Capital Gains Tax by State (2025)
Most states tax capital gains as ordinary income. Nine states with no income tax also levy no capital gains tax. A few states offer reduced rates or exclusions. Washington is unique: no income tax, but a 7% tax on capital gains above $250K.
| Rank | State | Treatment |
|---|---|---|
| 1 | Alaska | No Tax |
| 2 | Florida | No Tax |
| 3 | Nevada | No Tax |
| 4 | New Hampshire | No Tax |
| 5 | South Dakota | No Tax |
| 6 | Tennessee | No Tax |
| 7 | Texas | No Tax |
| 8 | Wyoming | No Tax |
| 9 | Arizona | Reduced Rate |
| 10 | Arkansas | Reduced Rate |
| 11 | Montana | Reduced Rate |
| 12 | New Mexico | Reduced Rate |
| 13 | South Carolina | Reduced Rate |
| 14 | Wisconsin | Reduced Rate |
| 15 | Washington | Special Rules |
| 16 | North Dakota | As Income (1.9%) |
| 17 | Indiana | As Income (3.0%) |
| 18 | Pennsylvania | As Income (3.1%) |
| 19 | Ohio | As Income (3.5%) |
| 20 | Kentucky | As Income (4.0%) |
| 21 | Louisiana | As Income (4.3%) |
| 22 | Michigan | As Income (4.3%) |
| 23 | Colorado | As Income (4.4%) |
| 24 | North Carolina | As Income (4.5%) |
| 25 | Utah | As Income (4.7%) |
| 26 | Mississippi | As Income (4.7%) |
| 27 | Oklahoma | As Income (4.8%) |
| 28 | Missouri | As Income (4.8%) |
| 29 | Illinois | As Income (5.0%) |
| 30 | Alabama | As Income (5.0%) |
| 31 | West Virginia | As Income (5.1%) |
| 32 | Georgia | As Income (5.5%) |
| 33 | Iowa | As Income (5.7%) |
| 34 | Kansas | As Income (5.7%) |
| 35 | Maryland | As Income (5.8%) |
| 36 | Virginia | As Income (5.8%) |
| 37 | Idaho | As Income (5.8%) |
| 38 | Nebraska | As Income (5.8%) |
| 39 | Rhode Island | As Income (6.0%) |
| 40 | Delaware | As Income (6.6%) |
| 41 | Connecticut | As Income (7.0%) |
| 42 | Maine | As Income (7.1%) |
| 43 | Vermont | As Income (8.8%) |
| 44 | Massachusetts | As Income (9.0%) |
| 45 | Minnesota | As Income (9.8%) |
| 46 | Oregon | As Income (9.9%) |
| 47 | New Jersey | As Income (10.8%) |
| 48 | New York | As Income (10.9%) |
| 49 | Hawaii | As Income (11.0%) |
| 50 | California | As Income (12.3%) |
Methodology
Capital gains treatment from state revenue department publications. "Ordinary" means taxed at regular income tax rates. "Reduced" means partial exclusion or lower rate. "None" means no state capital gains tax.
Frequently Asked Questions
Frequently Asked Questions
Most states tax capital gains as ordinary income — meaning your investment profits are added to your regular income and taxed at your marginal rate. Nine states with no income tax also have no capital gains tax.
Washington has no income tax but enacted a 7% tax on capital gains exceeding $250,000 per year, which took effect in 2022. This makes it unique among no-income-tax states.
Most states do not distinguish between long-term and short-term capital gains — both are taxed as ordinary income. The federal distinction (lower rates for long-term gains) generally does not apply at the state level.
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