Should You Move States for the Tax? Run the Housing Number Too
State income tax is the number people move for. It is visible, it has a percentage attached, and it feels controllable. Housing is two to five times larger, varies far more between states, and gets treated as a detail to sort out after the decision.
Put both on the same axis and the ranking changes completely.
Net pay after housing
At $40 an hour ($83,200 gross), here is annual take-home minus twelve months of median housing — what is actually left to live on:
| State | State tax | Net pay | Housing/yr | Left over |
|---|---|---|---|---|
| South Dakota | $0 | $67,361 | $11,400 | $55,961 |
| North Dakota | $363 | $66,998 | $12,000 | $54,998 |
| Wyoming | $0 | $67,361 | $12,600 | $54,761 |
| West Virginia | $3,172 | $64,189 | $9,600 | $54,589 |
| Mississippi | $2,836 | $64,525 | $10,200 | $54,325 |
| Arkansas | $3,061 | $64,300 | $10,200 | $54,100 |
| State | State tax | Net pay | Housing/yr | Left over |
|---|---|---|---|---|
| Hawaii | $4,880 | $62,481 | $28,800 | $33,681 |
| California | $3,646 | $63,716 | $26,400 | $37,316 |
| District of Columbia | $4,104 | $63,258 | $25,200 | $38,058 |
| Massachusetts | $4,160 | $63,201 | $22,200 | $41,001 |
| New York | $3,896 | $63,465 | $21,600 | $41,865 |
| Oregon | $6,706 | $60,655 | $18,000 | $42,655 |
The spread between the top and bottom of this list is $22,280 a year. The spread in state income tax alone across the same set is $6,706. Housing is doing most of the work.
The no-income-tax trap
Several states with no income tax do not appear near the top of that list, because their housing costs offset the saving. Ranked purely by state tax, the leaders are South Dakota, Wyoming, Tennessee, Alaska — all at zero. Ranked by money left after housing, the order is quite different.
This is the core error in “move somewhere with no income tax.” It is excellent advice for some pairs of states and poor advice for others, and which one it is depends almost entirely on what you will pay for somewhere to live.
What the table still does not capture
Property tax. States without income tax often lean heavily on it. If you will buy rather than rent, a large share of the income tax you avoided comes back as an annual property bill — Texas and New Hampshire are the standard examples.
Sales tax. Washington and Tennessee run among the highest combined rates in the country. It takes a bigger bite from smaller incomes.
City income tax. Nine states let municipalities levy their own. Moving to Ohio or Pennsylvania without checking the city rate can quietly undo a chunk of the state-level saving. The rates are here.
Within-state variation. These are state medians. Housing in Austin bears little resemblance to housing in rural Texas, and a state-level figure will not match any specific city.
Whether your salary moves with you. The biggest unknown. Many employers adjust pay to local market rates, which can erase the entire benefit. A fully remote role with a fixed salary is the case where relocation arbitrage genuinely works.
Residency is not where you say you live
States that lose high earners audit for this. Domicile is established by where you actually live, not by a mailing address — day counts, where your family is, where your car is registered, where you vote, where you see a doctor. Several states apply a 183-day rule and will pursue a claim aggressively.
Moving mid-year also usually means filing part-year returns in both states, which is worth planning around rather than discovering in April.
Run your own pair
Every salary page has a state-versus-state comparison that shows both take-home figures side by side at your wage. Combine that with the housing figure shown on each page, and you have the number that should drive the decision.
Start at $40/hr in South Dakota — the strongest state on this measure — or pick any state.