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States Taxes: Where They're Highest, and Where They're Lowest

States with the highest taxesWhen people think about their taxes, they often focus on how much money they send to Washington, but your state and local tax burden is a big piece of the puzzle -- as of 2010, those taxes soaked up, on average, 9.9% of Americans' income. But the figure varies widely depending on where you live.

You might expect the biggest thing pushing those taxes lower would be small-government advocates in power in state capitals trimming services and revenue to match. And to a degree, says Tax Foundation economist Scott Drenkard, that's true. Many states do less for their citizens, and thus have less need to tax. "They don't collect that much in taxes" Drenkard said, "so they don't have that much of a burden."

But the most important factor is less obvious: How much tax revenue a state can collect from businesses and people who don't live there. Think oil- and resource-rich states like Alaska and North Dakota, or Nevada, which draws a large percentage of its revenue from tourism.

There's also the matter of what gets taxed: While sales and excise taxes and corporate taxes have the potential to export some of a state's tax burden to non-residents, property tax and income taxes largely fall on residents.

Click through our gallery to see the 10 states where residents paid the most in state and local taxes relative to per capita income -- and the 10 where they paid the least.





24/7 Wall St. based its findings on the Tax Foundation's annual State and Local Tax Burden report, and also reviewed per capita income and property, income, excise and sales taxes, which were all for the 2010 fiscal year, with the exception of excise tax rates, which are as of July 1, 2012. In addition, it reviewed cost-of-living data from the Missouri Economic Research and Information Institute for the second quarter of 2012.

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bter220

Texas state tax is 8.25% and has been for LONG time...seems like a lot of these stats are wrong.

November 01 2012 at 10:42 AM Report abuse rate up rate down Reply
Chris

I just took a great class on small business accounting and taxation. You can find it at

http://businessschooltutorials.com/business-study-guides/financial-and-managerial-accounting-study-guide

I highly recommend it.

C.

October 29 2012 at 5:42 PM Report abuse rate up rate down Reply
Chris

I just took a great online tutorial on Accounting and small business taxation. You can find it at

http://businessschooltutorials.com/business-school-tutorial-videos/financial-and-managerial-accounting

it's accompanying study guidet is at

http://businessschooltutorials.com/business-study-guides/financial-and-managerial-accounting-study-guide

It helped me a lot.

C.

October 29 2012 at 5:38 PM Report abuse rate up rate down Reply
cpo1514

Blue States have high taxes and high unenjoyment,,,, there is a message to learn about Kool-Aide drinkers iand taking your $$$$ to redistribute!!!

October 29 2012 at 9:08 AM Report abuse -1 rate up rate down Reply
Denise

I live in Pennsylvania where we have a Republican governor and a Republican majority in the state house. What we don't have is tax on food and clothing except for leathers and furs and prepared food. But the article didn't mention that. At our state lines we have a ton of outlet malls that others travel to just to buy those items!

October 28 2012 at 11:05 PM Report abuse +1 rate up rate down Reply
fgr111

Is it any coincidence that most of the highest taxed states are controlled by the left

October 28 2012 at 12:58 PM Report abuse -2 rate up rate down Reply
1 reply to fgr111's comment
abcadams1

No. It is pretty much even. CA - Democratic Governor (D); ME - Republican Governor (R); CT-R; MA - D; MN-D; NJ-R; NY-D; PA-R; WI-R; and RI - Independent Govenor (I). 5 Republican Governors; 4 Democratic Governors; and one Independent Governor.

October 28 2012 at 9:47 PM Report abuse rate up rate down Reply
shawn jamieson

This is the second time I am writing this. It was not posted the first time. Guess the Daily Finance doesn't want the truth to be known but here goes again. These tax rates are all bull crap. Florida has no state or city income taxes making it one of the lowest, right? Wrong they tax or fee everything to death. utility bills (comccast,FPL, water and waste services and Suburban propane) have a list as long as six items of taxes and fees one bill just simply itemizes the tax three times as "other tax". Property taxes are sky high and home owner permits to work on their house went from $75 a few years ago to $270 now. Yes I have to pay some idiot $270 for the right to work on my own house. Sounds a bit like extortion to me. This occurs in every state, hidden taxes they want to call fees surcharges and permits. So don't be fooled by this bogus claim of low taxes in some states. They will get the money out of your pocket one way or another. Get this, Massachusettes taxes their motorists on the value of their vehicles every year so I guess the state, not the buyer really owns the car the tax payer paid for.

October 28 2012 at 10:17 AM Report abuse +1 rate up rate down Reply
1 reply to shawn jamieson's comment
progressivehoax

270 for a Building Permit is cheap, up here the cost ranges form 300 to 475 depending on what you are doing to the structure.

October 28 2012 at 10:46 AM Report abuse rate up rate down Reply
hbobby2

But when you add in local communities, that's where it adds up,. especially near a military base, such as in KY. they are sticking it to us in this town, especially in gas prices. Every time they have a "free" event, prices goes up. Just free for the locals.The head Repub bitch about economy/money spent, budget..., but his state is sure cashing in!

October 28 2012 at 8:44 AM Report abuse rate up rate down Reply
Joe

They also spelled Connecticut wrong...it's called Corrupticut thanks to all the corrupt politicians we have here.

October 28 2012 at 8:44 AM Report abuse +1 rate up rate down Reply
2 replies to Joe's comment
Eric

Say whattt???? You think you have it bad?!?!?!? Come try out Louisiana where we have the best politicians money can buy!!!

October 28 2012 at 9:30 AM Report abuse +4 rate up rate down Reply
1 reply to Eric's comment
rocketnam

yes and NEW JERSEY runs a close second

October 29 2012 at 2:33 AM Report abuse rate up rate down
gary

in yuma az we have the highest unemployment, if you dont have an income, dont mater what the taxes are

October 28 2012 at 10:05 AM Report abuse +1 rate up rate down Reply
kdiapoulis

New Yok ???? Who edits this stuff !!!!

October 27 2012 at 11:28 PM Report abuse +1 rate up rate down Reply