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Nine states don’t tax wage or self-employment income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Freelancing in one of them is a real advantage, but it doesn’t make 1099 income tax-free. You still owe the two federal taxes, and a few of these states have business-level taxes worth knowing about.
In short: What 1099 workers in Texas, Florida, Washington and other no-income-tax states still owe in 2026, plus state business taxes to know about.
What you still owe
- Self-employment tax: 15.3% on 92.35% of net profit (the 12.4% Social Security part stops at the 2026 wage base of $184,500).
- Federal income tax: the same 2026 brackets as every other state (see 2026 brackets).
- Quarterly estimated payments to the IRS if you’ll owe $1,000 or more. There’s no separate state estimated payment for personal income tax in these states.
How much a 1099 worker owes in a no-tax state (2026)
Federal only, single filer, standard deduction, QBI deduction included, no other income:
| Net profit | SE tax | Federal income tax | Total | Share of profit |
|---|---|---|---|---|
| $50,000 | $7,065 | $2,667 | $9,732 | 19.5% |
| $75,000 | $10,597 | $4,898 | $15,495 | 20.7% |
| $100,000 | $14,130 | $8,235 | $22,365 | 22.4% |
| $150,000 | $21,194 | $16,413 | $37,608 | 25.1% |
In a state with a 5% flat income tax, the same $75,000 freelancer would owe roughly $3,000–$3,750 more, depending on that state’s deductions (see 2026 flat-tax state rates). You can check your own numbers in the 1099 tax calculator; leave the state rate at 0%.
Try the calculator1099 Tax Calculator (2026)Federal income tax, self-employment tax, and your state rate on 1099 income, using 2026 IRS figures.OpenState-by-state notes
| State | Personal income tax on 1099 income | Worth knowing |
|---|---|---|
| Alaska | None | No statewide sales tax either (some local sales taxes). |
| Florida | None | Corporate income tax applies to C corporations, not sole proprietors. |
| Nevada | None | The Commerce Tax only applies to businesses with Nevada gross revenue over $4 million. |
| New Hampshire | None | The Interest & Dividends Tax was repealed for tax periods beginning on or after January 1, 2025. NH does have business profits and business enterprise taxes with filing thresholds. |
| South Dakota | None | No state corporate income tax either. |
| Tennessee | None | State business tax generally applies once a business grosses $100,000+ in a county or city. LLCs may owe franchise & excise tax. |
| Texas | None | Franchise tax applies to LLCs and corporations, not sole proprietors; for 2026–2027 reports the no-tax-due threshold is $2.65 million of revenue, though a report may still be required. |
| Washington | None | Business & Occupation (B&O) tax is on gross receipts and can apply to sole proprietors; there are filing thresholds and a small business credit. Washington also taxes large long-term capital gains, but not earned income. |
| Wyoming | None | No corporate income tax. |
These business taxes are separate from income tax and mostly matter once revenue gets large or you form an entity. Check your state revenue department (linked below) for current thresholds.
Things that can still create a state tax bill
- Working or living in another state part of the year. If you move mid-year or physically work in an income-tax state, that state may tax the income earned there.
- Selling taxable goods or services. Sales tax is a separate issue. Texas, Florida, Tennessee, and Washington all have sales taxes that can apply to some services and digital products.
- Forming an LLC. A single-member LLC is usually ignored for federal income tax, but it can bring state filings or fees (Texas franchise reports, Tennessee F&E).
The upshot
For a Texas or Florida freelancer, planning is simpler: set aside roughly 20–25% of profit for federal taxes at typical incomes, and pay the IRS quarterly. See 2026 estimated tax due dates and the safe harbor rule.
FAQ
Do I pay taxes on 1099 income in Texas?
Texas has no personal income tax, but you still owe federal self-employment tax and federal income tax. At $75,000 of profit that’s about $15,500 (single, 2026).
Which states have no income tax in 2026?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t tax wage or self-employment income.
Does Washington’s B&O tax apply to freelancers?
It can. The B&O tax is on gross receipts and can apply to sole proprietors, but there are filing thresholds and a small business credit. Check the Washington Department of Revenue.
Do I need to pay state estimated taxes in Florida?
Not for personal income tax, since Florida doesn’t have one. You still make federal estimated payments.
Sources
- SSA: Contribution and benefit base ($184,500 for 2026)
- IRS Topic 554, Self-employment tax
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments)
- Texas Comptroller: Franchise tax
- Tennessee Department of Revenue: Business tax
- Washington DOR: Business & occupation tax
- New Hampshire DRA: Interest & Dividends Tax
- Nevada Department of Taxation: Commerce Tax