Texas

Texas's total tax burden (8.6% of income) is essentially the same as North Dakota's (8.9% of income) — a difference of only -0.3 pts. On a $100K household budget, the move is roughly tax-neutral. Other factors (retirement rules, estate tax, specific categories) may matter more.

Texas has NO state income tax on wages, compared to North Dakota's top rate of 2.5%. High earners typically save thousands per year on wage income by moving. Note that property tax or sales tax may be higher in Texas to offset.

Texas state sales tax is 6.25%. With average local add-ons, the combined rate is 8.20%. This applies to most retail purchases but rules on groceries, prescriptions, and services vary.

Texas median effective property tax rate is 1.68% of home value. On a $400,000 home, that is roughly $6,720/year. Property tax typically funds schools, municipalities, and county services — rates vary sharply within a state by school district.

Texas has NO state estate tax and NO state inheritance tax. Heirs are subject only to federal estate tax (over $13.99M in 2025). This is favorable for wealth transfer.

In Texas: Social Security is not taxed. Pensions and 401(k)/IRA withdrawals are not taxed. Since Texas has no state income tax, no state-level tax applies to any retirement income.

Texas capital gains treatment: No state capital gains tax (no state income tax). Compare to federal long-term capital gains rates (0%, 15%, or 20%) — some states offer preferential treatment for long-term holdings, while others tax capital gains as ordinary income.

Texas gas tax is 20.0¢/gal — 3.0¢/gal lower than North Dakota's 23.0¢/gal. For a 15,000 mile/year driver getting 25 mpg, each 1¢/gal of gas tax = about $6/year.

Texas residency rules: Domicile + physical presence. No statutory residency test. Very flexible for new residents. To establish residency for tax purposes, typical steps include: update driver's license and vehicle registration, register to vote, file a homestead declaration, close home-state bank accounts where possible, and spend clearly more than 183 days in your new state. If your former state is aggressive (e.g., CA, NY, NJ, OR), keep documentation of every day spent in each state.

Texas recent tax law changes: 2023 property tax relief: $100K homestead exemption, compressed school tax rates. No income tax (never existed; constitutionally prohibited).

For the most current tax information in Texas, visit the official source at https://comptroller.texas.gov/. Tax laws change annually; verify rates and rules before making a permanent move. Consult a CPA for advice specific to your situation.