by 
The Curious Bag
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Seven states: Florida, Nevada, New Hampshire, Tennessee, Texas, Washington and Wyoming are free from personal income tax, as of 2009. Wyoming and Nevada also aim to create a business-friendly tax structure by imposing no corporate income tax and low taxes on inventory and payroll.
Function
Aside from personal and business income taxes, states raise revenue from a variety of other taxes including sales taxes, excise taxes, license taxes, property taxes and taxes on business payroll and inventory.
Wyoming
The nonpartisan Tax Foundation ranks Wyoming as the most business-friendly state. Wyoming is free from both personal income tax and corporate income tax. It also has the lowest sales and excise taxes.
Nevada
Nevada is also free from personal and business income tax. Low state payroll taxes and no tax on inventory make Nevada attractive to businesses and contributes to the low cost of living in that state.
Sales Tax
Only five states do not collect taxes on retail sales. Those sales tax-free states are Alaska, Delaware, Montana, New Hampshire and Oregon.
Exemptions
Prescription drugs are often free from sales taxes and some states also do not tax sales of food and clothing.
Source:
Money.CNN.com: 7 tax-free havens
RetirementLiving.com: Taxes by State
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