What is a flat state income tax?

A flat state income tax charges the same percentage rate on all taxable income, regardless of how much you earn. Unlike the federal progressive system with seven brackets, a flat-tax state applies one rate — for example, Illinois charges 4.95% whether you earn $30,000 or $300,000.

Are flat-tax states moving to no income tax?

Several flat-tax states have been reducing their rates in recent years. Iowa transitioned to a flat 3.8% in 2025 (previously progressive). Some states have proposed eventually eliminating their income tax entirely, but most flat-tax states continue to depend on the revenue.

States With a Flat Income Tax

State Taxes3 min read·Updated for 2025

Quick Answer

About a dozen states use a flat (single-rate) income tax instead of progressive brackets. Rates range from around 2.5% (Arizona) to 5.0% (Massachusetts). Flat taxes are simpler to calculate — you multiply your taxable income by one rate — but they take the same percentage from everyone regardless of income. Whether a flat-tax state is "better" depends on your income level and what you would pay under a progressive system.

Flat-Tax States in 2025

State	Flat Rate
Arizona	2.50%
Colorado	4.40%
Georgia	5.39%
Idaho	5.695%
Illinois	4.95%
Indiana	3.05%
Iowa	3.80%
Kentucky	4.00%
Massachusetts	5.00%
Michigan	4.25%
Mississippi	4.70%
North Carolina	4.50%
Pennsylvania	3.07%
Utah	4.65%

Note: Some states recently switched from progressive to flat. This list reflects 2025 rates and may include states that transitioned within the last few years.

Real Example With Actual Numbers

Compare two workers earning $90,000 — one in Illinois (flat 4.95%) and one in California (progressive up to 13.3%).

Illinois (Flat):

State taxable income: ~$90,000
State tax: $90,000 x 4.95% = $4,455

California (Progressive):

State taxable income: ~$90,000
State tax: approximately $4,200 (progressive rates, with lower brackets taxed at 1-6%)

At $90,000, the difference is modest — Illinois is actually slightly higher. But at $200,000:

Illinois: $200,000 x 4.95% = $9,900
California: approximately $14,500 (higher progressive rates kick in)

Flat taxes favor higher earners, while progressive taxes are gentler on lower incomes. See your specific state at the SalaryHog calculator.

Flat Tax Pros and Cons

Advantages

Simplicity: One rate, easy to calculate and plan around
Predictability: You always know your exact state tax percentage
No bracket creep: Raises are taxed at the same rate as existing income
Competitive rates: Many flat-tax states have set rates lower than the top progressive rates in neighboring states

Disadvantages

Same rate for all incomes: Someone earning $25,000 pays the same percentage as someone earning $250,000
Effectively regressive: When combined with sales tax and property tax, flat income taxes can mean a higher total tax burden on lower earners
No progressive relief: No lower rate on your first dollars of income like the federal system provides

How Flat-Tax States Compare to No-Tax States

For someone earning $80,000:

State Type	Example	State Tax on $80K
No income tax	Texas	$0
Low flat tax	Pennsylvania (3.07%)	$2,456
Medium flat tax	North Carolina (4.5%)	$3,600
High flat tax	Massachusetts (5.0%)	$4,000
Progressive	New York	~$3,900

Use the relocation tool to compare take-home pay across any states.

Trend Toward Flat Taxes

Several states have recently converted from progressive brackets to flat rates, including Iowa, Georgia, and Mississippi. The argument for conversion is simplicity and competitiveness with neighboring states. Critics argue it shifts the tax burden toward lower-income residents.

For your specific tax situation, enter your salary at the SalaryHog calculator and select your state to see the exact impact of flat vs progressive state taxes on your take-home pay.