State Capital Gains Tax by State (2026 & 2027 Guide)

Capital gains tax can apply when you sell investments such as stocks, mutual funds, real estate, business assets, or other property for a profit.

Federal capital gains tax rules apply nationwide, but state taxes vary widely.

Some states tax capital gains as ordinary income, some offer special deductions or exclusions, and several states have no personal income tax at all.

This 50-state guide helps taxpayers compare state capital gains tax rules and quickly find their state page.

How States Tax Capital Gains

States generally fall into three categories:

• No state income tax, so no broad individual capital gains tax
• Taxed as regular income through a flat tax system
• Taxed as regular income through graduated tax brackets

Some states also offer special treatment for certain assets such as farms, qualified businesses, or long-term investments.

Browse All 50 States

• Alabama Capital Gains Tax
  Capital gains are generally taxed through Alabama’s regular state income tax system.
• Alaska Capital Gains Tax
  Alaska has no state personal income tax, so individuals generally pay no state capital gains tax.
• Arizona Capital Gains Tax
  Arizona taxes capital gains through its flat state income tax system and may allow certain adjustments.
• Arkansas Capital Gains Tax
  Arkansas taxes capital gains and may provide partial exclusions for some long-term gains.
• California Capital Gains Tax
  California taxes capital gains as ordinary income and does not provide a separate lower capital gains rate.
• Colorado Capital Gains Tax
  Colorado generally taxes capital gains through the regular state income tax system.
• Connecticut Capital Gains Tax
  Connecticut taxes capital gains through its graduated income tax structure.
• Delaware Capital Gains Tax
  Delaware generally includes capital gains in taxable income under state tax rules.
• Florida Capital Gains Tax
  Florida has no state personal income tax, so individuals generally pay no state capital gains tax.
• Georgia Capital Gains Tax
  Georgia taxes capital gains through the regular state income tax system.
• Hawaii Capital Gains Tax
  Hawaii taxes capital gains and may have separate treatment for certain long-term gains.
• Idaho Capital Gains Tax
  Idaho taxes capital gains and may offer deductions for qualifying property sales.
• Illinois Capital Gains Tax
  Illinois taxes capital gains through its flat income tax system.
• Indiana Capital Gains Tax
  Indiana generally taxes capital gains at the same rate as other taxable income.
• Iowa Capital Gains Tax
  Iowa taxes capital gains and may offer exclusions for certain qualifying sales.
• Kansas Capital Gains Tax
  Kansas generally includes capital gains in taxable income.
• Kentucky Capital Gains Tax
  Kentucky taxes capital gains through its flat state income tax system.
• Louisiana Capital Gains Tax
  Louisiana generally taxes capital gains under regular state income tax rules.
• Maine Capital Gains Tax
  Maine taxes capital gains through its graduated income tax system.
• Maryland Capital Gains Tax
  Maryland taxes capital gains as part of regular income and local taxes may also matter.
• Massachusetts Capital Gains Tax
  Massachusetts taxes many gains and may apply different treatment depending on asset type or holding period.
• Michigan Capital Gains Tax
  Michigan taxes capital gains through its flat income tax system.
• Minnesota Capital Gains Tax
  Minnesota taxes capital gains through graduated income tax brackets and higher earners may owe more.
• Mississippi Capital Gains Tax
  Mississippi generally taxes capital gains through the state income tax system.
• Missouri Capital Gains Tax
  Missouri taxes capital gains and may allow certain deductions depending on current law.
• Montana Capital Gains Tax
  Montana taxes capital gains as income and may offer partial capital gains adjustments.
• Nebraska Capital Gains Tax
  Nebraska generally taxes capital gains through the regular income tax system.
• Nevada Capital Gains Tax
  Nevada has no state personal income tax, so individuals generally pay no state capital gains tax.
• New Hampshire Capital Gains Tax
  New Hampshire does not tax most earned income and has limited taxes that may apply in specific situations.
• New Jersey Capital Gains Tax
  New Jersey taxes capital gains through the regular state income tax system.
• New Mexico Capital Gains Tax
  New Mexico taxes capital gains and may allow a partial deduction in some cases.
• New York Capital Gains Tax
  New York taxes capital gains as regular income, and city taxes may apply for some residents.
• North Carolina Capital Gains Tax
  North Carolina taxes capital gains through its flat income tax system.
• North Dakota Capital Gains Tax
  North Dakota taxes capital gains under the regular state income tax structure.
• Ohio Capital Gains Tax
  Ohio generally taxes capital gains through the state income tax system.
• Oklahoma Capital Gains Tax
  Oklahoma taxes capital gains and may offer exclusions for certain Oklahoma assets.
• Oregon Capital Gains Tax
  Oregon taxes capital gains as ordinary income under its graduated tax system.
• Pennsylvania Capital Gains Tax
  Pennsylvania taxes many gains through its flat income tax system with unique classification rules.
• Rhode Island Capital Gains Tax
  Rhode Island generally taxes capital gains through regular income tax brackets.
• South Carolina Capital Gains Tax
  South Carolina taxes capital gains and has historically provided favorable treatment for some long-term gains.
• South Dakota Capital Gains Tax
  South Dakota has no state personal income tax, so individuals generally pay no state capital gains tax.
• Tennessee Capital Gains Tax
  Tennessee has no broad personal income tax, so individuals generally pay no state capital gains tax.
• Texas Capital Gains Tax
  Texas has no state personal income tax, so individuals generally pay no state capital gains tax.
• Utah Capital Gains Tax
  Utah taxes capital gains through its flat state income tax system.
• Vermont Capital Gains Tax
  Vermont taxes capital gains through graduated income tax brackets and may allow adjustments.
• Virginia Capital Gains Tax
  Virginia taxes capital gains through the regular state income tax system.
• Washington Capital Gains Tax
  Washington has no traditional income tax but applies a separate capital gains tax to certain high-value gains.
• West Virginia Capital Gains Tax
  West Virginia generally taxes capital gains through the regular income tax system.
• Wisconsin Capital Gains Tax
  Wisconsin taxes capital gains through its graduated income tax system.
• Wyoming Capital Gains Tax
  Wyoming has no state personal income tax, so individuals generally pay no state capital gains tax.

Why This Matters

Knowing your state capital gains tax rules can help with:

• Selling investments
• Tax planning
• Retirement withdrawals
• Real estate sales
• Business exits
• Estimated tax payments

💻 Electronic Filing Recommendation

• Use tax software or a qualified preparer when reporting capital gains
• Review both federal and state tax treatment
• Keep records of purchase dates, cost basis, and sale proceeds
• E-file for faster processing and fewer errors
• Save copies of brokerage statements and tax forms

Summary

State capital gains tax rules vary significantly across the country. Some states impose no income tax, while others tax gains through flat or graduated systems.

Reviewing your state rules before selling assets can help reduce surprises and improve tax planning.