Introduction
Tax burden refers to the total amount of taxes paid by individuals and businesses in a particular jurisdiction. It encompasses various taxes, including income taxes, sales taxes, property taxes, and other state and local levies. The tax burden can vary significantly from state to state due to variations in tax policies, rates, exemptions, and the overall structure of the tax system.
The differences in tax burden among states can have a profound impact on the economic well-being of individuals and the competitiveness of businesses. States with high tax burdens may face challenges in attracting and retaining businesses and residents, while states with lower tax burdens can provide a more favorable environment for economic growth and prosperity.
Factors that contribute to variations in tax burden include the reliance on different tax revenue sources, such as income taxes versus sales taxes, the progressivity or regressivity of tax rates, and the presence or absence of certain tax incentives or deductions. Additionally, differences in the cost of living, government spending priorities, and demographic factors can also influence the overall tax burden experienced by individuals and businesses.
Total Tax Burden by State
| # | State | State-Local Tax Burden | Annual Taxes | Property Tax Rate | Corporate Tax Rate |
|---|---|---|---|---|---|
| 1 | New York | 15.9% | $9,111 | 1.3% | 7.3% |
| 2 | Connecticut | 15.4% | $7,490 | 1.73% | 7.5% |
| 3 | Hawaii | 14.1% | $9,996 | 0.31% | 6.4% |
| 4 | Vermont | 13.6% | $6,409 | 1.76% | 8.5% |
| 5 | California | 13.5% | $9,054 | 0.7% | 8.8% |
| 6 | New Jersey | 13.2% | $8,330 | 2.13% | 11.5% |
| 7 | Illinois | 12.9% | $7,141 | 1.97% | 9.5% |
| 8 | Virginia | 12.5% | $7,951 | 0.84% | 6% |
| 9 | Delaware | 12.4% | $7,195 | 0.59% | 8.7% |
| 10 | Maine | 12.4% | $7,697 | 1.2% | 8.9% |
| 11 | Minnesota | 12.1% | $7,656 | 1.05% | 9.8% |
| 12 | Utah | 12.1% | $6,674 | 0.56% | 4.9% |
| 13 | District of Columbia | 12% | $9,839 | 8.3% | |
| 14 | Massachusetts | 11.5% | $8,626 | 1.08% | 8% |
| 15 | Nebraska | 11.5% | $7,177 | 1.54% | 7.3% |
| 16 | Rhode Island | 11.4% | $6,552 | 1.37% | 7% |
| 17 | Maryland | 11.3% | $7,677 | 1.01% | 8.3% |
| 18 | Iowa | 11.2% | $6,799 | 1.43% | 8.4% |
| 19 | Kansas | 11.2% | $6,695 | 1.28% | 7% |
| 20 | Wisconsin | 10.9% | $6,568 | 1.53% | 7.9% |
| 21 | Oregon | 10.8% | $9,213 | 0.91% | 7.6% |
| 22 | Idaho | 10.7% | $6,872 | 0.65% | 5.8% |
| 23 | Washington | 10.7% | $5,381 | 0.84% | 0% |
| 24 | Pennsylvania | 10.6% | $5,903 | 1.43% | 9% |
| 25 | Montana | 10.5% | $7,078 | 0.74% | 6.8% |
| 26 | Arkansas | 10.2% | $6,419 | 0.61% | 5.3% |
| 27 | New Mexico | 10.2% | $6,370 | 0.59% | 5.9% |
| 28 | Ohio | 10% | $5,426 | 1.52% | 0% |
| 29 | North Carolina | 9.9% | $6,846 | 0.78% | 2.5% |
| 30 | Alabama | 9.8% | $6,271 | 0.37% | 6.5% |
| 31 | Mississippi | 9.8% | $6,172 | 0.63% | 5% |
| 32 | West Virginia | 9.8% | $5,931 | 0.53% | 6.5% |
| 33 | Colorado | 9.7% | $7,372 | 0.52% | 4.6% |
| 34 | Kentucky | 9.6% | $6,092 | 0.78% | 5% |
| 35 | Nevada | 9.6% | $4,713 | 0.56% | 0% |
| 36 | New Hampshire | 9.6% | $5,025 | 1.89% | 7.5% |
| 37 | Arizona | 9.5% | $6,268 | 0.6% | 4.9% |
| 38 | Indiana | 9.3% | $5,643 | 0.81% | 4.9% |
| 39 | Missouri | 9.3% | $6,558 | 0.96% | 4% |
| 40 | Florida | 9.1% | $5,002 | 0.86% | 5.5% |
| 41 | Louisiana | 9.1% | $6,029 | 0.51% | 7.5% |
| 42 | Oklahoma | 9% | $6,206 | 0.83% | 4% |
| 43 | Georgia | 8.9% | $7,227 | 0.87% | 5.8% |
| 44 | South Carolina | 8.9% | $7,613 | 0.53% | 5% |
| 45 | North Dakota | 8.8% | $4,812 | 0.88% | 4.3% |
| 46 | Michigan | 8.6% | $6,193 | 1.53% | 6% |
| 47 | Texas | 8.6% | $4,761 | 1.6% | 0% |
| 48 | South Dakota | 8.4% | $4,310 | 1.14% | 0% |
| 49 | Tennessee | 7.6% | $4,483 | 0.63% | 6.5% |
| 50 | Wyoming | 7.5% | $4,425 | 0.51% | 0% |
| 51 | Alaska | 4.6% | $4,853 | 0.98% | 9.4% |
Lowest Tax Burden States
The ten states with the lowest tax burdens are Alaska, Wyoming, Tennessee, South Dakota, Michigan, Texas, North Dakota, Georgia, South Carolina, and Oklahoma. Alaska holds the first position with a state-local tax burden of 4.60%, making it the state with the lowest tax burden in the nation. Wyoming closely follows in second place with a tax burden of 7.50%. Tennessee and South Dakota share the third and fourth positions with tax burdens of 7.60% and 8.40%, respectively. Michigan and Texas tie for the fifth and sixth spots, both with a tax burden of 8.60%. North Dakota, Georgia, South Carolina, and Oklahoma complete the list with tax burdens of 8.80%, 8.90%, 8.90%, and 9%, respectively.
The ten lowest tax burden states are:
1. Alaska – 4.60%
2. Wyoming – 7.50%
3. Tennessee – 7.60%
4. South Dakota – 8.40%
5. Michigan – 8.60%
6. Texas – 8.60%
7. North Dakota – 8.80%
8. Georgia – 8.90%
9. South Carolina – 8.90%
10. Oklahoma – 9%
States With Highest Tax Burden
The ten states with the highest tax burdens are New York, Connecticut, Hawaii, Vermont, California, New Jersey, Illinois, Virginia, Delaware, and Maine. Among the states with the highest tax burden, New York tops the list with a state-local tax burden at 15.90%. Following closely is Connecticut at 15.40%, while Hawaii ranks third with a tax burden of 14.10%. Vermont takes the fourth spot with a tax burden of 13.60%, while California closely trails at 13.50%. New Jersey follows at the sixth position with a tax burden of 13.20%. Illinois, with a tax burden of 12.90%, is seventh on the list, while Virginia ranks eighth with a tax burden of 12.50%. Delaware and Maine tie for the ninth and tenth positions, both with a tax burden of 12.40%. These states exhibit the highest tax burdens in the country, and individuals and businesses in these states face significant tax obligations.
The ten highest tax burden states are:
1. New York – 15.90%
2. Connecticut – 15.40%
3. Hawaii – 14.10%
4. Vermont – 13.60%
5. California – 13.50%
6. New Jersey – 13.20%
7. Illinois – 12.90%
8. Virginia – 12.50%
9. Delaware – 12.40%
10. Maine – 12.40%
Overall Tax Burden by State
Alabama
Ranked in the US
#30
Annual Taxes
$6,271
Ranked in the US
#31
0.37%
Ranked in the US
#49
Ranked in the US
#24
Alaska
Ranked in the US
#51
Annual Taxes
$4,853
Ranked in the US
#45
0.98%
Ranked in the US
#21
Ranked in the US
#4
Topping the list with the lowest state-local tax burden is Alaska, with a tax burden at 4.60%. Known for its abundance of natural resources, Alaska relies heavily on revenue from oil and gas, allowing it to impose significantly lower taxes on its residents and businesses compared to other states.
Arizona
Ranked in the US
#37
Annual Taxes
$6,268
Ranked in the US
#32
Ranked in the US
#39
Ranked in the US
#38
Arkansas
Ranked in the US
#26
Annual Taxes
$6,419
Ranked in the US
#28
0.61%
Ranked in the US
#38
Ranked in the US
#34
California
Ranked in the US
#5
Annual Taxes
$9,054
Ranked in the US
#5
Ranked in the US
#34
Ranked in the US
#7
California carries a tax burden of 13.50%, making it the fifth state with the highest tax burden in the US.The state imposes income taxes on individuals and corporations, alongside sales and property taxes. California's tax policies aim to fund a wide range of public services, including education, healthcare, and infrastructure, while supporting economic innovation.
Colorado
Ranked in the US
#33
Annual Taxes
$7,372
Ranked in the US
#14
0.52%
Ranked in the US
#46
Ranked in the US
#41
Connecticut
Ranked in the US
#2
Annual Taxes
$7,490
Ranked in the US
#13
1.73%
Ranked in the US
#5
Ranked in the US
#16
Connecticut has the second highest tax burden in the US, with a tax burden at 15.40%. The state imposes income taxes on individuals and corporations, alongside sales and property taxes. Connecticut's tax structure aims to generate revenue for public services, education, infrastructure, and healthcare while addressing budgetary challenges.
Delaware
Ranked in the US
#9
Annual Taxes
$7,195
Ranked in the US
#16
0.59%
Ranked in the US
#40
Ranked in the US
#8
Delaware carries a tax burden of 12.40%, making it the tenth state with the highest tax burden in the US. The state does not levy a sales tax but imposes income taxes on individuals and corporations. Delaware's tax structure aims to attract businesses through its favorable corporate tax environment while generating revenue for public services.
District of Columbia
Ranked in the US
#13
Annual Taxes
$9,839
Ranked in the US
#2
Ranked in the US
#11
Florida
Ranked in the US
#40
Annual Taxes
$5,002
Ranked in the US
#44
0.86%
Ranked in the US
#26
Ranked in the US
#33
Georgia
Ranked in the US
#43
Annual Taxes
$7,227
Ranked in the US
#15
0.87%
Ranked in the US
#25
Ranked in the US
#31
With a tax burden just shy of 8.90%, Georgia secures the eighth position for states with the lowest tax burden. Georgia imposes income taxes on residents and corporations, along with sales and property taxes. The state's balanced tax system seeks to support economic growth while funding essential services.
Hawaii
Ranked in the US
#3
Annual Taxes
$9,996
Ranked in the US
#1
0.31%
Ranked in the US
#50
Ranked in the US
#27
Hawaii carries a tax burden of 14.10%, making it the third state with the highest tax burden in the US. The state imposes income taxes on individuals and businesses, alongside sales and property taxes. Hawaii's tax policies aim to fund public services, education, healthcare, and tourism-related initiatives.
Idaho
Ranked in the US
#22
Annual Taxes
$6,872
Ranked in the US
#20
0.65%
Ranked in the US
#35
Ranked in the US
#32
Illinois
Ranked in the US
#7
Annual Taxes
$7,141
Ranked in the US
#18
1.97%
Ranked in the US
#2
Ranked in the US
#3
Illinois carries a tax burden of 12.90%, making it the seventh state with the highest tax burden in the US. The state imposes income taxes on individuals and corporations, alongside sales and property taxes. Illinois' tax policies aim to fund public services, education, and infrastructure while addressing budgetary challenges.
Indiana
Ranked in the US
#38
Annual Taxes
$5,643
Ranked in the US
#40
0.81%
Ranked in the US
#30
Ranked in the US
#39
Iowa
Ranked in the US
#18
Annual Taxes
$6,799
Ranked in the US
#22
1.43%
Ranked in the US
#11
Ranked in the US
#10
Kansas
Ranked in the US
#19
Annual Taxes
$6,695
Ranked in the US
#23
1.28%
Ranked in the US
#15
Ranked in the US
#21
Kentucky
Ranked in the US
#34
Annual Taxes
$6,092
Ranked in the US
#36
0.78%
Ranked in the US
#31
Ranked in the US
#35
Louisiana
Ranked in the US
#41
Annual Taxes
$6,029
Ranked in the US
#37
0.51%
Ranked in the US
#47
Ranked in the US
#17
Maine
Ranked in the US
#10
Annual Taxes
$7,697
Ranked in the US
#9
Ranked in the US
#16
Ranked in the US
#6
Maine carries a tax burden of 12.40%, making it the ninth state with the highest tax burden in the US. The state imposes income taxes on residents and businesses, alongside sales and property taxes. Maine's tax policies aim to fund public services, healthcare, education, and infrastructure while supporting economic development.
Maryland
Ranked in the US
#17
Annual Taxes
$7,677
Ranked in the US
#10
1.01%
Ranked in the US
#20
Ranked in the US
#12
Massachusetts
Ranked in the US
#14
Annual Taxes
$8,626
Ranked in the US
#6
1.08%
Ranked in the US
#18
Ranked in the US
#13
Michigan
Ranked in the US
#46
Annual Taxes
$6,193
Ranked in the US
#34
1.53%
Ranked in the US
#8
Ranked in the US
#28
Michigan secures the fifth position for states with the lowest tax burdens, with a moderate state-local tax burden at 8.60%. The state relies on various taxes, including income, sales, and property taxes. While not the lowest tax burden, Michigan's tax policies aim to strike a balance between revenue generation and supporting economic growth.
Minnesota
Ranked in the US
#11
Annual Taxes
$7,656
Ranked in the US
#11
1.05%
Ranked in the US
#19
Ranked in the US
#2
Mississippi
Ranked in the US
#31
Annual Taxes
$6,172
Ranked in the US
#35
0.63%
Ranked in the US
#36
Ranked in the US
#36
Missouri
Ranked in the US
#39
Annual Taxes
$6,558
Ranked in the US
#26
0.96%
Ranked in the US
#22
Ranked in the US
#43
Montana
Ranked in the US
#25
Annual Taxes
$7,078
Ranked in the US
#19
0.74%
Ranked in the US
#33
Ranked in the US
#23
Nebraska
Ranked in the US
#15
Annual Taxes
$7,177
Ranked in the US
#17
1.54%
Ranked in the US
#7
Ranked in the US
#19
Nevada
Ranked in the US
#35
Annual Taxes
$4,713
Ranked in the US
#48
0.56%
Ranked in the US
#42
Ranked in the US
#46
New Hampshire
Ranked in the US
#36
Annual Taxes
$5,025
Ranked in the US
#43
1.89%
Ranked in the US
#3
Ranked in the US
#18
New Jersey
Ranked in the US
#6
Annual Taxes
$8,330
Ranked in the US
#7
2.13%
Ranked in the US
#1
11.5%
Ranked in the US
#1
New Jersey carries a tax burden of 13.20%, making it the sixth state with the highest tax burden in the US. The state imposes income taxes on residents and businesses, alongside sales and property taxes. New Jersey's tax structure aims to generate revenue for public services, education, and infrastructure while managing fiscal responsibilities.
New Mexico
Ranked in the US
#27
Annual Taxes
$6,370
Ranked in the US
#30
0.59%
Ranked in the US
#41
Ranked in the US
#30
New York
Ranked in the US
#1
Annual Taxes
$9,111
Ranked in the US
#4
Ranked in the US
#14
Ranked in the US
#20
New York carries the highest tax burden among all states (15.90%). The state imposes income taxes on individuals and businesses, alongside sales and property taxes. New York's tax policies aim to fund a wide range of public services, education, healthcare, transportation, and social programs.
North Carolina
Ranked in the US
#29
Annual Taxes
$6,846
Ranked in the US
#21
0.78%
Ranked in the US
#32
Ranked in the US
#45
North Dakota
Ranked in the US
#45
Annual Taxes
$4,812
Ranked in the US
#46
0.88%
Ranked in the US
#24
Ranked in the US
#42
North Dakota has a tax burden at 8.80%. The state benefits from its robust energy sector, particularly oil production, which helps offset the need for higher taxes. Nevertheless, North Dakota maintains a relatively favorable tax climate compared to many other states.
Ohio
Ranked in the US
#28
Annual Taxes
$5,426
Ranked in the US
#41
1.52%
Ranked in the US
#10
Ranked in the US
#47
Oklahoma
Ranked in the US
#42
Annual Taxes
$6,206
Ranked in the US
#33
0.83%
Ranked in the US
#29
Ranked in the US
#44
Oklahoma rounds up the top ten states with the lowest tax burdens, with a 9% state-local tax burden. The state imposes income taxes on residents and corporations, alongside sales and property taxes. Oklahoma's tax policies aim to support infrastructure and public services while encouraging economic growth.
Oregon
Ranked in the US
#21
Annual Taxes
$9,213
Ranked in the US
#3
0.91%
Ranked in the US
#23
Ranked in the US
#15
Pennsylvania
Ranked in the US
#24
Annual Taxes
$5,903
Ranked in the US
#39
1.43%
Ranked in the US
#12
Ranked in the US
#5
Rhode Island
Ranked in the US
#16
Annual Taxes
$6,552
Ranked in the US
#27
1.37%
Ranked in the US
#13
Ranked in the US
#22
South Carolina
Ranked in the US
#44
Annual Taxes
$7,613
Ranked in the US
#12
0.53%
Ranked in the US
#44
Ranked in the US
#37
South Carolina matches Georgia's tax burden (8.90%), ranking ninth lowest tax burden in the US overall. The state levies income taxes on individuals and businesses while relying on sales and property taxes to generate revenue. South Carolina aims to maintain a competitive tax environment to attract businesses and foster economic development.
South Dakota
Ranked in the US
#48
Annual Taxes
$4,310
Ranked in the US
#51
1.14%
Ranked in the US
#17
Ranked in the US
#48
South Dakota stands out with its relatively low tax burden of 8.40%, earning the fourth spot for states with the lowest tax burdens. The state does not levy personal or corporate income taxes, relying heavily on sales and use taxes instead. This approach contributes to South Dakota's attractive tax climate.
Tennessee
Ranked in the US
#49
Annual Taxes
$4,483
Ranked in the US
#49
0.63%
Ranked in the US
#37
Ranked in the US
#25
Tennessee ranks third in terms of states with the lowest tax burden, with a tax burden at 7.60%, primarily due to its unique tax structure. The state does not levy an income tax on wages, but it imposes a sales tax on most goods and services. This combination results in a lower overall tax burden for Tennessee residents.
Texas
Ranked in the US
#47
Annual Taxes
$4,761
Ranked in the US
#47
Ranked in the US
#6
Ranked in the US
#49
Sharing the same tax burden percentage as Michigan (8.60%), Texas ranks sixth state with the lowest tax burden. Texas is known for its business-friendly environment, thanks in part to its lack of personal income tax. However, the state relies heavily on sales and property taxes to fund public services and infrastructure.
Utah
Ranked in the US
#12
Annual Taxes
$6,674
Ranked in the US
#24
0.56%
Ranked in the US
#43
Ranked in the US
#40
Vermont
Ranked in the US
#4
Annual Taxes
$6,409
Ranked in the US
#29
1.76%
Ranked in the US
#4
Ranked in the US
#9
Vermont carries a tax burden of 13.60%, making it the fourth state with the highest tax burden in the US. The state imposes income taxes on individuals and businesses, alongside sales and property taxes. Vermont's tax structure aims to generate revenue for public services, education, and healthcare while supporting sustainable development and environmental conservation.
Virginia
Ranked in the US
#8
Annual Taxes
$7,951
Ranked in the US
#8
0.84%
Ranked in the US
#27
Ranked in the US
#29
Virginia carries a tax burden of 12.50%, making it the eighth state with the highest tax burden in the US. The state imposes income taxes on individuals and businesses, alongside sales and property taxes. Virginia's tax structure aims to provide funding for public services, transportation, and education while maintaining a competitive business environment.
Washington
Ranked in the US
#23
Annual Taxes
$5,381
Ranked in the US
#42
0.84%
Ranked in the US
#28
Ranked in the US
#50
West Virginia
Ranked in the US
#32
Annual Taxes
$5,931
Ranked in the US
#38
0.53%
Ranked in the US
#45
Ranked in the US
#26
Wisconsin
Ranked in the US
#20
Annual Taxes
$6,568
Ranked in the US
#25
1.53%
Ranked in the US
#9
Ranked in the US
#14
Wyoming
Ranked in the US
#50
Annual Taxes
$4,425
Ranked in the US
#50
0.51%
Ranked in the US
#48
Ranked in the US
#51
Wyoming secures the second spot with a relatively low state-local tax burden of 7.50%. The state's economy benefits from its vast energy reserves, including coal, natural gas, and oil. These resources contribute to Wyoming's ability to maintain a favorable tax environment for its residents.
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