States With No Capital Gains Tax: The Full List

Nine states collect zero capital gains tax at the state level. If you sell a stock, a rental property, or a business in one of these states, your state government takes nothing from the gain.

That gap between nine states and the forty-one that do tax capital gains can mean tens of thousands of dollars on a single transaction.

The 9 States With No Capital Gains Tax in 2026

These states impose no tax on capital gains income because they either have no individual income tax at all, or they explicitly exempt capital gains from the income they tax:

• Alaska
• Florida
• Nevada
• New Hampshire (taxes only interest and dividend income; capital gains are exempt)
• South Dakota
• Tennessee (fully phased out its investment income tax as of 2022)
• Texas
• Washington (taxes capital gains at 7% above $262,000, but below that threshold the rate is zero)
• Wyoming

A note on Washington: the state passed and upheld a 7% excise tax on long-term capital gains above $262,000. Gains below that threshold are not taxed. For most stock and real estate transactions under that ceiling, Washington still functions as a no-capital-gains state. For large transactions, it does not.

For a deeper breakdown of rates across every state, see our Capital Gains Tax by State: A Full Breakdown.

Not All Nine States Are Equal: Cost of Living Matters

Zero capital gains tax is valuable only if the rest of the state's cost structure does not eat the savings somewhere else.

Texas has no state income tax and no capital gains tax, but property tax rates average around 1.6% to 1.8% of assessed value depending on the county, which is among the highest in the country. A $500,000 home in the Dallas suburbs can carry an $8,000 to $10,000 annual property tax bill.

Florida pairs zero capital gains tax with no state income tax and moderately lower property taxes than Texas, averaging around 0.83% statewide. Homestead exemptions bring that down further for primary residents. Median home prices in coastal markets have climbed sharply, but inland cities like Ocala and Lakeland remain well under $300,000.

South Dakota offers the full package: no income tax, no capital gains tax, and a median home price roughly around $310,000 as of late 2025. Property taxes run approximately 1.2% of assessed value. It is the lowest-friction option for investors who want to relocate and simplify.

Nevada has no income or capital gains tax, but sales tax rates are among the highest in the west, topping out at 8.375% in Clark County (Las Vegas). Cost of living is mid-range.

Wyoming and Alaska round out the best-value options. Wyoming has no income tax, no capital gains tax, and property taxes around 0.61%. Alaska adds a Permanent Fund Dividend, a direct annual payment to residents, on top of zero state income tax.

If you are approaching or in retirement, the capital gains picture connects directly to your broader tax plan. Our post on Best States for Retirees to Avoid Taxes breaks down how these states stack up on Social Security, pension income, and required minimum distributions.

What About Federal Capital Gains Tax?

Living in a no-capital-gains-tax state eliminates the state layer only. The federal government still taxes long-term capital gains at 0%, 15%, or 20% depending on your taxable income, plus the 3.8% Net Investment Income Tax for high earners.

For 2026, the 15% federal long-term rate applies to most middle and upper-middle income filers. The 20% rate kicks in at $583,750 for single filers and $1,167,500 for married filing jointly (these thresholds adjust annually for inflation).

State elimination matters most for large transactions: selling a business, liquidating a real estate portfolio, or exercising significant stock options. On a $1 million gain, California's 13.3% top rate would cost $133,000 in state tax alone. In Florida or Texas, that bill is zero.

See how the math works for your situation at our state tax calculator.

Will the Federal Exemption Change in 2026?

The question circulating widely is whether the federal government will eliminate capital gains tax entirely in 2026. As of publication, no federal legislation has passed to do this. The existing preferential rates for long-term gains remain in place. Some proposals have been discussed in Congress, but none are enacted law. Do not make relocation decisions based on proposed legislation.

Key Takeaways

• 9 states collect zero capital gains tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Wyoming, and Washington (below $262,000 in gains).
• On a $1 million gain, moving from California (13.3% top rate) to Florida saves $133,000 in state tax on that single transaction.
• Wyoming and South Dakota offer the strongest combination of zero capital gains tax, low property taxes, and below-average cost of living for investors who want maximum after-tax retention.

Compare these states side by side on taxes, cost of living, and more at LiveOrDieHere.com.