Companies. Our team has more than thirty-five years in the moving industry. Let's get into it.

0:57The 9 states that don't tax your paycheck

So which states have no income tax in 2026? Nine states don't tax your paycheck: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

Two of them changed recently. Tennessee used to tax interest and dividends, and that ended in 2021. New Hampshire's version ended in 2025. So New Hampshire now taxes no personal income at all.

Washington has the fine print. It doesn't tax wages, but it does tax big investment gains. It's seven percent on long-term gains above a yearly deduction of more than a quarter million dollars, and nine point nine percent once taxable gains pass a million. Selling your home doesn't count, and neither does money in qualifying retirement accounts. So if you want a state with no capital gains tax, Washington isn't one.

And in 2026, Washington passed a tax on household income over a million dollars. Opponents took it to court and to the ballot. So check where it stands.

In the other eight, there's no state income tax return to file. That's a real saving. It just isn't the whole bill.

2:04What no-income-tax states charge instead

Here's what no-income-tax states charge instead. The money has to come from somewhere.

Start with sales tax. In mid-2026, Tennessee's average combined rate was about nine point six percent, and Washington's was almost the same. The Tax Foundation ranked them second- and third-highest in the country. On twenty thousand dollars of taxed shopping a year, that's about nineteen hundred dollars.

Then property tax. In the Tax Foundation's 2026 figures, built on Census data, New Hampshire homeowners paid about one and a half percent of their home's value a year. That was fifth-highest in the country. On a four-hundred-thousand-dollar home, that's about six thousand dollars a year.

Two questions come up a lot. Which states have no income tax and no sales tax? Two: New Hampshire and Alaska. But Alaska lets its towns add a sales tax, and New Hampshire taxes restaurant meals and hotel stays. And which states have no income tax and no property tax? None. Every state has property tax.

Want no income tax and a low property tax? Tennessee runs about half a percent. You just pay more at the register.

So compare the whole bill, not one line of it.

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3:37The math at $100,000 and $250,000

Is moving for taxes worth it? Here's the math for a classic move, Massachusetts to New Hampshire.

For a married couple, Massachusetts taxes wages at five percent, after a few small deductions. On a hundred thousand dollars a year, that's about forty-four hundred dollars in state income tax. On two hundred fifty thousand, about twelve thousand. In New Hampshire, it's zero.

Now the house. Using Tax Foundation state averages, New Hampshire property tax runs about one and a half percent of a home's value, and Massachusetts about one percent. On a five-hundred-thousand-dollar home, New Hampshire costs about twenty-five hundred dollars more a year.

So at a hundred thousand, the couple comes out about nineteen hundred dollars ahead. At two hundred fifty thousand, more than nine thousand ahead. Plus, New Hampshire has no sales tax.

Here's the catch. If they keep their jobs in Boston and commute, Massachusetts still taxes the pay they earn there. Then most of the income tax savings disappear, and the bigger property tax bill stays.

So the bigger the paycheck, the more no income tax is worth. The bigger the house, and the closer you still work to the old state, the less it's worth.

4:44Retirees: your income tax may already be zero

Thinking about a no-income-tax state for retirement? First, check what your current state takes from your retirement income. It may already be nothing.

All nine no-income-tax states leave Social Security alone. So do most states that do have an income tax. In 2026, only eight states tax Social Security, according to both AARP and Kiplinger.

Some states go further. Illinois doesn't tax Social Security, pensions, 401(k)s or IRAs. Pennsylvania doesn't tax Social Security, or retirement plan payments once you've retired under the plan's rules.

So picture a retired couple in Illinois, with forty thousand dollars of Social Security and a fifty-thousand-dollar pension. Their Illinois income tax on that is zero. Moving to a no-income-tax state saves them nothing on income tax.

What can change is property tax. By the Tax Foundation's figures, Illinois homeowners pay almost two percent of their home's value a year, among the highest rates in the country. On a three-hundred-thousand-dollar home, that's about fifty-six hundred dollars. Compare that, and the sales tax, with what you'd pay in the new state. And ask the new county about senior property tax breaks before you buy.

For retirees, the income tax may already be zero. The house is where the money is.

6:01They moved to Florida. New York still taxed them

Can New York still tax you after you move to Florida? A case decided in October 2025 shows how.

A married couple from New York's Finger Lakes bought a condo in Naples, Florida, in 2014. In 2018, they got Florida driver's licenses, registered to vote there and signed Florida declarations of domicile. On their New York return, they said they'd moved out that October.

In 2020, New York audited them. Auditors used the couple's cell phone bills to count their days. In 2018, they spent a hundred and eighty-six days in New York.

They had also kept their lake house, and full memberships at two New York country clubs. The husband was still drawing a salary from his New York company. And the family crystal they offered as proof had gone to Florida back in 2014.

New York's Tax Appeals Tribunal ruled that New York was still their home for tax purposes in 2018 and 2019. That meant about sixty thousand dollars in tax, plus interest. The tribunal said papers like voter registration count for less than how a person actually lives.

Auditors weigh five things: your home, your business, your time, the things you treasure, and your family. Move all five, and New York has much less to argue with.

7:18Remote job in New York? The tax can follow you

Work remotely for a New York company? Move to a no-income-tax state, and the tax can follow you.

New York has a convenience of the employer rule. If you work from home in another state because you choose to, not because your employer needs you there, New York can count those days as New York workdays.

Here's how far it goes. In 1994 and 1995, a computer programmer in Tennessee worked for an organization based in Queens. About a quarter of his workdays were in the New York office. The rest were at home, about nine hundred miles away. New York taxed all of his pay. In 2005, New York's highest court upheld that, four to three.

In July 2026, a New York appeals court applied the rule again, to a law professor's work-from-home days during the 2020 lockdown.

And New York isn't alone. At least seven states use a version of it, including Pennsylvania, Delaware and Nebraska.

There's a narrow exception, if your home office qualifies as a company office under New York's tests. So before you move, ask your employer, in writing, which state it will withhold tax for.

Moving your desk doesn't always move your tax.

8:26Time your move around the tax year

When in the year should you move to a no-income-tax state? Time your move around the tax year.

In the year you move, your old state taxes what you earned while you lived there. You file a part-year return for those months. And some income follows you out the door.

New York says income you earned while living there, but received after you left, is still New York income. Think of a bonus earned before the move, but paid after.

California splits stock options by workdays. Here's the state's own example. Options are granted, the employee works seven hundred days in California and three hundred elsewhere, then moves to Florida before cashing them in. California taxes seventy percent of that income. On a hundred thousand dollars, that's seventy thousand.

So before you pick a moving date, list the big payments coming: bonuses, stock vesting, a home sale, a business sale. Take that list to a tax professional. And keep your moving paperwork. A dated bill of lading, a lease or closing papers show when you actually left.

For most people, the move itself isn't deductible on a federal return. That break is for active-duty military and some intelligence-community employees.

Pick the date with your taxes in mind, not just the weather.

9:35Leaving California? Build your paper trail

Leaving California for a no-income-tax state? California's tax agency publishes what it looks at, so you can build your paper trail from day one.

Its starting point: spend more than nine months of a year in California, and you're presumed to be a resident. But the main test is where your closest connections are.

The state's list includes where your spouse and children live, your main home, your driver's license, your car registration and voter registration, your professional licenses, your banks, your doctors, dentists, accountants and lawyers, and your clubs and place of worship. And California says it's the strength of your ties that counts, not just the number.

So build the file as you go. Keep a log of where you sleep each night, with receipts that back it up. Switch your license, plates and voter registration early. Find new doctors and a new bank. Drop the old clubs. If you keep the California house, know that it counts as a tie.

Then file your last California return as a part-year resident.

Leaving isn't one moving day. It's a record you keep for years.

10:37The short version

So here's the short version. Look past the paycheck, because all nine states tax something else. Run the numbers with your own income and your own house. If you're retired, check what your state taxes now. If you work remotely, ask your employer where your pay is taxed. And when you leave, cut the ties, and keep the proof.

If you want help, go to majesticmovingcompanies.com. Get free quotes from professional movers who cover your route. It takes about thirty seconds, or you can chat with Robert, our moving assistant. And while you're there, there's a lot more to help you plan: guides on moving costs, delivery windows, car shipping and more.

I'm Daniel. Wherever you land, safe travels.