Which States have No Income Tax?

1,330 Views Updated: 10 Aug 2017
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Which States have No Income Tax?

If you are a citizen of a country, it is important to pay taxes. The reason behind this is that taxes contribute to the overall development of the state and the amount collected is utilized in making public transport and providing other facilities to the citizen.

Though, many of you would be surprised to know that there are states that do not pay any taxes. There is, of course, a catch to this rule that prevents citizens from taking out money from their paycheck and paying it to the state.

The following states do not levy any taxes on their citizens as they believe that paying taxes could hamper the economy of the state. Also, it would discourage citizens from making investments.

#1. Alaska

The people of Alaska were once required to pay taxes, but that was revoked in 1980. Not just taxes but citizens are also exempted from paying any sales tax. On top of that, the citizens instead receive funds annually from the Alaska Permanent Fund Corporation. The government instead of taking personal taxes rather focus on other types of taxes such as estate, excise, gift and severance taxes. A lot of the revenue that gets generated comes from operations such as gas production and oil drilling. Though, the government is reconsidering its decision to levy personal taxes again due to declining oil prices.

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#2. Florida

The citizens of Florida were once required to pay personal income tax but not after 1855. Now, even though citizens are exempted from paying personal income tax, they are still needed to pay certain other taxes such as corporate income taxes and sales taxes. Also, the property taxes in Florida are way steeper than any other state, and the Government collects funds through them.

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#3. Nevada

Tourism is the single most reason why citizens of Nevada are not required to burn a hole in their pocket every month to pay to their government. Being one of the most popular destinations for tourists, the state collects billions from gambling taxes and fees. The high number of casinos and hotels has special taxes on them, and the state of Nevada also has other taxes such as high sales taxes, sin tax.

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#4. South Dakota

The income tax was stopped in South Dakota in 1943, and despite constant attempts, the government has failed to bring them back. Instead the government levies taxes on the purchases of cigarettes and alcoholic beverages. The Mount Rushmore State is a haven for retirees as it is a tax-friendly state. It has one of the lowest sales tax rates in the entire nation.

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#5. Texas

Another state that gets to reap the benefit of not having to pay any personal tax is Texas. The Texas Constitution completely prohibits personal income taxes and instead focuses on high sales and use taxes. The Property Tax Rate in Texas is also quite high.

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#6. Washington

Washington has one of the highest sales tax and has never had any personal income tax. In 2010 the citizens had voted against a proposed income tax that would have added to the taxes of the wealthy folks of the state.

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#7. Wyoming

The Cowboy State is the perfect place for anyone trying to get away from the burden of paying taxes. The state charges no personal or corporate state income taxes and has low sales and property tax.

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Also, the state of New Hampshire and Tennessee that do not levy personal taxes but do tax some dividends and interest.

Do you think taxes are unnecessary? Share your feedback using the comment box below.

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