Tax Disclaimer: This article is for informational purposes only and does not constitute tax advice. State tax laws change frequently. Verify current rates with your state’s department of revenue or a licensed tax professional before making decisions.

State Income Tax Comparison: All 50 States Ranked and Explained

How We Evaluated: Our editorial team researched State Income Tax Comparison using state revenue department filings, Tax Foundation data, and current legislative updates. Rankings reflect marginal rates, effective rates, standard deductions, and notable exemptions. Last updated: March 2026. See our editorial policy for full methodology.

Last updated: March 2026 | Reviewed by Taxo Editorial Team

Key Takeaways
States With No Income Tax
All 50 States Ranked by Top Marginal Rate
Flat Tax vs. Graduated Tax States
States That Changed Rates in 2026
Beyond Income Tax: Total Tax Burden
Best and Worst States for Different Taxpayer Types
What’s Changed in 2026
Common Mistakes to Avoid
Frequently Asked Questions
Sources
Related Articles

Key Takeaways

Nine states charge no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
California has the highest top marginal rate at 13.3%, followed by Hawaii (11%), New Jersey (10.75%), and Oregon (9.9%).
Fifteen states now use a flat income tax, with Ohio joining in 2026 at a flat 2.75% on income above $26,050.
Eight states lowered their income tax rates in 2026, continuing a multi-year trend toward lower and flatter tax structures.
Income tax is only one piece of the picture. Sales tax, property tax, and other levies can make a “no income tax” state more expensive overall.

States With No Income Tax

Nine states do not levy a broad-based personal income tax as of 2026:

State	Notes
Alaska	No income tax, no state sales tax. Revenue funded primarily by oil royalties. Local sales taxes may apply.
Florida	No income tax. Revenue comes from a 6% state sales tax (up to 8.5% with local surtaxes) and tourism-related taxes.
Nevada	No income tax. Revenue from gaming taxes, sales tax (6.85% state rate), and commerce tax on businesses.
New Hampshire	No income tax as of 2025. Previously taxed interest and dividend income at 3%, but that tax was fully phased out effective January 1, 2025.
South Dakota	No income tax, no corporate income tax. Revenue from a 4.2% sales tax and various excise taxes.
Tennessee	No income tax. The Hall Income Tax on interest and dividends was fully repealed in 2021. Sales tax rate of 7% (one of the highest in the nation).
Texas	No income tax. Revenue from a 6.25% state sales tax (up to 8.25% with local taxes), property taxes, and franchise (margin) tax on businesses.
Washington	No broad income tax. However, Washington imposes a 7% capital gains tax on gains above $250,000, and enacted a 9.9% high-income tax on income exceeding $1 million effective for tax years starting January 1, 2028.
Wyoming	No income tax, no corporate income tax. Revenue primarily from mineral extraction taxes and a 4% state sales tax.

Living in a no-income-tax state does not necessarily mean you pay less tax overall. States without income taxes often make up revenue through higher sales taxes, property taxes, or other levies. Texas, for example, has some of the highest property tax rates in the nation, and Tennessee’s combined state and local sales tax rate is among the highest nationally.

All 50 States Ranked by Top Marginal Rate

The following table ranks all 50 states and the District of Columbia by their top marginal income tax rate for 2026. States marked with (F) use a flat tax structure.

Rank	State	Top Rate	Structure
1	California	13.3%	Graduated (10 brackets)
2	Hawaii	11.0%	Graduated (12 brackets)
3	New Jersey	10.75%	Graduated (7 brackets)
4	Oregon	9.9%	Graduated (4 brackets)
5	Minnesota	9.85%	Graduated (4 brackets)
6	New York	9.65%	Graduated (9 brackets)
7	Vermont	8.75%	Graduated (4 brackets)
8	District of Columbia	8.75%	Graduated (7 brackets)
9	Iowa	8.53%	Graduated (4 brackets)
10	Wisconsin	7.65%	Graduated (4 brackets)
11	Maine	7.15%	Graduated (3 brackets)
12	Connecticut	6.99%	Graduated (7 brackets)
13	South Carolina	6.4%	Graduated (3 brackets)
14	Idaho	5.695%	Flat (F)
15	Montana	5.9%	Graduated (2 brackets)
16	Nebraska	5.84%	Graduated (4 brackets)
17	Massachusetts	5.0%	Flat (F) + 4% surtax on income over $1M
18	Delaware	6.6%	Graduated (7 brackets)
19	West Virginia	5.12%	Graduated (5 brackets)
20	Kansas	5.7%	Graduated (3 brackets)
21	Virginia	5.75%	Graduated (4 brackets)
22	Rhode Island	5.99%	Graduated (3 brackets)
23	Arkansas	3.9%	Graduated (2 brackets)
24	New Mexico	5.9%	Graduated (5 brackets)
25	Alabama	5.0%	Graduated (3 brackets)
26	Georgia	5.39%	Flat (F)
27	Maryland	4.0%	Graduated (8 brackets) + local taxes
28	Louisiana	4.25%	Graduated (3 brackets)
29	Missouri	4.7%	Graduated (10 brackets)
30	Oklahoma	4.75%	Graduated (6 brackets)
31	Mississippi	4.7%	Graduated (2 brackets)
32	Colorado	4.25%	Flat (F)
33	Illinois	4.95%	Flat (F)
34	Utah	4.55%	Flat (F)
35	Michigan	4.05%	Flat (F)
36	North Carolina	3.99%	Flat (F)
37	Kentucky	3.5%	Flat (F)
38	Indiana	2.95%	Flat (F)
39	Pennsylvania	3.07%	Flat (F)
40	North Dakota	1.95%	Graduated (2 brackets)
41	Ohio	2.75%	Flat (F) — new for 2026
42	Arizona	2.5%	Flat (F)
43-50	AK, FL, NV, NH, SD, TN, TX, WA, WY	0%	No income tax

Note: Rankings may vary depending on whether local income taxes (e.g., Maryland counties, New York City) and surtaxes (e.g., Massachusetts, California) are included. Washington’s capital gains and high-income taxes are excluded from this ranking.

Flat Tax vs. Graduated Tax States

States take two fundamental approaches to income taxation:

Flat Tax States (15 states in 2026)

A flat tax means all taxable income is taxed at the same rate. These states include Arizona (2.5%), Colorado (4.25%), Georgia (5.39%), Idaho (5.695%), Illinois (4.95%), Indiana (2.95%), Kentucky (3.5%), Massachusetts (5.0% + surtax), Michigan (4.05%), North Carolina (3.99%), Ohio (2.75% — new for 2026), Pennsylvania (3.07%), and Utah (4.55%).

The trend toward flat taxes has accelerated in recent years. Ohio became the newest flat tax state in 2026, converting from a graduated system. Several states including Georgia, Iowa, and Mississippi have been reducing the number of brackets and moving toward flatter structures.

Graduated Tax States (28 states + DC)

Graduated (progressive) systems tax higher income at higher rates, similar to the federal structure. California has the most brackets (10), with rates ranging from 1% to 13.3%. Hawaii has 12 brackets. Most graduated states have 3-7 brackets.

Which Is Better?

Flat taxes are simpler and create less incentive to manipulate income timing. Graduated taxes shift more of the burden to higher earners. The “better” system depends on your income level and policy perspective.

States That Changed Rates in 2026

Eight states lowered their income tax rates effective January 1, 2026:

State	2025 Rate	2026 Rate	Change
Kentucky	4.0% (flat)	3.5% (flat)	-0.50%
North Carolina	4.25% (flat)	3.99% (flat)	-0.26%
Ohio	Graduated (0%-3.5%)	2.75% (flat)	Converted to flat
Indiana	3.0% (flat)	2.95% (flat)	-0.05%
Maryland	4.4% (top rate)	4.0% (top rate)	-0.40%
Iowa	Continued reduction	8.53% (top rate)	Ongoing phased cuts
Arkansas	3.9% (top rate)	3.9% (flat on top bracket)	Bracket simplification
Georgia	5.49% (flat)	5.39% (flat)	-0.10%

The trend is clear: states are competing for residents and businesses by lowering income tax rates. Several states have enacted multi-year rate reduction plans that will continue through 2027 and beyond. Indiana, for example, is scheduled to drop to 2.9% in 2027.

Beyond Income Tax: Total Tax Burden

Evaluating a state’s tax environment based solely on income tax rates is misleading. A complete analysis must consider:

Sales Tax

Five states have no state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local sales taxes. The highest combined state-and-local rates are found in Louisiana, Tennessee, Arkansas, Washington, and Alabama, where rates can exceed 9-10%.

Property Tax

Property tax rates vary enormously. New Jersey has the highest effective property tax rate (averaging approximately 2.2% of home value), followed by Illinois, Connecticut, and New Hampshire. Hawaii and Alabama have the lowest effective rates (below 0.4%).

Other Taxes and Fees

States also levy estate taxes (12 states + DC), inheritance taxes (6 states), franchise taxes, gross receipts taxes, and various excise taxes. Some cities add local income taxes (New York City, Philadelphia, Detroit, and many Ohio municipalities).

Overall Tax Burden Rankings

When all taxes are combined, the states with the highest overall tax burden tend to be New York, Connecticut, New Jersey, Illinois, and California. The lowest overall burdens are typically found in Alaska, Wyoming, Tennessee, South Dakota, and Florida.

Best and Worst States for Different Taxpayer Types

Retirees

Best: Florida, Nevada, Wyoming, South Dakota, Tennessee, Alaska, and Texas (no income tax on any retirement income). Pennsylvania and Mississippi also exempt most retirement income.

Worst: California, Minnesota, Vermont, Connecticut, and Nebraska (tax most or all retirement income at regular rates).

Remote Workers

Best: States with no income tax, plus flat-tax states with low rates (Arizona at 2.5%, Indiana at 2.95%). Also consider whether your employer’s state will claim tax on your wages.

Worst: High-tax states with aggressive nexus rules. New York’s “convenience of the employer” rule can tax remote workers who work from home for a New York employer, even if they live in another state.

Small Business Owners

Best: Wyoming, South Dakota, Nevada (no income tax, no corporate tax). Delaware and Nevada for entity-friendly laws. Texas and Washington for no income tax (though Washington’s B&O tax and Texas franchise tax apply to businesses).

Worst: California (13.3% top rate plus minimum franchise tax), New Jersey (10.75%), and Minnesota (9.85%).

High Earners ($500K+)

Best: No-income-tax states. Among states with income tax, Arizona (2.5% flat), North Carolina (3.99% flat), and Indiana (2.95% flat) offer the lowest top rates.

Worst: California (13.3%), Hawaii (11%), New Jersey (10.75%), and New York (9.65% state + up to 3.88% NYC).

What’s Changed in 2026

The state income tax landscape continues to shift rapidly. Key developments for 2026 include:

Rate Reductions

Eight states lowered their income tax rates for 2026 (see detailed table above). This continues a trend that has seen more than 20 states cut rates since 2021. Ohio’s conversion to a flat tax is particularly significant, joining a growing group of flat-tax states that now includes 15 members.

OBBBA Conformity

States vary in whether they conform to the OBBBA’s new federal deductions (tips, overtime, car loan interest, senior bonus). Some states automatically conform to the Internal Revenue Code and adopt these deductions by default. Others decouple from specific federal provisions. Check your state’s conformity status before assuming you can claim OBBBA deductions on your state return.

Washington’s High-Income Tax

Washington State enacted a 9.9% tax on income exceeding $1 million, effective for tax years beginning January 1, 2028. While it does not affect 2026 returns, high-income Washington residents should begin planning now.

Remote Work Nexus Issues

Multistate taxation of remote workers remains contentious. Several states have updated their nexus rules, and the “convenience of the employer” doctrine continues to create disputes for workers living in one state but employed by companies in another.

Common Mistakes to Avoid

Choosing where to live based solely on income tax rates. A state with no income tax may have high property taxes, sales taxes, or cost of living that offset the income tax savings. Always calculate total tax burden.
Ignoring local income taxes. Maryland counties, New York City, many Ohio cities, and other localities impose their own income taxes. These can add 1-4% on top of the state rate.
Assuming you only owe tax in one state. If you earn income in multiple states, work remotely for an out-of-state employer, or moved mid-year, you may owe taxes in more than one state. Most states offer credits for taxes paid to other states, but the rules are complex.
Not updating state withholding after a move. When you move from a high-tax to a low-tax state (or vice versa), update your W-4 and any state withholding forms immediately.
Overlooking state conformity differences. Just because the federal government allows a deduction does not mean your state does. Many states decoupled from the SALT cap, and not all states conform to the new OBBBA deductions.

Frequently Asked Questions

Which state has the highest income tax?

California has the highest top marginal income tax rate at 13.3% (including the 1% mental health services surcharge on income above $1 million). Hawaii is second at 11%.

Which states have no income tax?

Nine states have no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire was the most recent addition, fully eliminating its tax on interest and dividends as of January 1, 2025.

What is a flat tax state?

A flat tax state applies the same tax rate to all taxable income regardless of how much you earn. Fifteen states use a flat tax as of 2026, with rates ranging from 2.5% (Arizona) to 5.695% (Idaho).

Do I have to pay taxes in two states if I work remotely?

Possibly. If your employer is in a different state than where you live, both states may claim the right to tax your income. Most states offer a credit for taxes paid to other states, but rules vary. New York’s “convenience of the employer” rule is particularly aggressive.

Which state is best for retirees?

It depends on your income sources. Florida, Texas, Nevada, Wyoming, South Dakota, Tennessee, and Alaska have no income tax at all. Pennsylvania and Mississippi exempt most retirement income. See our dedicated guide for a full comparison.

Are state income taxes deductible on my federal return?

Yes, state and local income taxes (or sales taxes, if you elect) are deductible as an itemized deduction, subject to the $40,000 SALT cap for married filing jointly (increasing by 1% annually through 2029).

Sources

Tax Foundation: 2026 State Income Tax Rates and Brackets — accessed March 2026
Tax Foundation: 2026 State Tax Competitiveness Index — accessed March 2026
IRS: Federal Income Tax Rates and Brackets — accessed March 2026
Kiplinger: States That Won’t Tax Your Retirement Income in 2026 — accessed March 2026