States With No Income Tax

Washington compensates for the missed income tax revenue with some of the highest sales and excise tax rates in the country. The state levies a 6.5% general sales tax, a higher rate than the vast majority of states. Additionally, the state has one of the highest excise taxes on gasoline and by far the highest excise tax on spirits of any state. Partially as a result, 46.4% of state revenue comes from sales taxes, one of the largest shares of any state.

Though Washington does not have a corporate income tax either, the state does levy a gross receipts tax on businesses, collecting 0.47% of annual gross income of businesses in the state.

Much like Alaska and Texas, part of the reason Wyoming can afford not to levy an income tax is because of the revenue it generates from its natural resources. The state government levied taxes on over $10 billion in oil, natural gas, coal, and other mineral extraction in 2017. Wyoming also has a relatively low sales tax rate, and partially as a result, property taxes account for 36.7% of state tax revenue, the largest share of any revenue source.