As of 2015, the states that do not have a personal income tax are Wyoming, Washington, South Dakota, Texas, Alaska, Florida and Nevada, according to USA Today. Tennessee and New Hampshire only tax interest and dividend income.
While these states don't impose an income tax, they make up for that revenue in other forms of taxation, USA Today explains. Alaska is one of the most tax-friendly states, as residents pay no sales tax and have low property taxes. This is due in part to the royalties earned on oil and gas production. Because of revenue from tourism and gambling, Nevada does not impose individual or corporate income taxes.