When considering a move, taxes can make a surprising difference in your overall cost of living. While most states collect income tax, the rules vary widely — and understanding those differences can help you make an informed decision that aligns with your financial goals.
Below is a clear breakdown of how states handle income tax, sales tax, and even grocery tax, so you can compare your options with confidence.
States With No Income Tax on Wages (as of 2026) Nine states do not impose a state income tax:
• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Wyoming
• New Hampshire
• Washington (no tax on wages, but does levy tax on certain investment and capital gains income)
These states can offer significant tax savings depending on your income sources.
States With No Statewide Sales Tax
Five states do not impose a statewide sales tax:
• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon
However, note that local municipalities may still impose their own sales taxes in some states.
States With Neither Income Tax Nor Statewide Sales Tax
Only two states fall into this category:
• Alaska
• New Hampshire
These states rely heavily on alternative revenue sources, such as property taxes, which may affect other areas of cost of living.
States That Tax Groceries
While most states exempt unprepared grocery items from sales tax, a handful still impose tax on retail groceries:
• Alabama
• Hawaii
• Idaho
• Mississippi
• Oklahoma
• South Dakota
In many cases, groceries are taxed at a reduced rate compared to other goods and services, but it’s still an important factor when budgeting everyday living expenses.