9 Cities Where Retirees Pay Zero State Income Tax

Nine states charge no individual income tax at all, which means Social Security benefits for seniors are not taxed at the state level. But a zero on the income tax line is not the whole financial picture for a retiree weighing a move. Property taxes, sales taxes, insurance premiums, and everyday cost of living vary widely from one no-tax state to the next, and they can make up the difference.

Editor's note: Median gross rents are City-Data's 2024 figures. Average home values come from Zillow's September 2026 data. Cost of living figures come from Sperling's BestPlaces.

Sioux Falls, South Dakota

Median rent: $1,105

Average home value: $330,625

The Big Sioux River tumbles over pink quartzite right in the middle of town, and an extensive paved greenway follows the water through parks and trails. A university and several other colleges add a youthful, campus-adjacent current to an otherwise classic mid-sized Midwestern city.

South Dakota is one of nine states with no state income tax, and it does not tax Social Security benefits. Multiple regional health systems operate hospitals and clinics in the area, giving residents broad access to primary and specialty care.

Amarillo, Texas

Median rent: $1,123

Average home value: $209,627

Amarillo spreads across the flat High Plains, with a creek running through the city and a dramatic canyon landmark in the surrounding area to the south. A two-year college in town and a university in the surrounding area keep campus energy in the mix, while an art museum and performing-arts venues give retirees cultural options beyond what a small plains city usually offers.

Texas has no state income tax, and Social Security benefits are not taxed. A regional hospital system serves residents and surrounding communities. Cost of living scores 73.6, about 26.4% below the national average.

Chattanooga, Tennessee

Median rent: $1,396

Average home value: $314,999

Parks and trails trace the Tennessee River, and the ridge of Lookout Mountain forms a backdrop nearby. Students from local campuses keep the streets busy, and the mix of water and hills means outdoor options rarely require leaving town.

Tennessee has no state income tax and does not tax Social Security benefits. A regional hospital system provides general medical care for the area. Cost of living comes in at 89.7, roughly 10.3% below the national average.

Spokane, Washington

Median rent: $1,341

Average home value: $392,803

The Spokane River runs straight through downtown, where a large urban park wraps around the Upper Spokane Falls, an urban waterfall visible from the city core. Several colleges keep a steady student presence, and lakes, ski resorts, mountains, and bike trails sit within easy reach for retirees who want real scenery close to home.

Washington has no state income tax, and Social Security is not taxed. A regional hospital system with multiple locations provides emergency, surgical, and specialty care. Cost of living runs slightly above the national average at 103.1, about 3.1% higher.

Ocala, Florida

Median rent: $1,628

Average home value: $263,895

Horse farms stretch across thousands of acres of pasture just outside town, and equestrian culture defines the surrounding countryside. A college in the city brings campus energy, natural springs and a well-known spring-fed river sit nearby, and a national forest is within easy driving distance for anyone who wants woods and water close at hand.

Florida has no state income tax and does not tax Social Security benefits. A regional hospital system serves residents, with specialty and equine medical care available nearby. Cost of living scores 87, about 13.0% below the national average and 15.6% below the Florida average.

Sparks, Nevada

Median rent: $1,781

Average home value: $534,404

Waterfront parks and paved trails follow the Truckee River through Sparks, with foothill and mountain views framing the valley. Walking, biking, and fishing access shape daily life, part of a broader outdoor-recreation culture tied to the nearby Sierra Nevada scenery.

Nevada has no state income tax, and Social Security benefits are not taxed. An acute-care hospital serves the city, with additional regional hospitals and health systems in the nearby Reno area. Cost of living is 118.6, about 18.6% above the national average.

Anchorage, Alaska

Median rent: $1,536

Average home value: $422,584

Waterfront parks and trails trace Cook Inlet, and the Chugach Mountains rise along the city's eastern edge. A local university lends campus energy to a setting that pairs everyday urban convenience with dramatic scenery in every direction.

Alaska has no state income tax and does not tax Social Security benefits. Regional hospitals and a health system serve the Anchorage area. Cost of living is 115.5, about 15.5% above the national average.

Laredo, Texas

Median rent: $1,062

Average home value: $216,721

Laredo sits on the north bank of the Rio Grande, directly across from Nuevo Laredo, Mexico, with a walkable, historic downtown just blocks from the water. A deep bicultural, binational heritage shapes daily life, and a local college and university presence adds campus energy.

Texas has no state income tax, and Social Security benefits are not taxed at the state level. A regional hospital system handles inpatient, emergency, and specialty care. Cost of living scores 82.2, about 17.8% below the national average and 12.7% below the Texas average.

Johnson City, Tennessee

Median rent: $1,107

Average home value: $282,215

Waterfront parks and trails line the Watauga River and Boone Lake, and the city sits in the Blue Ridge Mountains near the Cherokee National Forest, with hiking and outdoor recreation close at hand. A university campus keeps a steady student presence in town.

Tennessee has no state individual income tax and does not tax Social Security benefits. A regional medical center and health system support routine and specialty care. Cost of living scores 84.6, about 15.4% below the national average.

Bottom line

Skipping a state income tax bill can meaningfully stretch a retirement budget, but it is only one piece of the math. Property taxes, sales taxes, home insurance, and everyday living costs swing widely from one no-tax state to the next, and a higher cost of living can quietly offset some of what you save.

Before you move, compare your full tax burden and typical living expenses against what you pay now, not just the income tax line. This will help you avoid any surprising retirement mistakes. The right no-tax city depends as much on climate, scenery, and lifestyle fit as it does on the tax code.

This article is for informational purposes only and should not be considered investment advice.

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