Everyone knows Texas has no state income tax. But what does that actually mean for your wallet?
The savings (compared to other states):
| Salary | TX Tax | CA Tax | NY Tax | Savings vs CA | Savings vs NY | |--------|--------|--------|--------|---------------|---------------| | $60K | $0 | $2,700 | $3,200 | $2,700 | $3,200 | | $100K | $0 | $6,100 | $5,800 | $6,100 | $5,800 | | $150K | $0 | $11,200 | $9,400 | $11,200 | $9,400 | | $200K | $0 | $17,400 | $13,200 | $17,400 | $13,200 |
Source: Tax Foundation state income tax calculators, 2026 rates.
What we pay INSTEAD:
- Property tax: DFW average 2.0-2.2% (national average ~1.1%). On a $400K home: $8,000-8,800/year.
- Sales tax: 8.25% in most DFW cities (6.25% state + 2% local). Source: Texas Comptroller.
- Vehicle registration: $50-75/year base + county fees.
- Toll roads: $150-250/month average for toll commuters.
The real comparison ($100K salary, $400K home):
| Category | Texas (DFW) | California | New York | |----------|------------|------------|----------| | State income tax | $0 | $6,100 | $5,800 | | Property tax | $8,400 | $4,800 | $8,000 | | Sales tax impact | $2,500 | $2,100 | $2,400 | | Total state/local tax | $10,900 | $13,000 | $16,200 |
Bottom line: Texas IS cheaper overall, especially at higher incomes. But it's not free. Property taxes and sales taxes close the gap more than most people realize.
Sources:
- Tax Foundation — state tax comparison tools
- Texas Comptroller — sales tax rates
- County appraisal districts — property tax data
Are you actually saving money by being in Texas?