Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Which States Tax Their Residents the Most and Least?

A new report analyzes the states’ tax burdens as officials begin post-pandemic planning. While Democratic states typically tax their residents at greater rates, there are exceptions to the trend.

As states plan for their post-pandemic futures, officials are developing annual budgets to ensure the economic recovery occurs quickly but without negatively impacting residents. One of the biggest ways that states expand their budgets is by increasing taxes. There is great variation in tax collection represented through a state’s tax burden, which measures the proportion of total personal income that residents pay towards state and local taxes.

In a new report, WalletHub compares the three types of state tax burdens, property taxes, individual income taxes and sales and excise taxes, as a share of total personal income to better understand the tax variation across the nation. The report represents each of the tax burdens as a share of personal income. 

The report found that New York state had the greatest overall tax burden, with its property taxes, individual taxes and sales and excise taxes amounting to 12.79 percent; Alaska had the lowest at only 5.1 percent. When each tax burden category was analyzed separately, the states’ rankings often shifted. While New York still led the list for its individual income tax burden, Hawaii had the greatest total sales and excise tax burdens (6.65 percent). New Hampshire had the greatest property tax burden (5.47 percent) but it ranked among the lowest tax burden states for overall individual income and total sales and excise taxes.

Though seven states do not have a personal income tax and therefore tied for last place in that category, Tennessee had the lowest non-zero individual tax burden at just 0.08 percent. Alabama has the lowest property tax burden (1.41 percent) and Oregon has the lowest total sales and excise tax burden (1.06 percent).

Democratic states occupied most of the highest ranks for each tax burden category. The top five highest tax burden states in overall, property and individual tax burdens all voted for Joe Biden in the 2020 presidential election, while only three of the highest-ranking states in total sales and excise tax burdens were democratic, with Louisiana and Arkansas occupying ranks four and five.

Zoe is the digital editor for Governing.
Special Projects