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%)