Every year, the average U.S. household pays more than $5,700 in federal income taxes, regardless of their state of residence. However, state income taxes can vary significantly. Taxpayers in the most tax-heavy states can pay up to three times more than taxpayers in those states with the lightest tax loads. Taxpayers in Nebraska, Connecticut, Maryland pay exceptionally more than taxpayers in Alaska.
Low income taxes don’t always mean low taxes as a whole. For example, while residents of Washington state don’t pay income tax, they still spend over 8 percent of their annual income on sales and excise taxes. Seven states don’t collect an income tax: Washington, Wyoming, Alaska, Florida, Texas, Nevada, and South Dakota. See below for a map ranking all states by total tax load – darker red shades indicate more taxes paid, darker green indicates lower taxes. Ranks were calculated by combining a number of tax rates, and the data came from WalletHub. See the full data below the map.
While low taxes is tempting , the cost of living may be higher in the few states that don’t have income tax (Alaska, for example, has a very high cost of living due its remote location). States with no income tax often use other sources of revenue to pay for infrastructure and services. Several have higher sales, gas, and property taxes than their counterparts with income taxes.
Taxes by State
| Overall Rank (1=Lowest) | State | Effective Total State & Local Tax Rates on Median U.S. Household* | Annual State & Local Taxes on Median U.S. Household* | % Difference Between State & U.S. Avg.** | Annual State & Local Taxes on Median State Household*** | Adjusted Overall Rank (based on Cost of Living Index) |
|---|---|---|---|---|---|---|
| 1 | Alaska | 5.67% | $3,164 | -47.26% | $4,353 | 5 |
| 2 | Delaware | 6.11% | $3,407 | -43.21% | $3,909 | 1 |
| 3 | Montana | 7.29% | $4,066 | -32.23% | $3,911 | 4 |
| 4 | Nevada | 7.44% | $4,145 | -30.90% | $4,103 | 6 |
| 5 | Wyoming | 7.45% | $4,155 | -30.75% | $4,417 | 2 |
| 6 | Tennessee | 7.98% | $4,449 | -25.84% | $3,667 | 3 |
| 7 | Idaho | 8.48% | $4,730 | -21.16% | $4,216 | 7 |
| 8 | California | 8.77% | $4,888 | -18.51% | $7,167 | 36 |
| 9 | Florida | 8.83% | $4,921 | -17.97% | $4,373 | 9 |
| 10 | South Carolina | 9.02% | $5,030 | -16.16% | $4,278 | 11 |
| 11 | Oregon | 9.20% | $5,129 | -14.51% | $5,677 | 34 |
| 12 | Utah | 9.23% | $5,144 | -14.25% | $5,902 | 10 |
| 13 | Colorado | 9.27% | $5,170 | -13.82% | $6,100 | 13 |
| 14 | Alabama | 9.40% | $5,241 | -12.64% | $4,177 | 8 |
| 15 | Arizona | 9.50% | $5,299 | -11.67% | $4,977 | 12 |
| 16 | South Dakota | 9.75% | $5,439 | -9.34% | $4,757 | 16 |
| 17 | North Dakota | 9.84% | $5,488 | -8.53% | $5,493 | 18 |
| 18 | District of Columbia | 10.00% | $5,574 | -7.09% | $8,811 | 46 |
| 19 | New Hampshire | 10.27% | $5,725 | -4.57% | $7,221 | 33 |
| 20 | Hawaii | 10.33% | $5,762 | -3.96% | $8,277 | 51 |
| 21 | West Virginia | 10.39% | $5,791 | -3.48% | $4,343 | 19 |
| 22 | Louisiana | 10.39% | $5,795 | -3.41% | $4,757 | 17 |
| 23 | Georgia | 10.54% | $5,876 | -2.06% | $5,237 | 14 |
| 24 | North Carolina | 10.64% | $5,934 | -1.09% | $5,167 | 20 |
| 25 | Oklahoma | 10.75% | $5,993 | -0.11% | $4,848 | 15 |
| 26 | New Mexico | 10.82% | $6,031 | 0.53% | $5,038 | 23 |
| 27 | Virginia | 10.87% | $6,061 | 1.03% | $7,276 | 27 |
| 28 | Texas | 11.04% | $6,156 | 2.61% | $5,347 | 21 |
| 29 | Vermont | 11.04% | $6,158 | 2.64% | $6,800 | 41 |
| 30 | Missouri | 11.28% | $6,291 | 4.86% | $5,435 | 22 |
| 31 | Minnesota | 11.57% | $6,453 | 7.56% | $7,085 | 31 |
| 32 | Massachusetts | 11.61% | $6,470 | 7.85% | $9,390 | 45 |
| 33 | Washington | 11.68% | $6,514 | 8.57% | $8,023 | 37 |
| 34 | Maine | 11.75% | $6,554 | 9.24% | $6,133 | 42 |
| 35 | Indiana | 11.86% | $6,614 | 10.25% | $5,667 | 26 |
| 36 | Maryland | 11.96% | $6,666 | 11.12% | $9,552 | 44 |
| 37 | Kentucky | 12.06% | $6,723 | 12.06% | $5,293 | 29 |
| 38 | Mississippi | 12.21% | $6,810 | 13.51% | $4,954 | 24 |
| 39 | Arkansas | 12.30% | $6,858 | 14.32% | $5,142 | 25 |
| 40 | Kansas | 12.42% | $6,924 | 15.41% | $6,104 | 28 |
| 41 | Pennsylvania | 12.45% | $6,940 | 15.68% | $6,642 | 38 |
| 42 | Michigan | 12.81% | $7,145 | 19.09% | $5,843 | 30 |
| 43 | New Jersey | 12.87% | $7,175 | 19.59% | $11,237 | 47 |
| 44 | Iowa | 12.92% | $7,202 | 20.05% | $6,354 | 32 |
| 45 | Ohio | 13.09% | $7,300 | 21.68% | $6,081 | 35 |
| 46 | Wisconsin | 13.62% | $7,593 | 26.56% | $7,193 | 40 |
| 47 | Rhode Island | 13.69% | $7,634 | 27.26% | $8,697 | 48 |
| 48 | New York | 13.72% | $7,648 | 27.49% | $9,759 | 50 |
| 49 | Nebraska | 13.83% | $7,712 | 28.55% | $6,776 | 39 |
| 50 | Connecticut | 13.85% | $7,720 | 28.68% | $10,419 | 49 |
| 51 | Illinois | 14.89% | $8,299 | 38.34% | $8,330 | 43 |
*Assumes “Median U.S. Household” has an annual income of $55,754 (mean third quintile U.S. income); owns a home valued at $184,700 (median U.S. home value); owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median U.S. income.
**National Average of State and Local Tax Rates = 10.78%
***Assumes “Median State Household” has an annual income equal to the mean third quintile income of the state; owns a home at a value equal to the median of the state; owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median state income.
Above data sourced from WalletHub.
Image Source: Image, License Summary.
