US State Income Tax Comparison 2026: Highest vs Lowest States
From California's 13.3% top rate to nine no-income-tax states. Full 2026 comparison of state income tax burdens, plus the offsetting property and sales tax reality.
State income tax is the second-largest tax most US workers pay after federal income tax — and it varies more dramatically across state lines than any other tax category. A worker earning $100,000 takes home roughly $7,000 more in Texas than in California, before considering cost of living. But the headline rates only tell half the story: states without income tax usually compensate with higher property tax, sales tax, or both. This guide ranks all 50 states by 2026 income tax burden and shows which combinations actually save you money on a household budget.
Key Takeaways
- 9 states levy no state income tax on wages: Alaska, Florida, Nevada, New Hampshire (only on dividends/interest, phasing out by 2027), South Dakota, Tennessee, Texas, Washington, Wyoming
- California has the highest top marginal rate at 13.3% (above $1M income); New York City residents pay the highest combined rate at ~14.78% (state + local)
- 14 states use a flat tax; the rest use progressive brackets
- Property tax effective rates range from 0.27% (Hawaii) to 2.07% (Illinois) — a far bigger budget item than income tax for many homeowners
- “Tax-friendly” depends on your income level, whether you own property, and your spending pattern
The 9 states with no income tax (2026)
These states do not tax wage or salary income at the state level. Federal tax and FICA still apply.
| State | Source of state revenue | Notable trade-off |
|---|---|---|
| Alaska | Oil severance taxes, Permanent Fund | Highest cost of living; isolated supply chain |
| Florida | 6% state sales tax + tourism revenue | Property insurance crisis (avg $4,200/yr in 2024) |
| Nevada | Gaming taxes, sales tax | High sales tax (8.375% in Clark County) |
| New Hampshire | Property tax (highest effective rate in NE region) | Interest/dividend tax phasing out by 2027 |
| South Dakota | Sales tax, tourism, financial services | Tiny population spreads tax base thin |
| Tennessee | 7% sales tax (high) + some local options | Among highest combined sales tax in US |
| Texas | 6.25% sales tax + property tax (1.6% effective) | Property tax 5th-highest nationally |
| Washington | 6.5% sales tax + new 7% capital gains tax | Capital gains tax above $270k started 2022 |
| Wyoming | Mineral severance taxes | Lowest population density in lower 48 |
A worker in Texas earning $80,000 keeps about $3,800–$5,400 more than the same worker in California after federal and state taxes — but pays roughly $1,500–$2,500 more in property tax on a typical home. The income tax savings still net positive for most homeowners.
States with the highest top marginal rates
Top rates only kick in at high income levels. The actual marginal rate you pay depends on where your income falls in the brackets.
| State | Top rate | Income threshold (single) | Note |
|---|---|---|---|
| California | 13.3% | $1,000,000 | Plus 1% mental health tax above $1M = effective 13.3% |
| Hawaii | 11.0% | $200,000 | 12 brackets, second-most in US |
| New York | 10.9% | $25,000,000 | NYC adds 3.078–3.876% city tax |
| New Jersey | 10.75% | $1,000,000 | Property tax also among highest |
| Oregon | 9.9% | $125,000 | No sales tax — income-heavy state |
| Minnesota | 9.85% | $217,000 | 4 brackets |
| Massachusetts | 9.0% | $1,000,000 (4% surtax above) | “Millionaire’s tax” added 2023 |
| DC | 10.75% | $1,000,000 | District of Columbia is not a state but taxed similarly |
Source: Tax Foundation — State Individual Income Tax Rates 2026 and individual state revenue departments.
For middle earners ($50,000–$100,000), these states’ effective rates are closer to 4–7%, not the headline top rate. Use Paymappr’s state calculators to see your exact bracket-by-bracket calculation.
States with flat income tax
Flat-tax states charge every dollar of taxable income at the same rate (above the standard deduction). They simplify the math and tend to be middle-of-the-pack on burden.
| State | Flat rate | 2026 status |
|---|---|---|
| North Carolina | 4.25% | Phasing toward 3.99% by 2027 |
| Pennsylvania | 3.07% | Plus mandatory municipal Earned Income Tax (1–4%) |
| Indiana | 3.0% | Plus county taxes ranging 0.5–3.38% |
| Michigan | 4.25% | Plus Detroit and a few other cities (1.2–2.4%) |
| Illinois | 4.95% | One of the highest flat rates |
| Massachusetts | 5.0% | Below $1M; 9% above |
| Colorado | 4.25% | TABOR refunds can effectively reduce this |
| Utah | 4.55% | One of the lowest flat rates |
| Kentucky | 4.0% | Continuing to phase down |
| Idaho | 5.3% | Recently flattened from progressive system |
The flat-tax trend has accelerated: 9 states have moved from progressive to flat brackets since 2020. Proponents argue flat taxes promote economic growth; critics argue they shift burden onto lower earners.
What state income tax actually costs you
Headline rates are misleading because they apply to taxable income (after the state’s standard deduction and personal exemption), not gross wages. Here’s the effective state tax rate — the share of gross income paid in state income tax — for a single filer earning $80,000 in 2026:
| State | Effective rate at $80k | Annual state tax |
|---|---|---|
| Texas / Florida / Nevada | 0% | $0 |
| North Dakota | 1.5% | ~$1,200 |
| Pennsylvania | 3.07% | ~$2,460 |
| Michigan | 4.0% | ~$3,200 |
| New York | 4.5% | ~$3,600 |
| California | 4.6% | ~$3,680 |
| Massachusetts | 4.7% | ~$3,760 |
| Oregon | 7.5% | ~$6,000 |
| Hawaii | 6.4% | ~$5,120 |
These are calculator-derived approximations using 2026 brackets and state-specific standard deductions. Run your exact figure through Paymappr’s calculator — pick your state from the dropdown for an accurate per-paycheck estimate.
The hidden taxes: property and sales
Income tax is not the only — or even the largest — state-level tax for many households. The Tax Foundation’s 2024 State and Local Tax Burden Rankings put combined state and local tax burden as a share of income at:
| Rank | State | Total state+local burden | Notable component |
|---|---|---|---|
| Lowest | Alaska | 4.6% | No income or sales tax |
| Lowest | Wyoming | 7.5% | Severance taxes carry the load |
| Lowest | Tennessee | 7.6% | High sales tax, no income |
| Lowest | South Dakota | 8.4% | Sales-heavy |
| Highest | New York | 15.9% | High income + city tax |
| Highest | Connecticut | 15.4% | High income + property |
| Highest | Hawaii | 14.1% | High GET (4.7%) + income |
| Highest | Vermont | 13.6% | High property + income |
| Highest | California | 13.5% | Income-heavy structure |
Property tax effective rates (US average ~1.1%):
- Lowest: Hawaii (0.27%), Alabama (0.40%), Louisiana (0.55%)
- Highest: Illinois (2.07%), New Jersey (2.21%), New Hampshire (1.96%)
Sales tax (combined state + average local):
- Highest: Tennessee (9.55%), Louisiana (9.55%), Arkansas (9.41%)
- Lowest: Alaska (1.76%), Hawaii (4.50%), Wyoming (5.36%)
This is why a Texas software engineer might pay nearly the same total tax as a California one despite Texas having no income tax — the Texan pays $9,000+ in property tax on a $500k home, while the Californian pays $5,500.
How to actually compare states for relocation
A naive comparison (“Texas saves me $5k vs California in income tax”) usually undershoots the real picture. A reasonable apples-to-apples model includes:
- Federal tax — same nationwide, anchor your model here
- State income tax — use the Paymappr state calculators for an accurate bracket-by-bracket figure
- Property tax — multiply local effective rate × home value
- Sales tax — multiply combined rate × annual taxable spending (rough US average: $35–40k/year for a household earning $80–120k)
- Cost of living adjustment — housing dominates; use BLS Regional Price Parities
Five-state quick comparison for a $100,000 single filer who owns a $400,000 home and spends $35,000/year on taxable goods:
| State | Income tax | Property tax | Sales tax | Annual total |
|---|---|---|---|---|
| Texas | $0 | $7,200 (1.8%) | $2,800 (8.0%) | $10,000 |
| Florida | $0 | $3,400 (0.86%) | $2,450 (7.0%) | $5,850 |
| California | $5,800 | $2,800 (0.71%) | $3,150 (9.0%) | $11,750 |
| New York | $5,400 | $5,800 (1.45%) | $2,975 (8.5%) | $14,175 |
| Tennessee | $0 | $2,800 (0.71%) | $3,343 (9.55%) | $6,143 |
Florida and Tennessee come out lowest in this scenario; California and New York highest. Texas is mid-pack despite the no-income-tax headline because of property tax.
FAQ
Which state is genuinely best for high earners? Pure tax math favors Florida for high-income retirees (no state income tax, low property tax, no estate tax) and Wyoming or Nevada for high-W-2 earners who can absorb the lifestyle/location trade-offs. Tennessee has emerged as a fast-growth alternative with no income tax and a lower cost of living.
What about remote workers — which state do I pay tax to? You pay state income tax to your state of residence, not your employer’s state, in most cases. Some states (New York’s “convenience of the employer” rule is notable) try to tax remote workers based on the employer’s location. Consult a CPA for multi-state setups.
Are the no-income-tax states actually cheaper to live in? Depends on your situation. Florida and Tennessee usually yes; Washington (especially Seattle) and Texas (in major metros) often no, because housing has caught up.
Do bonuses get taxed differently by state? Some states use flat supplemental withholding rates for bonuses (e.g. California 10.23%, New York 11.7%). The math at filing time is identical — bonuses are ordinary income — but in-year withholding can be higher.
Bottom line
State income tax matters but it’s only one of three or four state-level taxes that determine your total burden. The 9 no-income-tax states usually offset with higher sales or property tax. Before relocating for tax savings, model your specific income, home value, and spending patterns — the headline rate is rarely the punchline.
Use Paymappr’s state-by-state calculators to see your exact paycheck in any state, and pair it with property and sales tax rates from the Tax Foundation for a complete picture.