What states have income tax?
Most states collect an income tax, on both residents and non-residents who have received income from an in-state person or entity, in a manner similar to the federal income tax scheme. However, New Hampshire and Tennessee only have a minimal income tax, taxing only income that comes from interest and dividends (as opposed to income from salary, wages, tips, etc.). Seven other states do not currently have any income tax at all - Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. These states collect taxes for state funding through other tax programs, such as business taxes, sales tax, etc.