9 States With No Income Tax: Best for Business Owners?

The Zero Income Tax States

Nine states have no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For business owners who pay personal income tax on pass-through income, this is a significant advantage.

But It Is Not That Simple

These states make up for lost income tax revenue in other ways. Texas and Washington have gross receipts taxes. Nevada has a commerce tax. New Hampshire taxes interest and dividend income. Alaska has no sales tax but high property taxes.

Total Tax Burden Matters

A state with no income tax but high sales tax, property tax, and franchise fees might cost you more than a state with moderate income tax but lower other taxes. Use our comprehensive calculator to see your total estimated tax burden by state.