Newsbreak: The Surprising Truth About Living in a State with No Income Tax – Pros, Cons, and What You Need to Know Before You Decide

Living in a state with no income tax may seem like a financial advantage, but there are pros and cons to consider. As of 2023, according to a report by CNBC on February 9, 2023, nine U.S. states do not impose any additional income tax, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

One of the advantages of living in a state with no income tax is that you will only have to pay federal income tax. However, states with no income tax typically get revenue from other sources, such as higher sales taxes, property taxes, and gasoline taxes. Homeowners in New Hampshire and Texas pay some of the highest property taxes in the country, while Washington charges the third-highest gasoline taxes.

Additionally, as reported by GOBankingRates on February 27, 2023, having no state income tax can result in lower revenue for states, which may lead to lower state spending on basic services like education and infrastructure. According to a 2021 analysis by the U.S. Census Bureau, South Dakota and Wyoming spent the least amount on education of all 50 states.

When deciding whether it’s better to live in a state with no income tax, personal factors like quality of life and lifestyle considerations are also important. Low-to-moderate wage earners typically face less onerous tax rates, even in high-tax states like California. Therefore, personal factors should be carefully weighed before making a decision about where to live.