NYS high taxes versus other states | Pound Ridge Real Estate

Tax season can be stressful for the millions of Americans who owe money to Uncle Sam. Every year, the average U.S. household pays more than $5,700 in federal income taxes, according to the Bureau of Labor Statistics. And while we’re all faced with that same obligation, there is significant difference when it comes to state and local taxes. Taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states.

Surprisingly, though, low income taxes don’t always mean low taxes as a whole. For example, while the state of Washington’s citizens don’t pay income tax, they still end up spending over 8% of their annual income on sales and excise taxes. Texas residents also don’t pay income tax, but spend 1.86% of their income on real estate taxes, one of the highest rates in the country. Compare these to California, where residents owe a little over 4% of their income in sales and excise taxes, and just 0.79% in real estate tax.

As this year’s tax-filing deadline, April 17, comes closer, it’s fair to wonder which states give their taxpayers more of a break. WalletHub searched for answers by comparing state and local tax rates in the 50 states and the District of Columbia against national medians. To illustrate, we calculated relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income. Scroll down for the complete ranking, commentary from a panel of tax experts and a full description of our methodology.

 

Main Findings

 

Taxes by State

Overall Rank (1=Lowest) State Effective Total State & Local Tax Rates on Median U.S. Household* Annual State & Local Taxes on Median U.S. Household* % Difference Between State & U.S. Avg.** Annual State & Local Taxes on Median State Household*** Adjusted Overall Rank (based on Cost of Living Index)
1 Alaska 5.67% $3,164 -47.26% $4,353 5
2 Delaware 6.11% $3,407 -43.21% $3,909 1
3 Montana 7.29% $4,066 -32.23% $3,911 4
4 Nevada 7.44% $4,145 -30.90% $4,103 6
5 Wyoming 7.45% $4,155 -30.75% $4,417 2
6 Tennessee 7.98% $4,449 -25.84% $3,667 3
7 Idaho 8.48% $4,730 -21.16% $4,216 7
8 California 8.77% $4,888 -18.51% $7,167 36
9 Florida 8.83% $4,921 -17.97% $4,373 9
10 South Carolina 9.02% $5,030 -16.16% $4,278 11
11 Oregon 9.20% $5,129 -14.51% $5,677 34
12 Utah 9.23% $5,144 -14.25% $5,902 10
13 Colorado 9.27% $5,170 -13.82% $6,100 13
14 Alabama 9.40% $5,241 -12.64% $4,177 8
15 Arizona 9.50% $5,299 -11.67% $4,977 12
16 South Dakota 9.75% $5,439 -9.34% $4,757 16
17 North Dakota 9.84% $5,488 -8.53% $5,493 18
18 District of Columbia 10.00% $5,574 -7.09% $8,811 46
19 New Hampshire 10.27% $5,725 -4.57% $7,221 33
20 Hawaii 10.33% $5,762 -3.96% $8,277 51
21 West Virginia 10.39% $5,791 -3.48% $4,343 19
22 Louisiana 10.39% $5,795 -3.41% $4,757 17
23 Georgia 10.54% $5,876 -2.06% $5,237 14
24 North Carolina 10.64% $5,934 -1.09% $5,167 20
25 Oklahoma 10.75% $5,993 -0.11% $4,848 15
26 New Mexico 10.82% $6,031 0.53% $5,038 23
27 Virginia 10.87% $6,061 1.03% $7,276 27
28 Texas 11.04% $6,156 2.61% $5,347 21
29 Vermont 11.04% $6,158 2.64% $6,800 41
30 Missouri 11.28% $6,291 4.86% $5,435 22
31 Minnesota 11.57% $6,453 7.56% $7,085 31
32 Massachusetts 11.61% $6,470 7.85% $9,390 45
33 Washington 11.68% $6,514 8.57% $8,023 37
34 Maine 11.75% $6,554 9.24% $6,133 42
35 Indiana 11.86% $6,614 10.25% $5,667 26
36 Maryland 11.96% $6,666 11.12% $9,552 44
37 Kentucky 12.06% $6,723 12.06% $5,293 29
38 Mississippi 12.21% $6,810 13.51% $4,954 24
39 Arkansas 12.30% $6,858 14.32% $5,142 25
40 Kansas 12.42% $6,924 15.41% $6,104 28
41 Pennsylvania 12.45% $6,940 15.68% $6,642 38
42 Michigan 12.81% $7,145 19.09% $5,843 30
43 New Jersey 12.87% $7,175 19.59% $11,237 47
44 Iowa 12.92% $7,202 20.05% $6,354 32
45 Ohio 13.09% $7,300 21.68% $6,081 35
46 Wisconsin 13.62% $7,593 26.56% $7,193 40
47 Rhode Island 13.69% $7,634 27.26% $8,697 48
48 New York 13.72% $7,648 27.49% $9,759 50
49 Nebraska 13.83% $7,712 28.55% $6,776 39
50 Connecticut 13.85% $7,720 28.68% $10,419 49
51 Illinois 14.89% $8,299 38.34% $8,330 43

*Assumes “Median U.S. Household” has an annual income of $55,754 (mean third quintile U.S. income); owns a home valued at $184,700 (median U.S. home value); owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median U.S. income.
**National Average of State and Local Tax Rates = 10.78%
***Assumes “Median State Household” has an annual income equal to the mean third quintile income of the state; owns a home at a value equal to the median of the state; owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median state income.

Artwork-Best-&-Worst-States-to-be-a-Taxpayer-2018-v1

Red States vs. Blue States

 

State & Local Tax Breakdown

All effective tax rates shown below were calculated as a percentage of the mean third quintile U.S. income of $55,754 and based on the characteristics of the Median U.S. Household*.

State

Effective Real-Estate Tax Rate

Real-Estate Tax Rank ($)

Effective Vehicle Property Tax Rate

Vehicle Property Tax Rank ($)

Effective Income Tax Rate

Income Tax Rank ($)

Effective Sales & Excise Tax Rate

Sales & Excise Tax Rank ($)

Effective Total State & Local Tax Rates on Median U.S. Household*

Alabama 1.42% 2
($791)
0.29% 28
($163)
2.68% 28
($1,494)
5.01% 39
($2,793)
9.40%
Alaska 3.93% 33
($2,190)
0.00% 1
($0)
0.10% 6
($56)
1.65% 4
($918)
5.67%
Arizona 2.56% 16
($1,427)
0.72% 38
($403)
1.57% 13
($873)
4.66% 35
($2,595)
9.50%
Arkansas 2.08% 10
($1,161)
0.43% 29
($239)
2.66% 27
($1,483)
7.13% 50
($3,975)
12.30%
California 2.62% 17
($1,461)
0.28% 27
($156)
1.40% 11
($781)
4.47% 30
($2,491)
8.77%
Colorado 1.90% 7
($1,058)
0.77% 40
($428)
2.54% 25
($1,414)
4.07% 24
($2,269)
9.27%
Connecticut 6.70% 48
($3,733)
1.09% 47
($609)
2.25% 19
($1,255)
3.81% 18
($2,123)
13.85%
Delaware 1.81% 4
($1,009)
0.00% 1
($0)
3.03% 33
($1,689)
1.27% 3
($708)
6.11%
District of Columbia 1.84% 5
($1,026)
0.00% 1
($0)
3.72% 46
($2,072)
4.44% 28
($2,475)
10.00%
Florida 3.38% 27
($1,885)
0.00% 1
($0)
0.00% 1
($0)
5.45% 44
($3,037)
8.83%
Georgia 3.07% 25
($1,712)
0.00% 1
($0)
3.17% 35
($1,768)
4.30% 26
($2,396)
10.54%
Hawaii 0.90% 1
($501)
0.00% 1
($0)
3.85% 47
($2,147)
5.59% 46
($3,115)
10.33%
Idaho 2.52% 13
($1,404)
0.00% 1
($0)
2.13% 16
($1,185)
3.84% 20
($2,141)
8.48%
Illinois 7.69% 50
($4,288)
0.00% 1
($0)
2.82% 30
($1,572)
4.37% 27
($2,439)
14.89%
Indiana 2.88% 23
($1,606)
0.54% 33
($300)
3.71% 45
($2,068)
4.73% 36
($2,640)
11.86%
Iowa 4.95% 38
($2,762)
0.43% 30
($240)
3.03% 34
($1,691)
4.50% 31
($2,509)
12.92%
Kansas 4.63% 37
($2,580)
0.89% 43
($495)
1.78% 15
($994)
5.12% 40
($2,855)
12.42%
Kentucky 2.83% 21
($1,579)
0.52% 31
($292)
4.87% 51
($2,716)
3.83% 19
($2,135)
12.06%
Louisiana 1.68% 3
($934)
0.04% 25
($24)
2.17% 18
($1,212)
6.50% 49
($3,624)
10.39%
Maine 4.38% 35
($2,444)
1.03% 45
($576)
2.54% 26
($1,416)
3.80% 17
($2,117)
11.75%
Maryland 3.64% 31
($2,030)
0.00% 1
($0)
4.30% 49
($2,395)
4.02% 23
($2,241)
11.96%
Massachusetts 4.01% 34
($2,238)
0.97% 44
($540)
3.67% 44
($2,046)
2.95% 6
($1,646)
11.61%
Michigan 5.66% 43
($3,158)
0.25% 26
($142)
3.32% 37
($1,850)
3.58% 11
($1,995)
12.81%
Minnesota 3.86% 32
($2,155)
0.56% 35
($311)
2.94% 32
($1,640)
4.21% 25
($2,347)
11.57%
Mississippi 2.64% 19
($1,470)
1.46% 49
($813)
2.34% 21
($1,303)
5.78% 47
($3,224)
12.21%
Missouri 3.30% 26
($1,842)
1.08% 46
($600)
2.91% 31
($1,625)
3.99% 22
($2,224)
11.28%
Montana 2.82% 20
($1,570)
0.55% 34
($307)
2.76% 29
($1,541)
1.16% 2
($646)
7.29%
Nebraska 6.05% 45
($3,371)
0.69% 36
($383)
2.53% 24
($1,410)
4.57% 32
($2,548)
13.83%
Nevada 2.56% 15
($1,425)
0.76% 39
($423)
0.53% 8
($295)
3.59% 12
($2,002)
7.44%
New Hampshire 7.24% 49
($4,038)
0.77% 41
($432)
0.60% 9
($335)
1.65% 5
($920)
10.27%
New Jersey 7.96% 51
($4,437)
0.00% 1
($0)
1.40% 11
($781)
3.51% 9
($1,957)
12.87%
New Mexico 2.53% 14
($1,408)
0.00% 1
($0)
2.16% 17
($1,204)
6.13% 48
($3,419)
10.82%
New York 5.48% 42
($3,057)
0.00% 1
($0)
3.49% 40
($1,945)
4.75% 37
($2,647)
13.72%
North Carolina 2.84% 22
($1,581)
0.54% 32
($299)
3.62% 43
($2,018)
3.65% 15
($2,035)
10.64%
North Dakota 3.49% 28
($1,947)
0.00% 1
($0)
0.78% 10
($432)
5.58% 45
($3,108)
9.84%
Ohio 5.18% 40
($2,890)
0.00% 1
($0)
3.34% 38
($1,862)
4.57% 33
($2,548)
13.09%
Oklahoma 2.94% 24
($1,638)
0.00% 1
($0)
2.44% 23
($1,360)
5.37% 42
($2,994)
10.75%
Oregon 3.53% 30
($1,970)
0.00% 1
($0)
4.74% 50
($2,640)
0.93% 1
($519)
9.20%
Pennsylvania 5.14% 39
($2,867)
0.00% 1
($0)
3.90% 48
($2,174)
3.40% 8
($1,898)
12.45%
Rhode Island 5.46% 41
($3,047)
2.05% 51
($1,144)
2.30% 20
($1,282)
3.88% 21
($2,162)
13.69%
South Carolina 1.89% 6
($1,056)
1.17% 48
($651)
2.35% 22
($1,310)
3.61% 14
($2,013)
9.02%
South Dakota 4.39% 36
($2,446)
0.00% 1
($0)
0.00% 1
($0)
5.37% 41
($2,992)
9.75%
Tennessee 2.47% 12
($1,376)
0.00% 1
($0)
0.10% 6
($56)
5.41% 43
($3,017)
7.98%
Texas 6.16% 46
($3,435)
0.00% 1
($0)
0.00% 1
($0)
4.88% 38
($2,720)
11.04%
Utah 2.22% 11
($1,240)
0.00% 1
($0)
3.35% 39
($1,869)
3.65% 15
($2,035)
9.23%
Vermont 5.89% 44
($3,285)
0.00% 1
($0)
1.61% 14
($896)
3.55% 10
($1,977)
11.04%
Virginia 2.63% 18
($1,467)
1.74% 50
($971)
3.49% 41
($1,947)
3.00% 7
($1,675)
10.87%
Washington 3.52% 29
($1,962)
0.00% 1
($0)
0.00% 1
($0)
8.16% 51
($4,552)
11.68%
West Virginia 1.94% 8
($1,082)
0.71% 37
($398)
3.29% 36
($1,833)
4.44% 29
($2,478)
10.39%
Wisconsin 6.46% 47
($3,602)
0.00% 1
($0)
3.56% 42
($1,985)
3.60% 13
($2,006)
13.62%
Wyoming 2.03% 9
($1,130)
0.77% 41
($432)
0.00% 1
($0)
4.65% 34
($2,593)
7.45%

*Assumes “Median U.S. Household” has an income equal to $55,754 (mean third quintile U.S. income); owns a home valued at $184,700 (median U.S. home value); owns a car valued at $24,000 (the highest-selling car of 2017); and spends annually an amount equal to the spending of a household earning the median U.S. income.

 

Ask the Experts: Best Tax Advice

For more insight into the impact state and local taxes have on migration and public policy, we turned to a panel of leading tax and policy experts. You can check out their bios and responses below.

  1. Do people usually consider taxes when deciding where to live? Should they?
  2. How can state and local tax policy be used to attract new residents and stimulate growth?
  3. Which states have particularly complicated tax rules for families?
  4. How has the total amount families pay in state and local taxes changed as a result of the new tax code?
  5. Which states have the best mix of taxes and government services?
  6. Should people pay taxes based on where they live or where they work?

read more…

 

https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/