States With No Income Tax

Taxes, unpopular though they may be, fund government services Americans count on every day. Individual income taxes may be especially hated — but they are also important, accounting for 48% of federal tax revenue. For the vast majority of states, income taxes are also critical to governments’ balance sheets. The result? Most Americans pay income tax twice every year — once to federal government, and once to their state.

No two state tax codes are exactly alike, however, and there are a handful of states that manage to function without levying an individual income tax. To identify the states with no income tax, 24/7 Wall St. reviewed state level tax codes using tax data compiled by tax policy research organization Tax Foundation.

In the vast majority of states, individual income taxes represent over 15% of annual tax revenue. Because income tax is such an important and reliable revenue source, the states with no income tax make up for the lost potential revenue in other ways.