States with no capital gains tax
8 jurisdictions charge no state tax on capital gains: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Wyoming. Seven have no individual income tax at all; New Hampshire finished phasing out its interest-and-dividends tax in 2025. You still owe federal capital gains tax (0/15/20% long-term, up to 23.8% with the NIIT). Note Washington is different - it has no income tax but does tax large long-term gains at 7%. General information, not tax advice.
Source: Tax Foundation, 2026 state income tax rates. Data as of June 2026.
All 8 no-capital-gains-tax jurisdictions
| State | Region | Why there is no state tax on gains |
|---|---|---|
| Alaska | West | No state individual income tax, so capital gains are not taxed at the state level. |
| Florida | South | No state individual income tax, so capital gains are not taxed at the state level. |
| Nevada | West | No state individual income tax, so capital gains are not taxed at the state level. |
| New Hampshire | Northeast | No tax on wages or capital gains. The former tax on interest and dividends was fully phased out at the start of 2025, so investment income is now untaxed. |
| South Dakota | Midwest | No state individual income tax, so capital gains are not taxed at the state level. |
| Tennessee | South | No state income tax (the former Hall tax on interest and dividends was fully repealed in 2021), so capital gains are not taxed at the state level. |
| Texas | South | No state individual income tax, so capital gains are not taxed at the state level. |
| Wyoming | West | No state individual income tax, so capital gains are not taxed at the state level. |
Source: Tax Foundation, 2026 state income tax rates. Data as of June 2026.
The catch
Living in a no-tax state shelters you from state capital gains tax, but the federal bill is unchanged - and federal tax is the bigger number for most investors. These states also fund themselves through higher sales, property or other taxes. For where the combined federal-plus-state burden is actually highest and lowest, see the highest and lowest rankings.
Frequently asked questions
Which states have no capital gains tax?
8 jurisdictions levy no state tax on capital gains: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Wyoming. Seven (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Wyoming) have no individual income tax at all, and New Hampshire finished phasing out its tax on interest and dividends in 2025.
Does no state capital gains tax mean tax-free gains?
No. You still owe federal capital gains tax: 0%, 15% or 20% on long-term gains (up to 23.8% with the 3.8% NIIT), and ordinary rates up to 37% on short-term gains. These states simply add nothing on top.
What about Washington state?
Washington is a special case. It has no general income tax, but since 2022 it levies a 7% tax on long-term capital gains above an inflation-adjusted deduction (about $278,000 for 2025), with a 9.9% tier on gains over $1 million. Most filers with smaller gains, and all real-estate and retirement-account gains, are exempt. See the Washington state page.
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Last updated: 2026-06-21