This year, Uncle Sam will take his cut of the past year’s earnings on May 17, slightly later than usual due to the COVID-19 pandemic. Many taxpayers are undoubtedly wondering how this year’s Tax Day will affect their finances, as a lot of people are struggling financially as a result of the pandemic. Since the tax code is so complicated and has rules based on individual household characteristics, it’s hard for the average person to tell how they will be impacted.
One simple ratio known as the “tax burden” helps cut through the confusion. Unlike tax rates, which vary widely based on an individual’s circumstances, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. And it isn’t uniform across the U.S., either.
To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state.
For more fun (or not so fun) facts about 2021’s tax landscape, check out WalletHub’s Tax Day Facts infographic.
Main Findings
Overall Tax Burden by State
|
Overall Rank (1=Highest) |
State |
Total Tax Burden |
Property Tax Burden |
Individual Income Tax Burden |
Total Sales & Excise Tax Burden |
|---|---|---|---|---|---|
| 1 | New York | 12.79% | 4.40% (6) | 4.96% (1) | 3.43% (22) |
| 2 | Hawaii | 12.19% | 2.45% (35) | 3.09% (10) | 6.65% (1) |
| 3 | Vermont | 10.75% | 5.04% (2) | 2.41% (22) | 3.30% (26) |
| 4 | Maine | 10.50% | 4.60% (4) | 2.45% (21) | 3.45% (20) |
| 5 | Connecticut | 10.44% | 4.06% (7) | 3.56% (6) | 2.82% (39) |
| 6 | Minnesota | 9.99% | 2.86% (23) | 3.68% (5) | 3.45% (20) |
| 7 | New Jersey | 9.98% | 4.94% (3) | 2.47% (20) | 2.57% (43) |
| 8 | Rhode Island | 9.69% | 4.44% (5) | 2.29% (27) | 2.96% (35) |
| 9 | Illinois | 9.52% | 4.00% (8) | 2.11% (32) | 3.41% (24) |
| 10 | California | 9.48% | 2.64% (32) | 3.78% (4) | 3.06% (34) |
| 11 | Kansas | 9.36% | 3.12% (17) | 2.28% (28) | 3.96% (14) |
| 12 | Maryland | 9.32% | 2.67% (30) | 3.89% (3) | 2.76% (41) |
| 13 | Iowa | 9.26% | 3.39% (14) | 2.53% (18) | 3.34% (25) |
| 14 | Nebraska | 9.01% | 3.77% (10) | 2.30% (26) | 2.94% (36) |
| 15 | Mississippi | 8.99% | 2.80% (25) | 1.64% (37) | 4.55% (7) |
| 16 | Ohio | 8.96% | 2.78% (26) | 2.54% (17) | 3.64% (18) |
| 17 | Wisconsin | 8.89% | 3.25% (16) | 2.72% (13) | 2.92% (38) |
| 18 | West Virginia | 8.84% | 2.32% (36) | 2.64% (14) | 3.88% (17) |
| 19 | Louisiana | 8.82% | 1.93% (45) | 1.51% (38) | 5.38% (4) |
| 20 | Arkansas | 8.80% | 1.79% (46) | 2.20% (31) | 4.81% (5) |
| 21 | Massachusetts | 8.77% | 3.57% (13) | 3.29% (7) | 1.91% (45) |
| 22 | Kentucky | 8.58% | 1.99% (44) | 3.17% (9) | 3.42% (23) |
| 23 | Pennsylvania | 8.46% | 2.82% (24) | 2.52% (19) | 3.12% (32) |
| 24 | Michigan | 8.34% | 3.02% (19) | 2.23% (30) | 3.09% (33) |
| 24 | Washington | 8.34% | 2.65% (31) | 0.00% (44) | 5.69% (3) |
| 26 | Colorado | 8.31% | 2.76% (28) | 2.26% (29) | 3.29% (27) |
| 27 | Oregon | 8.29% | 3.06% (18) | 4.17% (2) | 1.06% (50) |
| 27 | Utah | 8.29% | 2.30% (38) | 2.73% (12) | 3.26% (29) |
| 29 | Nevada | 8.23% | 2.12% (42) | 0.00% (44) | 6.11% (2) |
| 30 | Arizona | 8.19% | 2.53% (34) | 1.43% (40) | 4.23% (10) |
| 30 | New Mexico | 8.19% | 2.00% (43) | 1.44% (39) | 4.75% (6) |
| 30 | Texas | 8.19% | 3.91% (9) | 0.00% (44) | 4.28% (9) |
| 33 | Indiana | 8.15% | 2.19% (40) | 2.05% (33) | 3.91% (16) |
| 34 | North Carolina | 8.07% | 2.15% (41) | 2.63% (15) | 3.29% (27) |
| 35 | Georgia | 7.91% | 2.59% (33) | 2.38% (23) | 2.94% (36) |
| 36 | Idaho | 7.88% | 2.32% (36) | 2.38% (23) | 3.18% (30) |
| 37 | Virginia | 7.86% | 2.93% (22) | 2.87% (11) | 2.06% (44) |
| 38 | North Dakota | 7.81% | 2.97% (21) | 0.87% (41) | 3.97% (13) |
| 39 | Missouri | 7.75% | 2.25% (39) | 2.37% (25) | 3.13% (31) |
| 40 | Alabama | 7.45% | 1.41% (50) | 1.96% (35) | 4.08% (12) |
| 40 | Montana | 7.45% | 3.59% (12) | 2.58% (16) | 1.28% (47) |
| 40 | South Carolina | 7.45% | 2.77% (27) | 1.99% (34) | 2.69% (42) |
| 43 | South Dakota | 7.37% | 3.02% (19) | 0.00% (44) | 4.35% (8) |
| 44 | Oklahoma | 7.13% | 1.67% (49) | 1.92% (36) | 3.54% (19) |
| 45 | Florida | 6.97% | 2.74% (29) | 0.00% (44) | 4.23% (10) |
| 46 | New Hampshire | 6.84% | 5.47% (1) | 0.13% (42) | 1.24% (48) |
| 47 | Delaware | 6.21% | 1.77% (47) | 3.25% (8) | 1.19% (49) |
| 48 | Wyoming | 6.14% | 3.33% (15) | 0.00% (44) | 2.81% (40) |
| 49 | Tennessee | 5.74% | 1.70% (48) | 0.08% (43) | 3.96% (14) |
| 50 | Alaska | 5.10% | 3.68% (11) | 0.00% (44) | 1.42% (46) |
Red States vs. Blue States
Ask the Experts
For more insight on the differences in state tax policies, we asked a panel of taxation experts to weigh in with their thoughts on the following key questions:
- What state and local tax instruments are most fair? Least fair?
- What’s the relationship between state tax burden and economic growth?
- Should states and localities tax property at different marginal rates like income?
- What makes some state and local tax systems better able to weather economic downturns?
- What are the most effective ways for state and local governments to recover losses in tax revenues caused by the pandemic?
Ask the Experts
- Roberta Mann
Mr. & Mrs. L.L. Stewart Professor of Business Law – University of Oregon School of Law
Read More
- Annette Nellen
CPA, Esq. – Professor, and Director, MST Program – San José State University
Read More
- Philip Cary Christian
Ph.D. – Associate Professor, Department of Public and Nonprofit Studies – Georgia Southern University
Read More
- Wilton B. Hyman
Professor of Law – New England Law | Boston
Read More
Methodology
In order to determine the states that tax their residents the most and least aggressively, WalletHub compared the 50 states across the following three tax burdens and added the results to obtain the overall tax burden for each state:
- Property Tax as a Share of Personal Income
- Individual Income Tax as a Share of Personal Income
- Total Sales & Excise Tax as a Share of Personal Income
Sources: Data used to create this ranking were collected from the Tax Policy Center.
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