15 States With the Highest and Lowest Tax Rates in 2026: Where Your Money Actually Goes the Furthest
High-tax states aren’t always the most expensive to live in, and low-tax states don’t always mean bigger savings. Here’s how tax burdens really compare across the U.S.
Now that Tax Day has passed and many people are taking a closer look at how much they owed the IRS or may have received as a refund, one question comes up again and again: Would I pay less tax somewhere else?
For most people, the answer isn’t straightforward.
That's partly because state taxes vary widely across the country, from places with no income tax at all to states with some of the highest top rates in the nation. But as with the overall cost of living, your true tax burden depends on more than just one number.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Property taxes, sales taxes, and the structure of your income can all significantly affect how much you actually pay.
So, if you're looking for a tax-friendly place to live, here’s a closer look at states with the highest and lowest tax rates in 2026 — and what those differences could mean for your wallet.
State Tax Rates 2026
Tax burden and comparative classifications (including high, moderate, and low relative descriptors) are generally based on the 2026 Tax Foundation state tax burden index.
Cost-of-living comparisons of no-income-tax states generally use the most recently available U.S. Bureau of Economic Analysis (BEA) regional price parity (RPP) data.
Property tax rates are approximate effective rates based on assessed home values and can vary depending on local assessment practices.
Remember: In any state, your actual costs will depend on your income, housing choices, spending habits, tax deductions, credits, and exemptions, as well as local prices.
States with the highest income tax in 2026
The following states have some of the highest top income tax rates and generally rank above average in overall tax burden and state income tax rates.
*States are listed alphabetically, not by rank, within each group.
California
income tax rate: 13.3%
Sales tax: About 8.5%–10.5% combined
Property taxes: Approx. 0.7%–0.9%
California has the highest top marginal income tax rate in the country. While property taxes are limited by state law, high sales taxes and elevated housing costs significantly increase overall expenses.
Why it matters: Even for middle-income households, high housing costs and sales taxes raise the baseline cost of living in the Golden State.
Connecticut
Top income tax rate: 6.99%
Sales tax: 6.35%
Property taxes: About 1.7%–2.1%
Connecticut combines moderate-to-high income, sales, and property taxes across the board.
Why it matters: Overall tax burden in the Constitution State is driven by a combination of income, sales, and property taxes, none of which are the highest nationally, but are elevated relative to many other states.
New Jersey
Top income tax rate: 10.75%
Sales tax: 6.6%
Property taxes: Approx. 2.1%–2.3% (highest in the U.S.)
New Jersey’s tax profile is dominated by exceptionally high property taxes, which affect homeowners across all income levels.
Why it matters: For some Garden State households, property taxes can function almost like a second housing payment layered on top of a mortgage.
New York
Top income tax rate: 10.9%
Sales tax: Approx. 8%–9% combined
Property taxes: About 1.4%–1.8%
New York combines high income taxes with above-average sales taxes and some of the highest property taxes in the country, particularly outside New York City.
Why it matters: Total tax burden can shift significantly depending on where you live within the Empire State, especially for homeowners.
Massachusetts
Income tax: 5% + 4% surtax over $1M
Sales tax: 6.25%
Property taxes: About 1.0%–1.3%
Massachusetts uses a flat income tax but applies an additional surtax on high earners.
Why it matters: A flat income tax structure can still produce a steep effective tax increase in the Old Bay State once income crosses key thresholds.
Do no-income-tax states really save you money?
Even among states with no income tax, i.e., Texas, Florida, Tennessee, Washington, Nevada, New Hampshire, South Dakota, Alaska, and Wyoming, total tax burdens vary widely.
That’s because these states still rely on:
- Sales taxes (often 5%–10% combined)
- Property taxes (Approx. 0.3%–2.3% depending on the state)
- Select local and specialized taxes
For example:
- Texas and New Hampshire rely heavily on property taxes, raising housing costs
- Tennessee and Nevada rely more on sales taxes, increasing everyday spending
- Alaska has no state income or sales tax, but higher overall living costs based on BEA data
- Washington now has capital gains taxes on high earners as well as a newly enacted surtax on income over 1 million.
Why it matters: Eliminating income tax shifts, rather than removes, the tax burden, often onto housing or consumption (via sales taxes).
That brings us to the states with the lowest income tax.
5 lowest income tax states in 2026
The following states rank among the lowest in overall tax burden based on sales tax, property taxes, and cost of living.
Florida
Income tax: None
Sales tax: Approx. 7%–7.5%
Property taxes: About 0.8%–1.1%
Florida remains tax-friendly, though rising housing and insurance costs are eroding affordability.
Why it matters: Housing and insurance costs in some areas of the Sunshine State can reduce the overall benefit of having no state income tax.
South Dakota
Income tax: None
Sales tax: Approx. 6%–6.5%
Property taxes: About 1.2%–1.4%
South Dakota maintains relatively balanced low-to-moderate taxes across categories.
Why it matters: The lack of a state income tax, combined with moderate sales and property taxes, helps keep the overall tax burden in the Mount Rushmore State relatively low.
Tennessee
Income tax: None
Sales tax: Approx. 9%–9.5% combined
Property taxes: About 0.5%–0.7%
Tennessee has no income tax and relies heavily on sales taxes, which are among the highest in the country.
Why it matters: Lower housing taxes help homeowners in the Volunteer State, but everyday purchases carry a higher tax burden.
Texas
Income tax: None
Sales tax: Approx. 8%–8.25% combined
Property taxes: About 1.6%–2.1%
Texas replaces income tax with some of the highest property taxes in the U.S.
Why it matters: Homeownership costs in the Lone Star State often determine total tax exposure more than income does.
Wyoming
Income tax: None
Sales tax: Approx. 5.5%–6%
Property taxes: About 0.6%–0.7%
Wyoming has one of the lowest overall tax profiles in the country.
Why it matters: Low taxes across income, sales, and property contribute to the Equality State having one of the lowest overall tax burdens in the country.
States that fall in the mid-range on taxes
The following states have moderate overall tax burdens, without the high rates of top-tax states or the clear tax advantages of no-income-tax states.
Alaska
Income tax: None
Sales tax: None statewide (local taxes vary)
Property taxes: Approx. 1.1%–1.3%
Alaska has no state income or sales tax, but overall living costs tend to be higher than the national average, according to BEA regional price data.
Why it matters: Despite having no state income or sales tax, overall living costs in the Last Frontier State are higher than the national average, according to BEA data.
Pennsylvania
Income tax: 3.07% flat
Sales tax: 6%
Property taxes: Approx. 1.3%–1.6%
Pennsylvania’s flat income tax is simple, but local and property taxes vary widely.
Why it matters: Local income taxes and property tax differences can significantly affect the Keystone State's total tax burden despite its flat income tax rate.
Nevada
Income tax: None
Sales tax: Approx. 8.1%–8.4%
Property taxes: About 0.6%–0.7%
Nevada remains tax-friendly, but rising housing costs in major metros are driving up overall expenses.
Why it matters: Tax structure advantages in the Silver State can be diluted by housing inflation.
New Hampshire
Income tax: None on wages
Sales tax: None
Property taxes: About1.8%–2.1%
New Hampshire has no income tax or sales tax, but among the highest property tax burdens in the country.
Why it matters: Housing costs are the primary tax pressure point in the Granite State.
Washington
Income tax: None on wages
Sales tax: Approx. 9.2%–10.4% combined
Property taxes: 0.8%–0.9%
Other taxes: 9.9% new tax on annual income over 1 million, capital gains tax on high-earner investment income
Washington doesn't have a broad-based personal income tax, but offsets it with high sales taxes and targeted taxes on high incomes, including a capital gains tax on high earnings and a newly enacted surtax on millionaires.
Why it matters: Tax advantages in the Evergreen State depend heavily on income level.
Bottom Line
How to compare state taxes before you move
State tax rates vary widely, but no single number tells the full story. If you’re comparing states or considering a move, it helps to evaluate:
- Income taxes avoided
- Property and sales tax burden
- Cost-of-living differences
In some cases, no-income-tax states offer meaningful savings. In others, those savings are offset by higher property taxes or higher everyday costs.
Maybe the better question when figuring out where to live this year isn’t which state has the lowest taxes — it might be where you’ll keep the most money after all taxes and expenses are combined.
More on State Tax
