Physicians evaluating where to practice may consider how state tax policy affects net income. State income tax rates range from 0% in some states to graduated systems in others, and states without income tax often rely more heavily on property or consumption-based taxes.

1. Wyoming — has no personal income tax and ranks among the top states in overall tax competitiveness. Its tax structure is associated with a lower overall tax burden relative to many states. It has a smaller physician workforce compared with more populated states, reflecting variation in physician distribution across the US.
2. Florida — does not levy personal income tax and has one of the largest physician workforces in the US. Its tax structure relies more on sales taxes than income taxes.
3. Texas — has no personal income tax and a large physician workforce. State and local revenue relies more heavily on property and sales taxes compared with national averages.
4. Tennessee — does not tax wage income. It has a smaller physician workforce than more populated states, and its tax structure relies more on consumption-based taxes, including sales tax, as part of its revenue structure.
5. South Dakota — has no personal income tax and is ranked among the more competitive state tax systems. Its overall tax structure is relatively simple compared with states with graduated income taxes. It has a smaller physician workforce relative to national averages.
6. Nevada — does not impose a personal income tax. State revenue is derived primarily from sales and other consumption-based taxes. It has a smaller physician workforce compared with many states, reflecting broader variation in physician supply.
7. Washington — does not tax wage income and has a larger physician workforce compared with many states, based on national data. The state applies other taxes, including sales tax and a capital gains tax on certain transactions.
8. New Hampshire — does not tax wage income. It has a smaller physician workforce compared with more populated states, and property taxes represent a larger share of total tax revenue.
9. Alaska — has no personal income tax and no statewide sales tax, though local sales taxes may apply. Its physician workforce is smaller relative to national averages.
10. Arizona — uses a flat individual income tax structure rather than a graduated system, resulting in a single tax rate across income levels.

North Carolina — is a near-miss based on its overall tax structure.  It uses a flat income tax system and has a large physician workforce compared with many states, though its overall tax burden is higher relative to states without income tax in national comparisons.

Colorado — is also a near-miss due to its overall tax profile. It applies a flat income tax structure and has a larger physician workforce, but its total tax burden is higher compared with top-ranked states in tax competitiveness analyses.

Sources: Tax Foundation, Kaiser Family Foundation