<P> All states that impose an individual income tax allow most business deductions . However, many states impose different limits on certain deductions, especially depreciation of business assets . Most of the states allow non-business deductions in a manner similar to federal rules . Few allow a deduction for state income taxes, though some states allow a deduction for local income taxes . Eight of the states allow a full or partial deduction for federal income tax . </P> <P> In addition, some states allow cities and / or counties to impose income taxes . For example, most Ohio cities and towns impose an income tax on individuals and corporations . By contrast, in New York, only New York City and Yonkers impose a municipal income tax . </P> <P> Nine U.S. states do not level a broad - based individual income tax . Some of these do tax certain forms of personal income: </P> <Ol> <Li> Alaska--no individual tax but has a state corporate income tax . Like New Hampshire, Alaska has no state sales tax, but unlike New Hampshire, Alaska allows local governments to collect their own sales taxes . Alaska has an annual Permanent Fund Dividend, derived from oil revenues, for all citizens living in Alaska after one calendar year, except for some convicted of criminal offenses . </Li> <Li> Florida--no individual income tax but has a 5.5% corporate income tax . The state once had a tax on "intangible personal property" held on the first day of the year (stocks, bonds, mutual funds, money market funds, etc .), but it was abolished at the start of 2007 . </Li> <Li> Nevada--has no individual or corporate income tax . Nevada gets most of its revenue from sales taxes and the gambling and mining industries . </Li> <Li> Tennessee has a "Hall income tax" of 6% on income received from stocks and bonds not taxed ad valorem . The Hall income tax is reduced to 5% for tax year 2016, with legislative intent that the tax be statutorily reduced by one percent annually beginning with the first annual session of the 110th general assembly and potentially eliminated by 2022 . In 1932, the Tennessee Supreme Court struck down a broad - based individual income tax that had passed the General Assembly, in the case of Evans v. McCabe . However, a number of Attorneys General have recently opined that, if properly worded, a state income tax would be found constitutional by today's court, due to a 1971 constitutional amendment . </Li> <Li> Texas--no individual income tax, but imposes a franchise tax on corporations . In May 2007, the legislature modified the franchise tax by enacting a modified gross margin tax on certain businesses (sole proprietorships and some partnerships were automatically exempt; corporations with receipts below a certain level were also exempt as were corporations whose tax liability was also below a specified amount), which was amended in 2009 to increase the exemption level . The Texas Constitution places severe restrictions on passage of an individual income tax and the use of its proceeds . </Li> <Li> Washington--no individual tax but has a business and occupation tax (B&O) on gross receipts, applied to "almost all businesses located or doing business in Washington ." It varies from 0.138% to 1.9% depending on the type of industry . </Li> <Li> Wyoming has no individual or corporate income taxes . </Li> <Li> South Dakota--no individual income tax but has a state corporate income tax on financial institutions . </Li> <Li> New Hampshire--has an Interest and Dividends Tax of 5%, and a Business Profits Tax of 8.5% . A Gambling Winnings Tax of 10% went into effect July 1, 2009 and was repealed May 11, 2011 . New Hampshire has no sales tax . </Li> </Ol>

How many us states have no income tax