Compare Your Total Tax Burden by State

Key definitions

Compare your true tax rate across states

Most people ask the wrong question when comparing taxes between states.

Does this state have an income tax?

The better question is:

What would my total tax burden look like in this state?

That difference matters.

A state with no income tax may still have higher sales taxes, property taxes, gas taxes, or vehicle fees. A state with high income taxes may be less expensive for someone who rents, spends less, drives less, or has a different income mix.

TrueTaxRate is designed to help answer the more useful question: how much of your gross income would likely go to taxes if you lived in one state versus another?

Why state income tax alone is misleading

State income tax gets most of the attention because it is easy to understand. Some states tax income heavily. Some states tax income lightly. Some states do not tax most personal income at all.

But income tax is only one layer.

As of 2026, nine states have no broad state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Washington is a partial exception because it taxes some long-term capital gains.

That does not automatically make those states lower-tax for everyone.

• A high-income renter may benefit significantly from moving to a no-income-tax state.
• A homeowner may lose some of that benefit through higher property taxes.
• A heavy spender may pay more through sales taxes.
• A frequent driver may pay more through fuel taxes and vehicle fees.
• A self-employed person may still owe federal self-employment tax regardless of state.

This is why state tax comparison needs to be personal.

Total tax burden vs. state income tax

A state income tax calculator can tell you one important piece of the story. A total tax burden calculator shows the broader picture.

The TrueTaxRate formula

TrueTaxRate uses a simple concept:

Example: $28,000 total estimated annual taxes / $100,000 gross income = 28% TrueTaxRate.

This is different from your income tax bracket. It is also different from your tax refund. The goal is not to estimate whether you will owe or receive money at tax time. The goal is to estimate how much of your income is ultimately paid in taxes across the year.

Example: why comparing only income tax can mislead

Assume a user earns $120,000 and is comparing two states.

If the user only compares income tax, State B looks better.

But if the user owns a home, spends heavily, and drives often, the lower income tax may be partly offset by other taxes.

This is the central problem TrueTaxRate solves: it turns a generic state-tax comparison into a personalized total-burden estimate.

Are no-income-tax states always lower-tax?

No. A no-income-tax state can be lower-tax for many people, especially high earners, but it is not automatically lower-tax for every household.

States without income tax still need revenue. They may rely more on:

• sales taxes
• property taxes
• excise taxes
• vehicle fees
• tourism taxes
• severance taxes
• local taxes
• other state and local revenue sources

For example, Tennessee has no broad income tax, but Tax Foundation's 2026 State Tax Competitiveness Index notes Tennessee among states with the highest combined state and average local sales tax rates.

The point is not that no-income-tax states are bad. The point is that income tax alone is not enough information.

Who benefits most from state tax comparison?

A personalized state tax comparison is especially useful for:

Remote workers

If you can live in multiple states, your tax burden may change significantly depending on where you establish residency.

W-2 workers

State income tax differences can become more meaningful as income rises, especially in high-tax states.

Homeowners

Property tax can materially change the result. A state with low income tax but high property tax may not be as attractive for homeowners.

Renters

Renters may care more about income tax, sales tax, and local taxes than property tax. TrueTaxRate does not include renters' embedded property tax by default because that estimate is too assumption-heavy.

Retirees

Retirees may have different income types, including Social Security, pensions, withdrawals, dividends, capital gains, and property income. State tax treatment can vary.

Self-employed workers

Freelancers, contractors, and small business owners may need to compare income tax, self-employment tax, business-related state rules, and local taxes.

Investors and founders

Capital gains treatment can matter a lot for users selling stock, crypto, real estate, or business equity.

What makes TrueTaxRate different from a cost-of-living calculator?

Cost-of-living calculators are useful, but they answer a different question.

A cost-of-living calculator typically compares housing, food, transportation, utilities, healthcare, and other expenses between locations.

TrueTaxRate focuses specifically on taxes.

The best relocation decision may require all of these. But if your specific question is "Would I pay less in taxes in another state?", you need a tax-burden comparison, not just a cost-of-living comparison.

What makes TrueTaxRate different from an effective tax rate calculator?

An effective tax rate calculator usually focuses on income tax liability.

TrueTaxRate includes income tax, but it also includes other major tax categories that affect your real annual burden.

How to use TrueTaxRate for state comparison

Step 1: Enter your current state

Start with where you live now, your state and zip code. TrueTaxRate does not ask for your address.

Step 2: Add income

Enter your gross annual income and income type. TrueTaxRate supports W-2 income, 1099/self-employment income, capital gains, dividends, and mixed income.

Step 3: Add spending

Enter estimated annual spending or upload a transaction CSV if available. Sales tax is estimated from taxable spending and local/state rates.

Step 4: Add property, vehicle, and gas tax details

If you own a home, enter annual property tax or home-related assumptions. Add vehicle registration costs and fuel usage if available.

Step 5: See results and compare another state

See your TrueTaxRate and select another state to see how it changes.

What taxes should you compare before moving states?

Before moving for tax reasons, compare:

1. State income tax
2. Local income tax
3. Sales tax
4. Property tax
5. Vehicle taxes and registration fees
6. Gas tax
7. Capital gains tax treatment
8. Self-employment tax implications
9. Tax treatment of retirement income
10. Total taxes as a percentage of gross income

Do not make a relocation decision based on state income tax alone.

Popular state comparisons

California vs. Texas taxes

California has high income taxes and a high statewide sales tax rate. Texas has no broad personal income tax, but property taxes can be a major part of the picture. A California-to-Texas comparison should include income, homeownership, spending, and vehicle costs - not just state income tax.

California vs. Florida taxes

Florida has no broad state income tax. California has high income tax rates and a high statewide sales tax rate. But the final answer still depends on your income, spending, housing, and property tax situation.

New York vs. Florida taxes

This comparison is especially relevant for high earners, retirees, and people leaving New York City. Users should compare state income tax, local income tax, sales tax, property tax, and investment income treatment.

Washington vs. Oregon taxes

Washington has no broad wage income tax but does have sales tax. Oregon has no general sales tax but does have income tax. This is a clean example of why total tax burden is more useful than one headline tax rate.

Why this matters for high-tax-state movers

People often consider moving from states like California, New York, New Jersey, Illinois, or Massachusetts to states like Texas, Florida, Nevada, Tennessee, or Arizona.

That may reduce taxes for some households. But the actual savings depend on:

• income level
• filing status
• home value
• property ownership
• consumption level
• capital gains
• local taxes
• vehicle costs
• driving habits
• whether income is W-2 or self-employed

TrueTaxRate helps model those differences instead of relying on broad averages.

Why this matters for no-income-tax states

No-income-tax states are attractive because the benefit is easy to understand.

But a serious comparison needs to ask:

• Will I pay more sales tax?
• Will property taxes be higher?
• Will vehicle fees change?
• Will gas taxes change?
• Will my capital gains be taxed differently?
• Will local taxes offset some of the benefit?
• Will my spending profile make sales tax more important?

A no-income-tax state may still be the better tax choice. But the answer should come from a full comparison.

Employer-side payroll tax toggle

Employer-side payroll tax is excluded from the default TrueTaxRate.

However, TrueTaxRate may show an optional expanded economic burden toggle. This lets users see how their estimate changes if employer-side payroll taxes are included.

Why optional?

Because employer-side payroll taxes are not directly deducted from the employee's paycheck, but economists often argue that some or all of the burden may be shifted to workers through lower wages over time.

The cleanest approach is to show it transparently, not hide it and not force it into the default number.

How accurate is a state tax burden comparison?

A state tax burden comparison can be directionally strong, especially when users enter actual values. But it should not be treated as exact tax advice.

Accuracy improves when users enter:

• actual federal tax paid
• actual state tax paid
• actual payroll tax withheld
• actual property tax paid
• actual vehicle registration taxes/fees
• realistic taxable spending
• actual fuel usage
• actual capital gains

TrueTaxRate labels each category by confidence level so users can see which parts are known and which parts are estimated.

Why averages are useful but not enough

Statewide averages can help people understand broad patterns. But averages can mislead individual households.

Averages do not know:

• your income
• your filing status
• whether you rent or own
• your home value
• your spending habits
• your car usage
• your investment income
• your local tax jurisdiction
• your actual tax documents

TrueTaxRate uses public data and user inputs to move from generic averages toward a personalized estimate.

What to know before using a state tax ranking

State tax rankings can be useful, but they do not necessarily tell you what you would pay.

A ranking may be based on:

• tax collections as a share of income
• average household assumptions
• statutory tax rates
• business tax competitiveness
• property tax rates
• sales tax rates
• combined tax burden models

Each methodology answers a different question.

For example, Tax Foundation's State Tax Competitiveness Index is designed to compare how well states structure their tax systems, not to calculate one household's personalized tax burden.

TrueTaxRate is different because it starts with your own income, spending, property, and location assumptions.

FAQ