State Income Tax

About State Income Tax

State income taxes vary dramatically across the United States. Wisconsin was the first state to implement an income tax in 1911. As of 2024, 41 states have a state income tax. The states without an income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. California has the highest top marginal rate at 13.3 percent, followed by Hawaii at 11 percent. States without income taxes typically rely on sales taxes, property taxes, or resource extraction revenues. The competition between states for residents and businesses based on tax rates has intensified. During the pandemic, several high earners moved from high tax states like California and New York to low tax states like Florida and Texas.