What a state move is actually worth
Federal tax and FICA are identical wherever you live, so the entire difference between two states comes from state income tax. On a $120,000 salary the gap between a high-tax state and a no-tax state runs to several thousand dollars a year: real money, and the reason state comparisons drive so many relocation decisions.
The figure above is the honest income-tax difference. It is also, on its own, an incomplete basis for moving.
The three taxes that offset it
- Property tax. Texas and New Hampshire have no income tax and some of the highest effective property tax rates in the country. A household saving $6,000 in income tax can hand back more than that on an equivalent home.
- Sales tax. Tennessee and Nevada lean heavily on sales tax, and Tennessee applies it to groceries. Sales tax is regressive, so it claws back proportionally more from lower incomes.
- Local income tax. Eleven states let counties or cities levy their own income tax. In Maryland it averages around 2.4% of AGI and in New York City it is substantial, enough to change which state actually wins.
Residency is not where you say you live
States determine residency by domicile and by day-counting, and high-tax states audit departures aggressively. Keeping a home, a driver's license, voter registration or family ties in your former state can leave you liable there even after you move. Several states apply a 183-day rule; some look at where your "permanent place of abode" is regardless of days.
If you move mid-year you will generally file part-year returns in both states, splitting income by when it was earned rather than when it was paid.
Remote work adds a wrinkle
Working remotely from a no-tax state for an employer in a taxing state usually means no state income tax, but not always. A few states apply a "convenience of the employer" rule, taxing a remote worker's income as if it were earned at the employer's location unless the remote arrangement is for the employer's benefit rather than the employee's. New York is the most aggressive on this point, and it catches people who assume moving away ended their liability.
What this comparison does not include
Wage income only, using each state's standard deduction and personal exemptions. It excludes local income taxes, state credits, retirement-income exclusions, and any difference in cost of living, which frequently dwarfs the tax difference in either direction.