Thinking of Moving to a No-Tax State? What You Need to Know First

The Full Financial Picture of Relocating for Tax Purposes

Moving to a no-income-tax state to save money sounds straightforward. It's more nuanced. Here's the honest analysis.

The Obvious Savings: State Income Tax

Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

For a $150,000 single earner moving from:

From → To

Estimated State Tax Savings

California → Texas	~$8,500–$10,000/yr
New York → Florida	~$8,000–$9,500/yr
Oregon → Washington	~$9,500–$11,000/yr
Minnesota → South Dakota	~$7,000–$9,000/yr

These are real, significant savings. But they're not the full picture.

The Hidden Costs

Property Taxes

Texas effective property tax rate: 1.6–2.0% California effective property tax rate: 0.6–0.8%

On a $600,000 home:

Texas: $9,600–$12,000/year
California: $3,600–$4,800/year
Difference: $5,000–$7,000/year more in Texas

At $150,000 income, this can consume nearly half your income tax savings.

Renters in Texas: Don't pay this directly, but it's embedded in rental prices.

Sales Tax

Texas: 6.25% state + up to 2% local = up to 8.25% California: 7.25% base + local = 8.5–10.75% in many areas

Both are high, roughly comparable.

Florida: 6% state + local = typically 7–8%. Lower than Texas.

Washington's Capital Gains Tax

Washington state has a 7% capital gains tax on gains over $262,000 (2026). This blindsides many remote workers in tech who move to Seattle expecting no state taxes.

Proving Domicile: The Most Important Step

Moving isn't enough. You must actually change your domicile or your old state may still tax you:

Update your driver's license within 30 days of arriving
Register to vote in the new state
Update your address on bank accounts, investment accounts, tax returns
Spend less than 183 days in your old state
Move your primary residence — don't keep a CA/NY apartment

California's Franchise Tax Board and New York's Department of Revenue are aggressive about auditing high-income departures. Keep records of your days in each state.

When the Move Clearly Makes Sense

You earn $200,000+ and rent (avoiding property tax offset)
You're fully remote with no ties to your home state
You're moving to Florida or Nevada (lower property taxes than Texas)
You can demonstrably cut ties with your old state

When to Think Carefully

You own expensive property (property tax offsets much of the savings)
You have kids who benefit from high-tax states' better-funded schools
You work in-state periodically (you may still owe taxes on those days)
Your income includes investment income taxed differently by state

Run the Real Numbers

Use our state comparison tool to see the exact income tax difference on your salary. Then factor in your housing situation to get the full picture.

Frequently Asked Questions

How much do I actually save moving from California to Texas?

On a $150,000 salary, you save approximately $8,000–$10,000/year in California state income taxes by moving to Texas. But Texas property taxes are significantly higher (~1.7% vs California's ~0.7%). If you own a $500,000 home, Texas property taxes run $5,000 more per year — offsetting about half the income tax savings.

Can California still tax me after I move?

California is aggressive about determining true residency. If you move but maintain significant ties (property, business, spouse remaining, etc.), California may still assert tax on your income. You need to sever California ties: update your driver's license, voter registration, and spend fewer than 183 days/year in CA.

Which no-tax state is best financially?

It depends on your financial profile. Nevada has low property taxes and no income tax. Texas saves the most for renters (avoiding high property taxes). Florida balances low property taxes with a large economy. New Hampshire has no income tax and no sales tax, but high property taxes.