As the sayings go, taxes are one of the few certainties in life, and the annual ritual of filling them with the IRS is not one that many people look forward to. The average American paid $10,845 in federal income taxes alone in 2020. But, while everyone is subject to the same federal tax laws, states also have the authority to set their own tax policy, and exactly how much you end up paying depends largely on where you live.
To raise revenue, state governments levy a broad range of taxes. These typically include taxes on property, income, and sales, and they vary considerably by state. In fact, in some parts of the country, residents are exempt from paying one or more of these tax categories altogether.
According to the Tax Foundation, an independent, nonprofit, tax policy research organization, state tax collections in 2021 totaled $4,714 per capita in New York, the ninth highest among states.
The overall tax burden in New York, which is a measure of taxes paid as a share of annual income, was 6.1% of the state’s income per capita of $76,837. For comparison, the per capita state income tax burden nationwide stands at 6.0%.
All data in this story is from the Tax Foundation report Facts & Figures 2023: How Does Your State Compare from the Tax Foundation, an independent, nonprofit, tax policy research organization. Figures do not include taxes levied at the local or federal level.
Rank | State | State tax collections per capita in fiscal 2021 ($) | Avg. annual earnings in 2022 ($) | State tax burden (%) |
---|---|---|---|---|
1 | Vermont | 6,356 | 61,882 | 10.3 |
2 | California | 6,325 | 76,614 | 8.3 |
3 | Connecticut | 6,120 | 83,294 | 7.3 |
4 | Hawaii | 5,582 | 60,947 | 9.2 |
5 | Minnesota | 5,571 | 66,280 | 8.4 |
6 | Delaware | 5,378 | 59,931 | 9.0 |
7 | Massachusetts | 5,202 | 83,653 | 6.2 |
8 | North Dakota | 5,044 | 64,524 | 7.8 |
9 | New York | 4,714 | 76,837 | 6.1 |
10 | New Jersey | 4,714 | 77,016 | 6.1 |
11 | Illinois | 4,382 | 67,244 | 6.5 |
12 | Washington | 4,214 | 73,775 | 5.7 |
13 | Oregon | 4,192 | 61,596 | 6.8 |
14 | Maryland | 4,091 | 69,817 | 5.9 |
15 | Maine | 3,973 | 58,484 | 6.8 |
16 | Rhode Island | 3,965 | 64,376 | 6.2 |
17 | Kansas | 3,958 | 58,924 | 6.7 |
18 | Indiana | 3,915 | 56,497 | 6.9 |
19 | Arkansas | 3,875 | 50,625 | 7.7 |
20 | Pennsylvania | 3,824 | 64,279 | 5.9 |
21 | Utah | 3,784 | 56,019 | 6.8 |
22 | Wisconsin | 3,782 | 59,626 | 6.3 |
23 | Virginia | 3,741 | 66,305 | 5.6 |
24 | Iowa | 3,701 | 57,163 | 6.5 |
25 | Nebraska | 3,545 | 61,205 | 5.8 |
26 | New Mexico | 3,531 | 50,311 | 7.0 |
27 | Montana | 3,514 | 56,949 | 6.2 |
28 | Michigan | 3,426 | 56,494 | 6.1 |
29 | Idaho | 3,405 | 52,369 | 6.5 |
30 | West Virginia | 3,391 | 48,488 | 7.0 |
31 | Nevada | 3,313 | 60,213 | 5.5 |
32 | North Carolina | 3,290 | 56,173 | 5.9 |
33 | Kentucky | 3,242 | 51,266 | 6.3 |
34 | Wyoming | 3,239 | 69,666 | 4.6 |
35 | Colorado | 3,238 | 70,706 | 4.6 |
36 | Mississippi | 3,171 | 45,881 | 6.9 |
37 | Ohio | 2,963 | 56,879 | 5.2 |
38 | Tennessee | 2,864 | 56,560 | 5.1 |
39 | Arizona | 2,861 | 55,487 | 5.2 |
40 | Oklahoma | 2,834 | 53,870 | 5.3 |
41 | Alabama | 2,828 | 49,769 | 5.7 |
42 | Louisiana | 2,651 | 54,217 | 4.9 |
43 | Georgia | 2,579 | 55,786 | 4.6 |
44 | South Carolina | 2,560 | 52,467 | 4.9 |
45 | Missouri | 2,447 | 55,325 | 4.4 |
46 | South Dakota | 2,401 | 64,462 | 3.7 |
47 | New Hampshire | 2,313 | 73,200 | 3.2 |
48 | Florida | 2,264 | 62,270 | 3.6 |
49 | Texas | 2,214 | 59,865 | 3.7 |
50 | Alaska | 1,438 | 65,813 | 2.2 |
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.