15 States That Tax Your Income the Least

You read that right -- a handful of states charge no income tax at all -- though their residents are still on the hook for federal income taxes, of course. Plenty of other states do levy an income tax, but not an onerous one. Here's a look at states that take little to none of your hard-earned income -- along with some other interesting facts about them.

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Alaska is one of seven states charging no state income tax. There are many other interesting things about the state, too, such as this: If Manhattan had the same population density as Alaska, there would be only 16 people living there. And in Barrow, Alaska, when the sun rises in May, it doesn't set for nearly three months.

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Florida is another no-state-income-tax state. It has more than a thousand miles of coastline and more than 800 miles of accessible beaches. In fact, at no point in Florida are you ever more than 60 miles from salt water.

Nevada is another of the seven states charging no state income tax. It has more mountain ranges than any other state -- more than 150, and its premier city, Las Vegas, sports more hotel rooms than any other city in the U.S.

South Dakota also doesn't levy a state income tax. It's known for Mount Rushmore, the Badlands National Park, and the Crazy Horse Memorial, which is being carved into a mountainside. It's also where many prehistoric fossils have been discovered, including those of wooly mammoths and tyrannosaurus rex.

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Texas can become taxes if you rearrange its letters, but it's still not going to tax your income on a state level. Other interesting things about Texas: Its highway between Austin and San Antonio has had an 85 mph speed limit, the highest in the U.S. You know that Texas is the second-largest state in America (after Alaska), but you may not realize that it's bigger than any European country as well.

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Washington is another state that doesn't tax income. It may be known for tech companies such as Microsoft and Amazon.com these days, but it used to be known more for Boeing. Indeed, its production plant in Everett, Washington, is known as the largest manufacturing building in the world, with some 4.3 million square feet, and is where gobs of 747, 767, 777, and 787 airplanes were built.

Wyoming is the last of the seven states charging no state income tax. It might not spring to mind as a progressive state, but long before the U.S. granted women the right to vote, in 1920, Wyoming had already done so -- in 1869. Wyoming also had the first female governor in the U.S., who served in the 1920s.

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Tennessee also doesn't charge its residents an income tax -- but until recently it did levy a small tax on interest and dividends. As of 2021, though, that has been repealed. Tennessee is home to Graceland, the former home of Elvis Presley. It's frequently the second-most visited private home in the U.S. -- after the White House. Tennessee is also home to the Grand Old Opry, which has been running its shows since 1925 -- almost 100 years!

New Hampshire doesn't charge a state income tax, but it does tax dividends and interest at 5%. That can be a big deal to you if you're an investor or retiree who collects a lot of such income. New Hampshire is also where the first potato was planted in America (in 1719) and the first public library was established (in 1833).

North Dakota's top individual income tax rate was recently 2.9%. That's a lot more than zero, but it's still low compared with many other states. That figure was recently 5.99% in Rhode Island, for example. In the U.S., North Dakota has been known for growing the most sunflowers, for producing the most honey, and for having the least amount of forest.

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Pennsylvania's top individual income tax rate was recently 3.07%. That's a fairly low rate compared with some others. In California, for example, the highest income tax rate was recently a whopping 13.3%. You may think of the Liberty Bell when you think of Pennyslvania's biggest city, Philadelphia, but you probably don't know that the name of the state is misspelled on it, as "Pensylvania" -- because there were several acceptable spellings of the state's name at the time.

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Indiana's top individual income tax rate was recently 3.23%. That's quite low compared with many other states. The corresponding figure in Hawaii, for example, was recently a hefty 11%. One of Indiana's top crops is vice presidents. There have been six vice presidents of America hailing from the state, starting with Schuyler Colfax in the 1860s and ending with Dan Quayle and Mike Pence.

Arizona's top individual income tax rate was recently 4.5% -- far less than that of other states, such as New Jersey, where the top rate was recently 10.75%. Interestingly, the state's population almost tripled between 1940 and 1960 -- thanks to the increased availability of air conditioning. With summer temperatures often between 90 and 120 degrees, it's understandable why many wouldn't move there without some relief.

New Mexico's top individual income tax rate was recently 4.9%. That's about half of the top rate in Oregon, which was recently 9.9%. While many assume the state's name takes after Mexico, it doesn't: The region was known as Nuevo Mexico as early as 1561, at a time when Mexico was known as New Spain. New Spain became United Mexican States in 1821 after gaining independence from Spain, and we now know it as simply Mexico.

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Kansas' top individual income tax rate was recently 5.7%. It's far from a low rate, but it's also far from some of the highest rates around. Minnesota, for example, recently sported a top individual income tax rate of 9.85%. Interestingly, while some have long declared Kansas "flatter than a pancake," a group of geographers actually did a topographic study of a pancake from IHOP, determining that it was actually less flat than Kansas.

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While it's great if you can live in a state where you pay little to no state income taxes, be sure to keep the big picture in mind. State governments still need revenue in order to keep the lights on and run the state, so if they're not collecting it via income tax, it may be coming from higher-than-average sales taxes or property taxes or other means. Always consider the overall tax burden, not just one part of the picture -- especially if you're looking to relocate in retirement, in order to lower your cost of living.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Selena Maranjian owns shares of Amazon, Boeing, and Microsoft. The Motley Fool owns shares of and recommends Amazon and Microsoft and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.