States with the Highest (and Lowest) Taxes

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5. Wyoming
> Taxes paid by residents as pct. of income: 7.8%
> Total state and local taxes collected: $3.48 billion (5th lowest)
> Pct. of total taxes paid by residents: 33.1% (2nd lowest)
> Pct. of total taxes paid by non-residents: 66.9% (2nd highest)

Wyoming is just one of two states where more than two-thirds of the total tax revenue came from non-residents. The oil and gas industry provided $1.9 billion to state coffers in fiscal 2010. The state is just one of seven that does not levy any income tax, while its 4% sales tax was significantly lower than the national median of 6%. Wyoming residents made that up in property taxes. State and local governments received $2,321 in property taxes per capita, the fourth highest in the U.S.

4. Louisiana
> Taxes paid by residents as pct. of income: 7.8%
> Total state and local taxes collected: $16.15 billion (24th highest)
> Pct. of total taxes paid by residents: 53.1% (4th lowest)
> Pct. of total taxes paid by non-residents: 46.9% (4th highest)

The tax burden on Louisiana residents fell from 8.2% in 2009 to 7.8% in 2010. Property taxes were low, at just $698 per capita. Sales taxes of 4% also ranked below the national median of 6%. While the state’s top income tax rate of 6% as high, this rate kicked in only for income above $50,000. Total income tax collections in Louisiana came to just over $500 per person in 2010, compared to a national rate of $767 per person.

Also Read: America’s Poorest States

3. Tennessee
> Taxes paid by residents as pct. of income: 7.7%
> Total state and local taxes collected: $18.24 billion (23rd highest)
> Pct. of total taxes paid by residents: 63.2% (13th lowest)
> Pct. of total taxes paid by non-residents: 36.8% (13th highest)

In Tennessee, residents paid just 7.7% of their income in taxes in 2010, the nation’s third-lowest rate. However, of the $2,707 in tax revenue per person that residents paid, just $1,844 was paid out to Tennessee, with the rest going to other states. Tennessee had a 6% personal income flat tax, although this only applied to interest and dividend income. Tennessee also did not charge any state-level property taxes, and localities’ property tax collections equaled just 2.18% of income, less than all but a half-dozen states. However, Tennessee’s combined state and local sales tax rate of 9.43% was the nation’s highest.

2. South Dakota
> Taxes paid by residents as pct. of income: 7.6%
> Total state and local taxes collected: $2.58 billion (the lowest)
> Pct. of total taxes paid by residents: 57.0% (8th lowest)
> Pct. of total taxes paid by non-residents: 43.0% (8th highest)

South Dakota collected just under $2.6 billion in taxes in 2010, less than any other state. It collected just $1,857 per resident, less than only Mississippi, Tennessee and Alabama. This is accounted for by the fact that South Dakota has no personal or corporate income tax, although the Tax Foundation noted that there is a bank franchise and bank card tax.

1. Alaska
> Taxes paid by residents as pct. of income: 7.0%
> Total state and local taxes collected: $6.17 billion (11th lowest)
> Pct. of total taxes paid by residents: 24.5% (the lowest)
> Pct. of total taxes paid by non-residents: 75.5% (the highest)

Less than a quarter of all taxes in Alaska were paid by residents, by far the lowest rate in the U.S. Oil taxes made up the vast majority of the state’s revenue collection, amounting to $6.2 billion in 2010 and $7 billion in 2011, and likely to be even higher in 2012 due to rising oil prices. Alaska was one of just seven states without an individual income tax and one of just five without a state sales tax. However, Alaska collected  $1,714 in property taxes per capita, the 10th highest of all states.

-By Michael B. Sauter, Samuel Weigley, Alexander E.M. Hess, and Brian Zajac

Click here to see how all of the states do with 24/7 Wall St.’s new interactive state tool.

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