Taxes

State Tax Overview: Income, Sales, and Property Taxes

Reviewed by Unpack Money Research Desk · Updated October 28, 2026 · Our review process

Quick answer

Federal tax is the same everywhere in the US. State tax is not. Most states levy some combination of income tax, sales tax, and property tax — and the mix matters more than any single rate. A state with no income tax often leans harder on property or sales tax, so “no income tax” does not automatically mean “low total tax.”

The three main state taxes

Educational information only. This page explains state tax systems in general terms. State rules change often and vary by locality — always confirm current rules with the relevant state revenue department, and consult a qualified tax professional for advice about your situation. Nothing here is a recommendation to move.

1. State income tax

Most states tax wages and other income, usually starting from federal AGI with state adjustments, then applying state rates and deductions. Some states have a flat rate; others have graduated brackets like the federal system. A few cities levy their own income tax on top of the state's.

2. Sales tax

Charged on purchases of goods (and some services). The state rate is only part of the story — counties and cities often add local sales tax, so the combined rate where you actually shop can be much higher than the state headline.

3. Property tax

Levied by local governments on real estate, based on assessed value. Property tax is the largest tax bill many homeowners face, and it varies enormously by county — even within one state.

States with no broad individual income tax

Nine states levy no broad tax on wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming (corroborated by NerdWallet, updated Jan 30, 2026, and multiple secondary summaries; not verified against IRS primary sources, which do not publish this list — check each state against its revenue department).

Footnotes that matter

New Hampshire formerly taxed interest and dividends; that tax was repealed effective January 1, 2025 (confirm against NH Department of Revenue Administration). Washington levies no tax on wages but does tax certain long-term capital gains above a threshold (confirm current threshold and rate against WA Department of Revenue). Texas — Unpack Money's home state — has no state income tax but relies heavily on property and sales tax, which is why a Texas homeowner's total tax picture can still be substantial.

How state and federal taxes interact

State income tax paid can be deductible on your federal return if you itemize, subject to the federal SALT cap. No cap figure is stated here; check current IRS Schedule A instructions for the current figure. Most states tax bank interest as ordinary income, following the federal treatment — see Is Savings Account Interest Taxable? and Is CD Interest Taxable?. Treasury interest is generally exempt from state tax, a notable exception. Moving mid-year can mean filing part-year returns in two states, with residency and domicile rules deciding which income each state taxes. Domicile is about intent and ties, not just a mailing address.

Filing: state returns are separate

A state return is a separate filing with its own forms, deadlines, and payment systems — usually through the state revenue department's own portal. Federal e-filing software often includes state filing, but state fees and inclusion vary (see Best Tax Software; prices are not stated here).

At a glance

What to actually compare before a move (more than the headline rate)

What this means for you

Do not move for a headline rate. Compare total burden where you would actually live — income, sales, and property together, plus housing costs — and check the state revenue department, not a random calculator. Unpack Money currently earns $0 affiliate revenue and has no approved affiliate programs, and this page contains no affiliate links.

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