States With No Capital Gains Tax: The Complete 2026 List

States With No Capital Gains Tax: The Quick Answer

Nine states levy no broad income tax, which means zero state-level capital gains tax for most residents. Alaska, Florida, Nevada, South Dakota, Wyoming, New Hampshire, Tennessee, Texas, and Washington make up the list. Washington is the one big exception to memorize.

Washington instead takes its own 7 percent cut of sizable long-term gains. The federal government taxes your gains everywhere, so moving only removes the state layer.

This guide lists the zero-tax states, explains the Washington carve-out, and covers the residency rules.

Those rules decide whether a move actually saves you money.

The Nine States With No Income Tax in 2026

State income tax is what turns a profitable sale into a double-taxed event. Remove that layer and your only bill is the federal capital gains rate from our capital gains rates breakdown.

The table below shows each state and the fine print that matters before you plan a move.

Count Washington as a partial entry and you still get eight clean slate states. Our full state capital gains rates table shows how steep the taxed states can be by comparison. California reaches 13.3 percent on top gains, and New York City residents can layer local tax above that.

Washington's 7% Excise Tax Exception

Washington taxes wages at zero but treats big investment gains differently. Starting in 2022, the state has charged long-term gains an excise rate of 7 percent. It kicks in above a standard deduction that adjusts each year.

The deduction sat at $278,000 for 2025 sales, and the state indexes it annually for inflation. A 2025 law added a second tier. The rate climbs to 9.9 percent on gains above $1 million in a single year.

The tax only touches long-term gains from stocks, bonds, business interests, and similar assets.

Real estate, retirement account distributions, and most livestock sales stay outside the tax.

The official Washington Department of Revenue capital gains page publishes the current-year deduction and the exclusion list. Seattle investors with seven-figure portfolios should model this tax before assuming Washington behaves like Texas.

New Hampshire and Tennessee Finished the Job

Both states once taxed investment income while leaving wages alone. Tennessee's Hall income tax taxed dividends and interest at 6 percent before a long phase-out ended it in 2021. New Hampshire kept a 4 percent interest and dividends tax through 2023, then cut it to 3 percent for 2024.

The tax was repealed entirely on January 1, 2025, per the New Hampshire Department of Revenue Administration. Both states now leave every category of capital gains untouched at the state level.

The Federal Tax Follows You Everywhere

Moving states changes one layer of the bill, never the federal one. Federal tax rates on long-held gains still run 0, 15, or 20 percent. The 3.8 percent NIIT can also apply above $200,000 or $250,000 of income.

A Florida resident with a $300,000 gain and high income pays the same federal bill as a California neighbor.

The state layer is worth real money, but the federal calculation comes first for every taxpayer.

What a Move Actually Saves: California to Nevada

Worked numbers beat slogans, so here is a realistic one. Take a single investor paid $150,000 in wages who then sells stock with a $400,000 long-term gain. California taxes the gain at its top ordinary rates.

Once the gain stacks above high wages, the effective rate lands near 12.3 percent. Nevada charges nothing at the state level. The table shows the five-year reality, not just year one.

Every situation differs, and property, sales, and local taxes fill some of the gap. The direction of the math stays consistent for investors with large appreciated portfolios. Before any moving truck gets rented, price the whole deal with our capital gains calculator guide.

Residency Rules Decide Whether the Move Counts

States do not let you claim zero tax by renting an apartment across the border. Domicile requires genuine relocation, and the old state will check.

Tax authorities weigh where you sleep, work, vote, and keep your closest family ties. A residency audit typically examines five or more years of records when a wealthy taxpayer leaves.

Follow a consistent checklist before and after any move. Change your driver license, voter registration, and insurance addresses on arrival. In the move year, file that previous state's part-year or nonresident return properly.

Keep day counts that prove you spent fewer than 183 days in the high-tax state afterward. New York and California audit aggressively, so documentation beats arguments every time.

Timing the Sale Against the Move Date

In most cases, your home state at the closing date gets to tax the gain. Selling stock after you establish Nevada domicile keeps California from taxing the gain.

Selling the same stock the week before you move leaves it fully taxable by the old state. Intangibles generally follow domicile, which makes marketable securities the cleanest asset class to time.

Business sales and real estate follow different rules. A house or plot of land is taxed by the state where that property physically sits.

A business with operations in the old state may trigger source income rules on part of the price. Deferral options that pair well with a move get covered in our legal avoidance strategies guide.

Why Retirees Push These Moves Harder

Retirees control the timing of income in ways workers cannot. Selling appreciated assets during a low-income year inside a zero-tax state stacks two benefits at once. For 2026, that federal 0 percent bracket shelters $98,900 of joint taxable income before the 15 percent rate starts.

Our seniors capital gains guide expands on stacking state savings with the federal 0 percent rate. Florida alone keeps drawing thousands of retirees each year for exactly this arithmetic.

The Bottom Line on Zero-Tax States

Eight states genuinely charge nothing on capital gains, and Washington charges 7 percent only above roughly $278,000 of gains. Federal rates apply no matter where you live, so a move trims the bill rather than erasing it. Only clean residency paperwork keeps those savings safe when the auditor arrives.

Close the sale once your domicile change is real, and hold onto tidy documentation. Done right, the state layer of capital gains tax disappears for good.

Common Misconceptions About No-Tax States

The first misconception is that moving wipes out the whole bill. Federal tax applies everywhere, and it is usually the larger half of the total. The second misconception involves vacation homes.

Owning a condo in Miami does not make you a Florida resident, because domicile requires your true permanent home. The third misconception concerns one-time sales. Some states can still tax gains you realized while living there, so the calendar matters as much as the address.

People also assume zero-tax states cost nothing to live in. Sales tax, property tax, and fees fill most of the budget hole left by missing income taxes. Texas property taxes run far above the national average, which the Texas Comptroller documents each year.

Tennessee charges high sales tax rates instead. The savings for a portfolio-heavy household remain real, but they shrink for families with modest investments. Compare the whole tax picture rather than the income tax line alone.

Other Taxes That Replace the Missing Income Tax

Zero-tax states still collect revenue, and investors should know where it comes from. The table below compares the main replacement taxes across the most popular destinations.

Nevada's listed rate excludes local add-ons that push combined rates near 8 or 9 percent in some counties. Washington layers its excise tax on top of among the highest sales tax rates in the country.

None of this reverses the savings on a large stock sale. It just shifts the breakeven point for middle-income households. Model several years of total taxes before committing to a specific state.

Equity Compensation and Business Sales in Zero-Tax States

Employees leaving California with unvested stock face a special rule worth planning around. Wages follow the work location, so unvested equity earned while working in California stays California-source income.

Vested shares gained after a genuine move belong to the new state in most cases. Companies can reprice or refresh grants after relocation, which shifts future gains to the zero-tax state.

Business owners face bigger stakes and bigger planning windows. California can tax gains from selling a business that operated there, even after the owner leaves. Structure the sale timing, the deal location, and the residency change carefully with a professional.

A founder who relocates to Texas two years before an exit can shift a nine-figure gain beyond California's reach. Rushing the move in the same year as the sale rarely works and invites an audit.

Part-Year Residents and the Move-Year Return

The move year usually requires two state returns. The former state receives a part-year resident return that reports income earned before you departed. The new state files a resident return covering everything after arrival.

Gains from selling intangible assets get allocated by residency on the sale date, so the calendar truly drives the outcome. Attach documentation for the domicile change, including the lease or home purchase and the day counts.

Watch for state-specific traps during this year. New York has a five-month presumption rule for people who leave but keep a home there. California taxes residents on worldwide income until the day they leave, then switches to source rules.

Virginia and a few others audit former residents for years after the move. Clean part-year filings cost little and prevent years of correspondence.