Five no-income-tax states. They're not interchangeable.
Florida is the famous one. South Dakota is the full-timer's choice. Texas, Nevada, and Wyoming each fit a different profile. Pick wrong and you'll be flying back for DMV visits or fighting a residency claim from your old state.
The right state depends on one question: are you keeping a US base, or going fully abroad?
Updated · Published
Educational content. Domicile rules are fact-specific and the "best" state depends on your assets, family ties, and how often you'll be in the US. If you have property, business interests, or significant brokerage gains in play, talk through the choice with an expat CPA before you commit.
The decision in one paragraph.
If you're keeping a US home or returning often: Florida usually wins. Filing the Declaration of Domicile is straightforward, healthcare is everywhere, and the snowbird pattern is common enough that nothing surprises you.
If you're going fully abroad and want minimum friction: South Dakota. The state set up its rules specifically for full-time travelers — one overnight stay with a receipt, plus a mail-forwarding service, is enough to establish residency. Driver's licenses can renew by mail for years at a time.
If you already have Texas ties or want a community: Texas, with Escapees RV Club in Livingston as your address. Bigger ecosystem than SD, more practical if you'll visit grandkids in the South.
Nevada and Wyoming work too — but unless you have an existing reason to pick them, the first three cover the use case better.
How the five states actually differ.
All five charge zero state income tax. The real differences are in residency thresholds, mail-forwarder ecosystems, and how much in-person presence each state expects.
| Criterion | South Dakota Top pick for full-timers | Florida | Texas | Nevada | Wyoming |
|---|---|---|---|---|---|
| State income tax | None | None | None | None | None |
| Estate / inheritance tax | None | None | None | None | None |
| Residency threshold | 1 overnight stay | Home or lease | Address + DL + voter reg | Stricter presence | Address + DL + voter reg |
| Driver's license | Initial visit, then mail | In-person | In-person | In-person | In-person |
| Vehicle inspection | None | None | Annual (if registered) | Emissions check* | None |
| Mail ecosystem | Purpose-built | Good | Purpose-built | Limited | Limited |
| Best for | Full-time abroad | US base / snowbirds | TX ties or bigger ecosystem | NV ties | WY ties |
*Nevada emissions check applies in certain counties only.
South Dakota
Easiest for full-time abroadThe state with the most permissive residency rules in the country — designed in part for full-time RVers, which is exactly the use case for retirees abroad. One overnight stay in a South Dakota hotel with a dated receipt, plus a mail-forwarding address, is sufficient to establish residency.
Best fit: Retirees going fully abroad with no plan to keep a US home. Less recognition with some banks; less healthcare infrastructure if you ever return for care.
Florida
Best if you're keeping a US baseThe default for retirees because Florida actually wants you. The state offers a recordable Declaration of Domicile — a notarized form filed with your county clerk that creates strong documentary evidence of residency. Combined with a homestead exemption, it's hard for another state to argue you didn't really move.
Best fit: Snowbird patterns, retirees keeping a Florida home, anyone who'll be back in the US for several months a year. Hurricane and homeowner-insurance costs have climbed sharply — price them in.
Texas
Best for existing Texas tiesBig enough that the infrastructure for full-time travelers and expats is well-developed. Escapees RV Club in Livingston is the longest-running address service in the country, and the state has a bigger pool of expat-friendly tax preparers and CPAs than SD or WY. The friction point is vehicle inspection — required annually if you keep a Texas-registered car.
Best fit: Existing Texas connections (family, prior residency), users of US Global Mail, anyone who values a larger expat-services ecosystem.
Nevada
Niche fitNo income tax and no inheritance tax, but Nevada expects more substantive physical presence than SD or TX. The mail-forwarder ecosystem aimed at full-time travelers is thinner. If you don't already have a Nevada connection, the other states usually fit the use case better.
Best fit: Existing Nevada residents or property owners. Otherwise, probably not your first choice.
Wyoming
Niche fitLowest overall tax footprint of the five — no income tax, no franchise tax, no inventory tax, modest fees. Strong asset-protection trust laws. The infrastructure for retiree-expat domicile is the smallest of the five, though, and winters are punishing if you ever visit.
Best fit: Existing Wyoming ties, asset-protection planning, or a preference for the lowest possible aggregate state-tax footprint.
Three retiree profiles.
The cleanest way to pick: figure out which of these you are.
"I'm going fully abroad."
No US home, no plan to spend more than a few weeks a year stateside. You want minimum friction with US bureaucracy and a state that treats you like a real resident on minimal evidence.
→ South Dakota
"I'm keeping a US base."
A condo, a beach house, summers stateside, grandkids you visit four months a year. You want a real address with a real homestead, easy healthcare access, and a pattern that the state and your bank are familiar with.
→ Florida
"I have ties already."
Family in Texas, an existing Nevada or Wyoming address, prior residency that makes one state the natural choice. Lean in. The "best on paper" state matters less than the one where you can document genuine connection.
→ Texas, NV, or WY
Tennessee, Alaska, New Hampshire, Washington.
Four more states charge no broad personal income tax — nine in total. They just don't usually fit the retiree-abroad use case. Here's the honest read on each.
Tennessee — genuinely no income tax
The Hall income tax on interest and dividends was fully repealed effective tax year 2021, so Tennessee is a true no-personal-income-tax state today. The reason it's not in the main five isn't tax — it's infrastructure. There's no purpose-built mail-forwarder/domicile community aimed at full-time travelers the way Escapees serves Texas or Dakota Post serves South Dakota. A real fit if you have an existing Tennessee connection (family, prior residency, a Nashville condo); otherwise, SD or FL gets you to the same tax outcome with a smoother path.
Alaska — no income tax, but impractical
No state income tax. The geography is the obstacle. Establishing domicile in Alaska without an Alaska connection is hard to document, and there's no purpose-built infrastructure for retirees who'll be abroad full-time.
New Hampshire — verify the year
No tax on wages or retirement income, but historically taxed interest and dividends. That tax has been on a phase-out schedule under recent legislation. Verify the current year's status with the NH Department of Revenue Administration before relying on it — if any phase-down rate is still in effect, your investment income is in scope.
Washington — the capital-gains catch
No income tax on wages or retirement income — but Washington imposes a 7% long-term capital gains tax on gains above an annually adjusted threshold (around $270,000 in recent years). For retirees with significant brokerage gains, this can quietly cost more than a low-rate state's income tax. Worth a careful look at projected gains before choosing Washington.
To be clear: nine US states have no broad personal income tax — FL, TX, SD, NV, WY, TN, AK, NH (with the I&D footnote), and WA (with the cap-gains footnote). Only the first five have developed the infrastructure that makes them a smooth fit for retirees moving abroad.
Four mistakes that cost you the audit.
- Treating a mail forwarder as the whole answer
A virtual mailbox is necessary, not sufficient. Pair it with a driver's license, voter registration, and a bank account in the same state. A mail-forwarder address with no other ties is the fastest way to lose a residency challenge.
- Keeping the old-state house "just in case"
Holding a primary residence in California, New York, or another sticky state while claiming Florida domicile is the single most common loss case. If you're keeping the property, rent it at arm's length through a property manager and never list it as your address.
- Picking a state that doesn't match your real pattern
South Dakota looks great on paper. If you'll actually spend four months a year at a Florida condo, Florida is the right answer — the state where you have the home is the one a residency challenge will land on.
- Skipping the part-year return for the year you leave
For the year you depart, file a part-year resident return in your old state showing the date your residency ended. This puts the state on notice and starts the statute-of-limitations clock. Skipping it leaves the question open indefinitely.
Picking a state is the easy part. Documenting it well is the rest.
An expat CPA can pressure-test your domicile plan against your old state's rules and handle the part-year return for the year you leave. TFX charges $160 for a part-year state return.
Frequently asked questions
Is South Dakota really legal as a domicile if I just stay one night?
Florida or South Dakota — which one will the IRS prefer?
Can I just register a vehicle in a no-tax state without actually moving there?
How long does it take to establish domicile before I leave?
What if my bank doesn't accept a mail-forwarder address?
Do I need a different state for state estate-tax planning than for income tax?
Three things to do, in this order.
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Pick a state by matching your actual pattern of life
Going fully abroad with no US home — South Dakota. Keeping a US base or returning often — Florida. Existing ties to TX, NV, or WY — use what you have.
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Sequence the move carefully
Establish domicile in the new state first — driver's license, voter registration, bank account, mail-forwarder address. Then depart internationally. Doing it in the wrong order weakens your residency case.
The full pre-move checklist → -
Get a virtual mailbox in the right state
Whichever state you pick, you'll need a US address that scans mail and forwards what matters. The two services worth using are US Global Mail (Texas) and Anytime Mailbox (any state).
Compare virtual mailbox services →
The new state is half the answer. Severing the old one is the other half.
If you're leaving California, New York, Virginia, New Mexico, or South Carolina, the receiving state matters less than the proof that you've actually left. Our state-residency guide walks through the full pre-move checklist and the part-year return.
Read the state-residency guidePrimary sources
- Florida Department of Revenue — no state income tax
- Florida HSMV — driver's license & residency
- Texas Comptroller — state taxes
- South Dakota DPS — driver licensing
- South Dakota Department of Revenue
- Nevada Department of Taxation
- Wyoming Department of Revenue
- Tennessee Department of Revenue — Hall tax repealed effective 2021
- New Hampshire Department of Revenue Administration — verify current interest & dividends tax status
- Washington DOR — long-term capital gains tax