One thing some people may have heard of is "no income tax law." This phrase can actually refer to a few different kinds of law. First, it refers to the law of states that do not tax the income of their citizens. Secondly, it can also refer to Federal Laws that allow certain individuals to avoid paying federal income taxes. Most states in the US charge a state income tax. This is done to help fund services provided by state governments to their citizens. However, not every state actually has a state income tax. Several don't. These states include Florida, Alaska, South Dakota, Nevada, Texas, Wyoming and Washington. However, there are a few exceptions in these states. Sometimes corporations that reside in these states are still forced to pay state income taxes. This is the case in Florida. A few additional states only charge state income taxes on certain kinds of income. In Tennessee and New Hampshire, the state government only charges income taxes on income produced from either dividends or interest. However, states that have no state income tax make up the revenue it other ways. Sometimes this is done through higher sales taxes. If the cost of living is high enough in a state, a high sales tax can more than make up for not having a state income tax. In other states without a state income tax, this lost revenue may be made up for with high property taxes. This is why a person should be educated on all taxes before moving to a new state. In other cases, "no income tax law" may refer to laws that allow certain individuals to avoid paying federal income taxes. One of the largest groups of these people are those with no income or income so low that no income taxes are applied. However, there are also cases in which individuals with significant levels of income can also avoid paying income taxes. This is due to specific deductions, tax credits and "loop holes" that exist within the tax code that can be taken advantage of. One such example is the earned income tax credit. When this tax credit was introduced into the tax code, it resulted in an extra six percent of income tax filers not having to pay any income taxes at all. The percentage of people who file that don't have to pay income taxes also increased significantly when a child tax credit was introduced under the Bush administration.