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Taxes are almost inescapable.
Most everyone has taxes they have to pay. I’ll bet that even if you are exempt, you’ve had to pay taxes before or at least have to pay some kind of tax still.
From personal to sales and even property taxes, each state has its own rates that are applied and vary throughout the country.
While some enjoy more of a lighter tax load, others deal with lots of tax obligations.
Since each state varies, we wanted to look into what each state taxes the most. Keep reading for some insights into each of the three biggest taxes.
Most Interesting Findings
- There are 23 states with income tax in the lead. The highest income tax charged is, not surprisingly, in California with workers being taxed 9.3% of their take-home pay. The two runner-ups are Oregon with 9% and Hawaii with 8.25%. Talk about needing a tax break! The lowest of those 23 income-led states is Colorado with a whopping 4.63%.
- If you want to get away from income taxes, there are 9 states that don’t tax your paycheck. New Hampshire, Texas, South Dakota, Alaska, Florida, Washington, Nevada, Tennessee and Wyoming.
- There’s only one state where property taxes outweigh the rest of the taxes, and that’s Alaska. The reason the state’s property taxes are higher than the other taxes is that there are no income or sales taxes collected there.
- Alaska isn’t the only state where residents get a sort of tax break from sales and income taxes. New Hampshire is another unicorn state that gives its residents a break. Although, the state does have one of the highest property tax rates in the country with 1.86%. We’re sure the residents have forgiven the state for that, though.
- New Jersey has the highest property tax rate in the country. With a 1.89% property tax rate, you’d think the state would cut back on income and sales taxes. But instead, those are both high rates as well. In fact, New Jersey collects the most sales tax between the three with a rate of 6.63%. So much for being the garden state. With those tax rates, I’ll stick with growing an herb garden in my apartment.
- Mississippi collects more sales tax than it does other taxes. At 7%, you better grab your scissors and start clipping coupons. But the state isn’t the only one that collects a 7% sales tax. Tennessee, Indiana and Rhode Island are on that list as well.
While state and federal governments may enjoy collecting taxes, those who have to pay the taxes sure don’t.
The taxes do go toward important things like community development and law enforcement, but it still doesn’t feel any better when you work a 40-hour week just to have half of your paycheck stripped away.
So we found the states that collect the least taxes, as well as the states you’re going to want to avoid.
How We Determined What Each State Taxes The Most
We evaluated what each state taxes the most from three areas:
- Property Tax
- Individual Income Tax
- Total Sales Tax
We collected the above data from a combination of the Tax Foundation and scouring state tax documents. The highest percentage was selected as the area most taxed by the state.
Not all states have an income or state sales tax. Alaska has neither- which is why the northern state is the only state to have property tax as the most taxed.
We looked at each area from a state perspective and did not include city/metropolitan tax and property taxes. Of course, as everyone knows, those can add up!
We did not include the “sin” taxes (taxes on liquor, cigarettes, beer, wine, and other vices) because while they are a large percentage of purchase, it is murky how much the individual spends on them.
However, they are pretty steep. If we had included them this map would look more like (cigarette, cigarette, cigarette, liquor).
Where is Your Money Going?
Between sales, personal and property taxes, you probably know just where your money is going. The amount can vary depending on the state. You’ll probably want to avoid California altogether because the combined total of its tax rates is off the charts. But if you were wondering where the majority of your money goes in each state, we’ve made a chart. These taxes are the ones collected the most in each state.
| State | Tax | Property Tax | Income Tax | Sales Tax |
|---|---|---|---|---|
| Alabama | Income | 0.33% | 5.00% | 4.00% |
| Alaska | Property | 1.04% | 0 | 0.00% |
| Arizona | Sales | 0.72% | 4.17% | 5.60% |
| Arkansas | Sales | 0.52% | 5.90% | 6.50% |
| California | Income | 0.74% | 9.30% | 7.25% |
| Colorado | Income | 0.60% | 4.63% | 2.90% |
| Connecticut | Sales | 1.63% | 5.50% | 6.35% |
| Delaware | Income | 0.43% | 6.60% | 0.00% |
| Florida | Sales | 0.97% | 0 | 6.00% |
| Georgia | Income | 0.83% | 5.75% | 4.00% |
| Hawaii | Income | 0.26% | 8.25% | 4.00% |
| Idaho | Income | 0.69% | 6.93% | 6.00% |
| Illinois | Sales | 1.73% | 4.95% | 6.25% |
| Indiana | Sales | 0.85% | 3.23% | 7.00% |
| Iowa | Income | 1.29% | 7.44% | 6.00% |
| Kansas | Sales | 1.29% | 5.70% | 6.50% |
| Kentucky | Sales | 0.72% | 5.00% | 6.00% |
| Louisiana | Income | 0.18% | 6.00% | 4.45% |
| Maine | Income | 1.09% | 7.15% | 5.50% |
| Maryland | Sales | 0.87% | 4.75% | 6.00% |
| Massachusetts | Sales | 1.04% | 5.05% | 6.25% |
| Michigan | Sales | 1.62% | 4.25% | 6.00% |
| Minnesota | Sales | 1.05% | 6.80% | 6.88% |
| Mississippi | Sales | 0.52% | 5.00% | 7.00% |
| Missouri | Income | 0.91% | 5.40% | 4.23% |
| Montana | Income | 0.83% | 6.90% | 0.00% |
| Nebraska | Income | 1.76% | 6.84% | 5.50% |
| Nevada | Sales | 0.84% | 0 | 6.85% |
| New Hampshire | Sales | 1.86% | 0 | 0.00% |
| New Jersey | Sales | 1.89% | 5.53% | 6.63% |
| New Mexico | Income | 0.55% | 4.90% | 5.13% |
| New York | Income | 1.23% | 6.21% | 4.00% |
| North Carolina | Income | 0.78% | 5.25% | 4.75% |
| North Dakota | Sales | 1.42% | 2.04% | 5.00% |
| Ohio | Sales | 1.36% | 3.33% | 5.75% |
| Oklahoma | Income | 0.74% | 5.00% | 4.50% |
| Oregon | Income | 0.87% | 9.00% | 0.00% |
| Pennsylvania | Sales | 1.35% | 3.07% | 6.00% |
| Rhode Island | Sales | 1.35% | 3.75% | 7.00% |
| South Carolina | Income | 0.50% | 7.00% | 6.00% |
| South Dakota | Sales | 1.28% | 0 | 4.50% |
| Tennessee | Sales | 0.68% | 0 | 7.00% |
| Texas | Sales | 1.81% | 0 | 6.25% |
| Utah | Sales | 0.60% | 4.95% | 6.10% |
| Vermont | Income | 1.59% | 6.60% | 6.00% |
| Virginia | Income | 0.74% | 5.75% | 5.30% |
| Washington | Sales | 0.92% | 0 | 6.50% |
| West Virginia | Income | 0.49% | 6.50% | 6.00% |
| Wisconsin | Income | 1.76% | 6.27% | 5.00% |
| Wyoming | Sales | 0.58% | 0 | 4.00% |
Author
Amanda Postma is a writer for the Zippia Career Advice blog with a focus on creating entertaining content to help you through your job search. She received her BA from the University Of Missouri-Columbia.
