Overview of State Taxes in a Chart

The chart below shows which states currently collect state individual income taxes, state sales taxes, state estate taxes, state inheritance taxes, and/or state gift taxes. Note that local governments at the county or city level may collect taxes even if the state does not.

State Income Taxes

The following seven states exempt residents from all income tax liability: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Although New Hampshire and Tennessee don’t tax a resident’s wages and salary, these states do tax interest and dividends. (New Hampshire’s interest & dividends tax will be gradually phased out between 2023 and 2026.) If you are relocating to another state, be sure to check out the filing dates for completing state tax returns and paying taxes. Also, some states may offer tax amnesty programs that will waive any late filing fees. 

State Sales Taxes

The following five states do not collect a state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, you may still end up paying sales tax or something like it in some of these states. For example, many localities in Alaska collect local sales taxes, ranging from 1% to 7%. Delaware collects a gross receipts tax from businesses that sell goods, which range from 0.0945% to 0.7468%, depending on the type of business activity. And finally, New Hampshire collects a tax on patrons of restaurants, hotels, bars, and on car rentals.

State Estate Taxes

Estate taxes, which are paid by the estate and based on the overall value of an estate, are currently collected in 12 states: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. The District of Columbia also imposes estate taxes.

State Inheritance Taxes

Inheritance taxes, which are calculated based on who inherits the estate as opposed to the overall value of the estate, are currently collected in six states: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Notice that Maryland collects state estate taxes and inheritance taxes. Iowa is in the process of phasing out its inheritance tax, and will end it in 2025.

State Gift Taxes

Connecticut is the only state that collects gift taxes at the state level.