Special Report

States With The Highest And Lowest Taxes

The nationwide effort to contain the spread of COVID-19 has taken a considerable economic toll. In recent weeks, travel has all but ground to a halt, and nonessential businesses have shuttered, causing mass layoffs and a historic unemployment crisis. The crunch has arrived at a time when many Americans are already facing financial strain — tax season.

Exactly how much of a financial burden taxes impose can depend on where one lives. While every American is subject to the same federal tax code, state and local tax laws vary dramatically by region. As a result, in some parts of the country, state and local taxes account for a larger portion of a typical resident’s income than in others.

Using data from the U.S. Census Bureau’s 2017 Census of Governments, 24/7 Wall St. reviewed the total state and local tax collections as a share of income on a per capita basis to identify the states with the lowest and highest tax burden. Federal taxes were not included in the calculation.

Every state levies some combination of property, income, and sales taxes. All told, Americans pay just over $5,000 a year in state and local taxes, equal to 9.8% of their estimated annual income. State by state, however, this share varies from as little as 7.2% of annual income to as much as 13.8%. Typically, property taxes are the largest driver of the overall tax burden within a state. These are the states with the highest (and lowest) property taxes

In light of the COVID-19 crisis, nearly every state has taken measures to ease the financial pressure of tax season. For example, the IRS has pushed the deadline for filing federal income taxes from April 15 to July 15, 2020, and most states have followed suit. This is why April 15 is usually the last day to file your taxes.

Click here to see the states where taxes are adding to the financial strain of COVID-19
Click here to read our methodology

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