Best (and Worst) States for Tax Burden — 2026 Edition
Nine states charge no income tax, but that's not the same as low tax — property and sales taxes pick up the slack. Here's how the states actually rank on combined tax burden, why the 'no income tax' states aren't automatically the cheapest, and what to check before treating a move as a tax strategy.
Nine US states charge no personal income tax, and it’s tempting to treat that as shorthand for “low tax.” It isn’t. States that skip income tax still have to fund roads, schools and everything else, and they do it through property tax, sales and excise tax, or both. Whether a no-income-tax state is actually cheap for you depends on whether you own a home, how much you spend, and what you earn it from — not just the absence of one line on a pay stub.
Why “no income tax” doesn’t mean “low tax”
Texas is the clearest example. It has no income tax, but according to WalletHub’s 2026 tax burden study, its property tax burden — 3.43% of personal income — is among the highest in the country, and its total combined burden of 7.69% lands it around the middle of the 50-state ranking, not near the bottom. Homeowners feel this directly: a median Texas home carries a property tax bill running into the thousands of dollars a year, reassessed regularly, regardless of income.
Washington tells a similar story from the sales tax side. It has no broad income tax either (it does tax capital gains above roughly $1 million a year, a narrow carve-out most residents never encounter), but its sales and excise tax burden of 5.87% of income is one of the highest in the country, pushing its total combined burden to 8.47% — above the middle of the range. A state that leans on sales tax instead of income tax shifts the cost toward everyone who spends money, which in practice means lower earners carry a proportionally bigger share.
The pattern holds generally: states give up one major revenue lever, they lean harder on the ones left. “No income tax” tells you how a state collects, not how much.
The 2026 rankings: highest and lowest combined burden
According to WalletHub’s Tax Burden by State study (published 31 March 2026, based on data collected as of March 2026), combined tax burden is measured as property tax, income tax, and sales/excise tax, each as a share of total personal income. The ten highest and ten lowest:
Highest combined tax burden
| Rank | State | Total | Property | Income | Sales/Excise |
|---|---|---|---|---|---|
| 1 | Hawaii | 13.30% | 2.62% | 3.20% | 7.48% |
| 2 | New York | 12.39% | 4.22% | 4.65% | 3.53% |
| 3 | Vermont | 11.10% | 4.89% | 2.75% | 3.46% |
| 4 | New Mexico | 10.75% | 2.22% | 2.25% | 6.28% |
| 5 | Maine | 10.01% | 3.95% | 2.71% | 3.35% |
| 6 | Illinois | 9.92% | 3.75% | 2.40% | 3.77% |
| 7 | Maryland | 9.70% | 2.54% | 4.28% | 2.88% |
| 8 | New Jersey | 9.52% | 4.38% | 2.42% | 2.72% |
| 9 | Oregon | 9.46% | 2.96% | 4.76% | 1.74% |
| 10 | Rhode Island | 9.29% | 3.67% | 2.16% | 3.47% |
Lowest combined tax burden
| Rank | State | Total | Property | Income | Sales/Excise |
|---|---|---|---|---|---|
| 50 | Alaska | 4.92% | 3.32% | 0.00% | 1.60% |
| 49 | New Hampshire | 5.38% | 4.33% | 0.13% | 0.91% |
| 48 | Tennessee | 6.21% | 1.60% | 0.00% | 4.61% |
| 47 | Florida | 6.27% | 2.52% | 0.00% | 3.74% |
| 46 | Delaware | 6.28% | 1.67% | 3.62% | 0.98% |
| 45 | South Dakota | 6.38% | 2.32% | 0.00% | 4.06% |
| 44 | Wyoming | 6.70% | 3.42% | 0.00% | 3.28% |
| 43 | North Dakota | 7.02% | 2.23% | 0.88% | 3.91% |
| 42 | Idaho | 7.04% | 1.92% | 1.84% | 3.29% |
| 41 | Oklahoma | 7.05% | 1.78% | 1.78% | 3.50% |
This lines up directionally with the Tax Foundation’s 2026 State Tax Competitiveness Index, which reflects state tax systems as of 1 July 2025: its five most competitive states — Wyoming, South Dakota, New Hampshire, Alaska and Florida — are the same states clustering at the low-burden end of the WalletHub table above, and its least competitive — New York, New Jersey, California, Connecticut — cluster at the high-burden end. The two studies use different methodologies but reach the same broad picture.
Three taxes, three different bites
The combined figure hides real differences depending on your situation, because each of the three components lands on a different behavior:
- Property tax hits homeowners, not renters — and hits hardest in states like New Hampshire (4.33% of income) and New Jersey (4.38%), where it’s the largest single component of the burden even though neither has a punishing income tax.
- Sales and excise tax hits spending, which makes it heaviest, proportionally, for lower earners who spend most of what they make. Hawaii (7.48%) and Washington (5.87%) show up here.
- Income tax hits earnings directly and is the only one of the three that scales cleanly with your marginal rate — see our guide on marginal vs effective tax rate for how that actually works.
A retiree living on savings and Social Security, a renter with no property tax exposure, and a remote worker with a high salary and modest spending can all move to the same “low tax” state and see very different savings, because each is exposed to a different one of the three levers.
What actually matters before you move
A ranking is a starting point, not an answer. Before treating a tax burden table as a relocation plan, weigh it against:
- Cost of living. A state with a lower tax burden can still be more expensive overall once housing, insurance and everyday costs are factored in.
- Insurance markets. Property and auto insurance premiums vary sharply by state and can erase a chunk of any tax saving, particularly in states with elevated weather or litigation risk.
- Your marginal rate, not the headline rate. The dollar value of moving away from an income tax state depends on your marginal rate — the rate on your top slice of income — not your effective rate. A high earner in a state with a steep top bracket has far more to gain from relocating than someone whose income sits mostly in lower brackets.
None of this shows up in a single combined-burden number, which is exactly why it’s worth checking before a decision, not after.
Retirement income: a different tax question entirely
Whether a state taxes retirement income is a separate question from its general tax burden ranking. The nine states with no income tax don’t tax retirement income by definition. Beyond that group, several states with a general income tax still exempt most or all retirement income: Illinois and Mississippi exempt qualified retirement income broadly, Pennsylvania exempts pension and retirement account distributions, and Iowa exempts retirement income for residents aged 55 and over. This list shifts as legislatures act — Michigan and West Virginia both moved to more favorable treatment of retirement and Social Security income taking effect in 2026 — so anyone planning around retirement income should check the current rule for their state rather than relying on a general reputation.
Domicile rules and the risk of a “paper” move
Changing your state of residence for tax purposes isn’t as simple as buying a mailbox and updating a driver’s license. States generally tax based on domicile — your true, permanent home — and high-tax states with the most to lose, including California, New York and New Jersey, run active residency audit programs aimed at people who claim to have left while keeping meaningful ties behind. The burden of proof sits with the taxpayer, and auditors look at concrete evidence: where you actually spend your days (many states apply a version of the 183-day rule), where your property and driver’s license are, and even documentary trails like credit card charges and travel records. A move made only on paper, with the old ties still substantially in place, is exactly the pattern these audits are built to catch.
The caveat that matters most
Every figure above reflects data published in the first half of 2026 (WalletHub, 31 March 2026; Tax Foundation, reflecting tax systems as of 1 July 2025). State legislatures change rates and brackets most years, and rankings move with them — check current figures before making any decision based on them, especially a move.
This is general information, not tax advice — for a decision that hinges on your actual numbers, talk to a CPA or tax attorney licensed in the states involved.
Frequently Asked Questions
If a state has no income tax, does that mean it has a low overall tax burden?
Not necessarily. Texas has no income tax but ranks around the middle of the pack on combined tax burden because of one of the country's higher property tax burdens, and Washington's total burden sits above the middle of the range once its heavy reliance on sales and excise tax is counted. A handful of no-income-tax states, such as Alaska and Wyoming, do land among the very lowest overall — but the label alone doesn't guarantee it.
Which states don't tax retirement income?
The nine states with no income tax at all (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) don't tax retirement income by definition. Several states with a general income tax carve out an exemption anyway — Illinois, Mississippi and Pennsylvania exempt most or all retirement income, and Iowa exempts it for residents 55 and older. Rules and thresholds change most years, so confirm the current treatment for your state before assuming an exemption applies.
Will moving to a lower-tax state actually save me meaningful money?
It depends on your income level, how you earn it, and what you spend it on — a renter in a no-sales-tax state saves differently than a homeowner in a no-income-tax one, and the value of any income tax saved scales with your marginal rate, not the average. Run your own numbers against your actual income mix and spending pattern rather than relying on a state's overall ranking, and weigh the tax saving against cost of living, insurance costs and the practical cost of relocating.
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