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Tax Burden by State 2021

Taxes are a necessary evil when you live in the United States. Not only do you have to pay federal taxes, but you also have to pay taxes to your state. While it can be a burden, these tax dollars are critical to the state's revenue, which is used to build and repair critical infrastructure, fund state programs, and other important purposes.

Not only do state taxes cut into your household income, but understanding how much you have to pay can be confusing. Each state has its own rules surrounding different types of taxes and each taxpayer's circumstances (i.e., is the taxpayer married, or does the taxpayer have dependents?) To make it easier to understand how much a person has to pay in each state, we can look at a tax burden ratio.

The tax burden is a measure of all of the total income residents of a state pay in state and local taxes. For this article, we're going to take a look at the states that have the highest and lowest tax burdens based on data compiled by WalletHub. Each tax burden listed here takes into account property taxes, income taxes, and sales and excise taxes.

Tax Burden by State

The state with the highest tax burden based on these three types of taxes is New York, which has a total tax burden of 12.28%. New York also has the highest individual income tax rate of 4.40%. Hawaii follows with a total tax burden of 11.48% and the highest total sales and excise tax burden of 6.36%. Vermont comes in third place with a tax burden of 10.73%. Other states with a total tax burden higher than 10% are Maine and Minnesota, with 10.57% and 10.19%.

The state with the lowest tax burden is Alaska at 5.16%. Alaska is one of seven states with no state income tax. Delaware follows with 5.52% and the second-lowest sales and excise tax rate of 1.20%.

When breaking down tax burdens by category, New Hampshire has the highest property tax burden in the nation at 5.57%. Vermont and New Jersey also have property tax burdens that exceed 5% with 5.12% and 5.01%. The lowest property tax burden is in Alabama, where the rate is 1.43%. Oklahoma, Arkansas, Delaware, Tennessee, and New Mexico also have property taxes that fall below 2%, ranging from 1.65% to 1.99%.

When it comes to the individual income tax burden, New York has the highest at 4.40%. Oregon's is the second-highest at 4.20%. Several states have no income taxes. These states are Nevada, Washington, Florida, South Dakota, Alaska, Texas, and Wyoming.

When looking at the sales and excise tax burden, Hawaii has the highest in the nation at 6.36%. Nevada has the second-highest at 6.22%. The lowest sales and excise tax burden can be found in Oregon, where the rate is 1.05%. New Hampshire, Delaware, Montana, Alaska, and Massachusetts all have rates below 2%.

Here are the 10 states with the highest tax burdens:

  1. New York (4.81%)
  2. Oregon (4.05%)
  3. Maryland (3.87%)
  4. Minnesota (3.68%)
  5. California (3.57%)
  6. Massachusetts (3.24%)
  7. Kentucky (3.22%)
  8. Connecticut (3.03%)
  9. Hawaii (2.91%)
  10. North Carolina (2.78%)

Tax Burden by State 2021

State Property Tax Burden Indiv. Income Tax Burden Tot. Sales & Excise Tax Burden
Alaska3.66%0.00%1.44%
Florida2.74%0.00%3.82%
Nevada2.24%0.00%6.02%
South Dakota2.87%0.00%4.41%
Texas3.82%0.00%4.36%
Washington2.59%0.00%5.61%
Wyoming4.32%0.00%3.19%
Tennessee1.90%0.11%4.27%
New Hampshire5.45%0.12%1.29%
North Dakota2.46%0.88%4.49%
Arizona2.61%1.41%4.24%
Louisiana2.08%1.44%4.99%
Kansas3.14%1.62%4.01%
Mississippi2.76%1.68%4.58%
New Mexico1.97%1.74%4.95%
Oklahoma1.66%1.82%3.64%
Alabama1.39%1.89%4.00%
South Carolina2.89%1.94%2.72%
Illinois4.04%2.05%3.58%
Michigan3.16%2.20%3.04%
Colorado2.72%2.24%3.19%
Idaho2.33%2.24%3.18%
Indiana2.22%2.26%3.74%
Rhode Island4.75%2.30%3.15%
Vermont5.12%2.31%3.34%
Arkansas1.79%2.34%4.98%
Georgia2.72%2.37%3.01%
Nebraska3.84%2.37%3.00%
New Jersey5.05%2.40%2.41%
Missouri2.23%2.42%3.21%
Iowa3.41%2.52%3.56%
Ohio2.80%2.54%3.97%
Delaware1.79%2.55%1.21%
Pennsylvania2.87%2.57%3.14%
Montana3.44%2.58%1.25%
Maine4.74%2.60%3.50%
Utah2.42%2.63%3.21%
Virginia2.90%2.73%2.17%
West Virginia2.48%2.73%3.97%
Wisconsin3.42%2.73%3.00%
North Carolina2.28%2.78%3.32%
Hawaii2.24%2.91%6.56%
Connecticut4.21%3.03%2.46%
Kentucky1.96%3.22%3.59%
Massachusetts3.62%3.24%2.04%
California2.71%3.57%3.19%
Minnesota2.97%3.68%3.60%
Maryland2.63%3.87%2.76%
Oregon3.11%4.05%1.09%
New York4.57%4.81%3.59%

Tax Burden by State 2021