The Other Tax Bill Nobody Talks About

When people say "tax bracket," they usually mean federal. But most Americans pay a second income tax — to their state. And the variation between states is huge.

• California top rate → 13.3%;
• New York City top rate (state + city) → over 14%;
• Florida, Texas, Washington, Nevada, Tennessee, South Dakota, Wyoming, Alaska, New Hampshire → 0% state income tax.

That's not a 1% difference. For a high earner, that's tens of thousands per year.

The Nine No-Income-Tax States

These states do not tax wages or salary at all:

• Alaska;
• Florida;
• Nevada;
• New Hampshire (taxes interest/dividends — phasing out);
• South Dakota;
• Tennessee;
• Texas;
• Washington (does tax some capital gains);
• Wyoming.

But "no income tax" doesn't mean "no taxes." These states usually make up for it through:

• Higher property taxes (Texas, New Hampshire);
• Higher sales taxes (Tennessee, Washington);
• Specific resource or business taxes (Alaska oil, Nevada gambling, Wyoming mineral).

Before you U-Haul to Austin, run the total number, not just the income tax line.

When Moving Actually Makes Sense

Moving to save on taxes can pay off — but only when the numbers genuinely back it up. Real cases:

• High earners working remote — saving $15k+/year for the same job;
• Pre-retirees — about to sell a business or large stock position;
• Crypto or stock-heavy investors — large unrealized gains they'll soon realize;
• Retirees on Social Security — most states don't tax it, but a few still do.

When Moving Is A Trap

• Cost of living is higher in the new state — common in Florida and Texas hot metros, where the property tax can eat the income tax savings;
• You can't actually establish residency — states like California are aggressive about claiming you as a resident even after you "move";
• You'd lose access to community, family, or career networks worth more than the tax savings.

Becoming A Real Resident — Not Just Pretending

States with high income taxes audit "movers" hard. To actually count as a resident of your new state, expect to:

• Spend over 183 days/year physically there;
• Update your driver's license, voter registration, and vehicle registration;
• Move banking, doctor, dentist, gym, mailing address;
• Sell or substantially reduce ties to the old state (especially your old home).

If you keep your Manhattan apartment "for visits," New York may still consider you a New York resident. They will check.