Does Your State Pay the Most in Taxes?

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)StateEffective 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)
1Alaska5.67%$3,164-47.26%$4,3535
2Delaware6.11%$3,407-43.21%$3,9091
3Montana7.29%$4,066-32.23%$3,9114
4Nevada7.44%$4,145-30.90%$4,1036
5Wyoming7.45%$4,155-30.75%$4,4172
6Tennessee7.98%$4,449-25.84%$3,6673
7Idaho8.48%$4,730-21.16%$4,2167
8California8.77%$4,888-18.51%$7,16736
9Florida8.83%$4,921-17.97%$4,3739
10South Carolina9.02%$5,030-16.16%$4,27811
11Oregon9.20%$5,129-14.51%$5,67734
12Utah9.23%$5,144-14.25%$5,90210
13Colorado9.27%$5,170-13.82%$6,10013
14Alabama9.40%$5,241-12.64%$4,1778
15Arizona9.50%$5,299-11.67%$4,97712
16South Dakota9.75%$5,439-9.34%$4,75716
17North Dakota9.84%$5,488-8.53%$5,49318
18District of Columbia10.00%$5,574-7.09%$8,81146
19New Hampshire10.27%$5,725-4.57%$7,22133
20Hawaii10.33%$5,762-3.96%$8,27751
21West Virginia10.39%$5,791-3.48%$4,34319
22Louisiana10.39%$5,795-3.41%$4,75717
23Georgia10.54%$5,876-2.06%$5,23714
24North Carolina10.64%$5,934-1.09%$5,16720
25Oklahoma10.75%$5,993-0.11%$4,84815
26New Mexico10.82%$6,0310.53%$5,03823
27Virginia10.87%$6,0611.03%$7,27627
28Texas11.04%$6,1562.61%$5,34721
29Vermont11.04%$6,1582.64%$6,80041
30Missouri11.28%$6,2914.86%$5,43522
31Minnesota11.57%$6,4537.56%$7,08531
32Massachusetts11.61%$6,4707.85%$9,39045
33Washington11.68%$6,5148.57%$8,02337
34Maine11.75%$6,5549.24%$6,13342
35Indiana11.86%$6,61410.25%$5,66726
36Maryland11.96%$6,66611.12%$9,55244
37Kentucky12.06%$6,72312.06%$5,29329
38Mississippi12.21%$6,81013.51%$4,95424
39Arkansas12.30%$6,85814.32%$5,14225
40Kansas12.42%$6,92415.41%$6,10428
41Pennsylvania12.45%$6,94015.68%$6,64238
42Michigan12.81%$7,14519.09%$5,84330
43New Jersey12.87%$7,17519.59%$11,23747
44Iowa12.92%$7,20220.05%$6,35432
45Ohio13.09%$7,30021.68%$6,08135
46Wisconsin13.62%$7,59326.56%$7,19340
47Rhode Island13.69%$7,63427.26%$8,69748
48New York13.72%$7,64827.49%$9,75950
49Nebraska13.83%$7,71228.55%$6,77639
50Connecticut13.85%$7,72028.68%$10,41949
51Illinois14.89%$8,29938.34%$8,33043

*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.

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