Which States Have No State Income Tax 2021?

Some states are more tax-friendly than others when it comes to taxes. State income tax is one of the most expensive expenses for both people and corporations. Fortunately, as of 2021, there will be nine states in the US without a state income tax. Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, Tennessee, and New Hampshire are among them.

Although there are certain exceptions, most goods and services in Vermont are subject to sales tax. For instance, items like food, prescription medications, and clothing are tax-free. In addition, purchases of electricity and natural gas for domestic usage are exempt by 10%.

Certain products are exempt from sales tax in some states. For instance, Florida does not impose a sales tax on purchases of food, medication, or medical supplies. There is no sales tax in New Hampshire for items like food, clothing, or prescription medications. It is necessary to understand each state’s regulations because the rates and exemptions for sales taxes vary between states.

When it comes to state income tax rates, California, Hawaii, Oregon, Minnesota, and New Jersey have the highest rates. The highest income tax rates in these states range from 9.3% to 10.75%. In these states, high earners may wind up paying a sizable portion of their income as state income tax.

In conclusion, moving to one of the nine states without a state income tax may be worthwhile if you’re trying to reduce your tax liability. Before making a choice, it’s crucial to learn about the additional taxes that each state levies, including the sales and property taxes. Additionally, learning about the exclusions and rates of each state’s sales tax might help you save money on regular purchases.