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…As this year’s tax-filing deadline…looms closer, it’s fair to wonder 
which states have the most and least burdensome tax rates. WalletHub’s analysts searched for answers, comparing state and local tax rates in the 50 states and the District of Columbia against the national median… calculating relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income. [Below are the results.]
It’s no secret that tax bills aren’t created equal but, while most of us understand that some states don’t charge income or sales taxes, we might not realize how state-by-state tax differences result in paying considerably more or less than our neighbors in other states. To answer that question, WalletHub has released its report on:
2016’s States With The Highest & Lowest Tax Rates
| Effective Total State & Local Tax Rates on Median U.S. Household* | Annual State & Local Taxes on Median U.S. Household* | % Difference Between State & Nat’l. Avg.** | Annual State & Local Taxes on Median State Household*** | Adjusted Overall Rank (based on Cost of Living Index) | ||
| 1 | Alaska | 5.69% | $3,066 | -46.85% | $4,237 | 6 |
| 2 | Delaware | 6.02% | $3,246 | -43.74% | $3,830 | 1 |
| 3 | Montana | 6.92% | $3,728 | -35.37% | $3,561 | 3 |
| 4 | Wyoming | 7.45% | $4,015 | -30.40% | $4,312 | 2 |
| 5 | Nevada | 7.72% | $4,161 | -27.86% | $4,028 | 7 |
| 6 | Tennessee | 7.95% | $4,284 | -25.75% | $3,523 | 4 |
| 7 | Idaho | 8.48% | $4,569 | -20.80% | $4,074 | 5 |
| 8 | California | 8.80% | $4,741 | -17.81% | $6,803 | 33 |
| 9 | South Carolina | 8.80% | $4,742 | -17.80% | $4,009 | 9 |
| 10 | Florida | 9.03% | $4,868 | -15.62% | $4,305 | 11 |
| 11 | Oregon | 9.17% | $4,943 | -14.32% | $5,392 | 34 |
| 12 | Colorado | 9.41% | $5,070 | -12.11% | $5,854 | 15 |
| 13 | Alabama | 9.43% | $5,080 | -11.94% | $4,081 | 8 |
| 14 | Utah | 9.53% | $5,133 | -11.02% | $5,802 | 10 |
| 34 | Washington | 11.69% | $6,302 | 9.25% | $7,722 | 37 |
| 35 | Maryland | 11.85% | $6,387 | 10.71% | $9,320 | 44 |
| 36 | Indiana | 11.86% | $6,390 | 10.77% | $5,506 | 24 |
| 37 | Kentucky | 11.97% | $6,449 | 11.78% | $5,104 | 27 |
| 38 | Mississippi | 12.11% | $6,525 | 13.11% | $4,782 | 18 |
| 39 | Pennsylvania | 12.22% | $6,583 | 14.12% | $6,388 | 38 |
| 40 | Arkansas | 12.25% | $6,603 | 14.46% | $4,975 | 29 |
| 41 | Kansas | 12.29% | $6,625 | 14.84% | $5,853 | 28 |
| 42 | New Jersey | 12.39% | $6,675 | 15.70% | $10,891 | 47 |
| 43 | Iowa | 12.75% | $6,872 | 19.12% | $6,071 | 31 |
| 44 | Ohio | 12.97% | $6,991 | 21.19% | $5,892 | 36 |
| 45 | Michigan | 13.09% | $7,054 | 22.28% | $5,717 | 35 |
| 46 | New York | 13.38% | $7,211 | 25.00% | $9,342 | 51 |
| 47 | Rhode Island | 13.46% | $7,255 | 25.77% | $8,497 | 48 |
| 48 | Connecticut | 13.48% | $7,262 | 25.89% | $10,131 | 50 |
| 49 | Wisconsin | 13.58% | $7,316 | 26.82% | $7,065 | 41 |
| 50 | Nebraska | 13.85% | $7,466 | 29.41% | $6,525 | 39 |
| 51 | Illinois | 14.54% | $7,836 | 35.83% | $8,100 | 43 |
With tax season in full gear, WalletHub’s analysts compared various tax rates among the 50 states and the District of Columbia in terms of the national average consumer’s income and spending habits. [The results were as follows:]
Comparing the States with the Highest & Lowest Tax Rates
- Tax rates in the most expensive states are 3x higher than those in the least expensive states.
- Tax rates are 10.56% higher in Blue States (an average of $6,040) than in Red States (which average $5,463).
- New York has the highest cigarette excise-tax @ $4.35, which is 26x higher than in Missouri…[which has] the lowest @ $0.17.
- Washington has the highest sales and excise tax rate @ 8.16%, which is 9x higher than in Oregon…[which has] the lowest rate @ 0.93%.
- Pennsylvania has the highest gas tax @ $0.5040 per gallon, which is twice as high as in Alaska, the state with the lowest @ $0.1225 per gallon.
Disclosure: The original article, as written by the staff of ValueWalk.com, was edited ([ ]) and abridged (…) to ensure a fast & easy read.
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