All 9 states
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No Income Tax States
#1
$300 LLC
Texas
Best overall — large economy, no franchise tax under $2.47M.
#2
$125 LLC
Florida
Tourism economy, year-round demand, no corporate tax.
#3
$100 LLC
Wyoming
Cheapest LLC, strongest privacy, zero business taxes.
#4
$425 LLC
Nevada
Strong asset protection, no franchise tax.
#5
$300 LLC
Tennessee
Low cost of living, growing Nashville/Memphis markets.
#6
$200 LLC
Washington
Tech economy, high wages — but has B&O tax.
#7
$150 LLC
South Dakota
Strong trust laws, no corporate tax, low fees.
#8
$100 LLC
New Hampshire
Northeast access, educated workforce — but has BPT.
#9
$250 LLC
Alaska
Resident dividend, no sales tax — but remote, small market.
Potential Savings: A business owner earning $100,000 could save $5,000-$13,000 annually in a no-income-tax state compared to California or New York.
All 9 No Income Tax States
| State | LLC Fee | Sales Tax | Best For |
|---|---|---|---|
| Texas | $300 | 6.25% | Large metro markets |
| Florida | $125 | 6% | Tourism, services |
| Nevada | $75 | 6.85% | Privacy, entertainment |
| Washington | $200 | 6.5% | Tech, high earners |
| Wyoming | $100 | 4% | Asset protection |
| South Dakota | $150 | 4.5% | Trust formation |
| Alaska | $250 | 0% | No sales tax either |
| Tennessee | $300 | 7% | Nashville market |
| New Hampshire | $100 | 0% | Northeast location |
How Much You Actually Save
Savings depend on your income level. Here's what a business owner saves compared to high-tax states:
| Annual Income | vs California (13.3%) | vs New York (10.9%) | vs New Jersey (10.75%) |
|---|---|---|---|
| $50,000 | +$4,650 | +$3,950 | +$3,875 |
| $100,000 | +$9,300 | +$7,900 | +$7,750 |
| $200,000 | +$18,600 | +$15,800 | +$15,500 |
*Approximate savings using top marginal rates. Actual savings depend on deductions and filing status.
Best No-Tax State by Business Type
Service Businesses
Florida - Large population, tourism, low LLC fees ($125)
E-commerce / Online
Wyoming - Best privacy, low fees, no physical presence needed
Tech / High Revenue
Washington - Seattle tech scene, skilled workforce
Food Trucks / Restaurants
Texas - Large markets, food culture, growing cities
Northeast Clients
New Hampshire - No income OR sales tax, Boston proximity
Hidden Costs to Consider
No income tax doesn't mean no taxes. Consider these factors:
- Sales tax: Tennessee (7%) and Nevada (6.85%) have high sales taxes
- Property tax: Texas and New Hampshire have higher property taxes
- Franchise tax: Texas has a gross receipts tax for larger businesses
- B&O tax: Washington has Business & Occupation tax (0.47-1.5%)
Explore Business Guides by State
Common questions
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Frequently Asked Questions
Q.01 Which states have no income tax?
Nine states have no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire only taxes interest and dividends.
Q.02 Do no-income-tax states charge other business taxes?
Yes. Texas has a franchise tax, Washington has a B&O tax, and Nevada has a commerce tax for large businesses. No income tax does not mean no business taxes.
Q.03 How much can I save by moving to a no-income-tax state?
Savings depend on your income. A business owner earning $150K saves $7,500-$15,000 per year compared to states with 5-10% income tax rates.
Q.04 Is Florida or Texas better for business owners?
Both have no income tax. Texas has lower property taxes in some areas and no franchise tax under $2.47M revenue. Florida has lower insurance costs and no franchise tax.
Q.05 Should I move my business to a no-income-tax state?
Only if you genuinely relocate operations. The IRS scrutinizes state tax avoidance. You must establish real economic presence, not just a mailing address.