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)StateEffective 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)
1Alaska5.67%$3,164-47.26%$4,3535
2Delaware6.11%$3,407-43.21%$3,9091
3Montana7.29%$4,066-32.23%$3,9114
4Nevada7.44%$4,145-30.90%$4,1036
5Wyoming7.45%$4,155-30.75%$4,4172
6Tennessee7.98%$4,449-25.84%$3,6673
7Idaho8.48%$4,730-21.16%$4,2167
8California8.77%$4,888-18.51%$7,16736
9Florida8.83%$4,921-17.97%$4,3739
10South Carolina9.02%$5,030-16.16%$4,27811
11Oregon9.20%$5,129-14.51%$5,67734
12Utah9.23%$5,144-14.25%$5,90210
13Colorado9.27%$5,170-13.82%$6,10013
14Alabama9.40%$5,241-12.64%$4,1778
15Arizona9.50%$5,299-11.67%$4,97712
16South Dakota9.75%$5,439-9.34%$4,75716
17North Dakota9.84%$5,488-8.53%$5,49318
18District of Columbia10.00%$5,574-7.09%$8,81146
19New Hampshire10.27%$5,725-4.57%$7,22133
20Hawaii10.33%$5,762-3.96%$8,27751
21West Virginia10.39%$5,791-3.48%$4,34319
22Louisiana10.39%$5,795-3.41%$4,75717
23Georgia10.54%$5,876-2.06%$5,23714
24North Carolina10.64%$5,934-1.09%$5,16720
25Oklahoma10.75%$5,993-0.11%$4,84815
26New Mexico10.82%$6,0310.53%$5,03823
27Virginia10.87%$6,0611.03%$7,27627
28Texas11.04%$6,1562.61%$5,34721
29Vermont11.04%$6,1582.64%$6,80041
30Missouri11.28%$6,2914.86%$5,43522
31Minnesota11.57%$6,4537.56%$7,08531
32Massachusetts11.61%$6,4707.85%$9,39045
33Washington11.68%$6,5148.57%$8,02337
34Maine11.75%$6,5549.24%$6,13342
35Indiana11.86%$6,61410.25%$5,66726
36Maryland11.96%$6,66611.12%$9,55244
37Kentucky12.06%$6,72312.06%$5,29329
38Mississippi12.21%$6,81013.51%$4,95424
39Arkansas12.30%$6,85814.32%$5,14225
40Kansas12.42%$6,92415.41%$6,10428
41Pennsylvania12.45%$6,94015.68%$6,64238
42Michigan12.81%$7,14519.09%$5,84330
43New Jersey12.87%$7,17519.59%$11,23747
44Iowa12.92%$7,20220.05%$6,35432
45Ohio13.09%$7,30021.68%$6,08135
46Wisconsin13.62%$7,59326.56%$7,19340
47Rhode Island13.69%$7,63427.26%$8,69748
48New York13.72%$7,64827.49%$9,75950
49Nebraska13.83%$7,71228.55%$6,77639
50Connecticut13.85%$7,72028.68%$10,41949
51Illinois14.89%$8,29938.34%$8,33043

*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*

Alabama1.42%2
($791)
0.29%28
($163)
2.68%28
($1,494)
5.01%39
($2,793)
9.40%
Alaska3.93%33
($2,190)
0.00%1
($0)
0.10%6
($56)
1.65%4
($918)
5.67%
Arizona2.56%16
($1,427)
0.72%38
($403)
1.57%13
($873)
4.66%35
($2,595)
9.50%
Arkansas2.08%10
($1,161)
0.43%29
($239)
2.66%27
($1,483)
7.13%50
($3,975)
12.30%
California2.62%17
($1,461)
0.28%27
($156)
1.40%11
($781)
4.47%30
($2,491)
8.77%
Colorado1.90%7
($1,058)
0.77%40
($428)
2.54%25
($1,414)
4.07%24
($2,269)
9.27%
Connecticut6.70%48
($3,733)
1.09%47
($609)
2.25%19
($1,255)
3.81%18
($2,123)
13.85%
Delaware1.81%4
($1,009)
0.00%1
($0)
3.03%33
($1,689)
1.27%3
($708)
6.11%
District of Columbia1.84%5
($1,026)
0.00%1
($0)
3.72%46
($2,072)
4.44%28
($2,475)
10.00%
Florida3.38%27
($1,885)
0.00%1
($0)
0.00%1
($0)
5.45%44
($3,037)
8.83%
Georgia3.07%25
($1,712)
0.00%1
($0)
3.17%35
($1,768)
4.30%26
($2,396)
10.54%
Hawaii0.90%1
($501)
0.00%1
($0)
3.85%47
($2,147)
5.59%46
($3,115)
10.33%
Idaho2.52%13
($1,404)
0.00%1
($0)
2.13%16
($1,185)
3.84%20
($2,141)
8.48%
Illinois7.69%50
($4,288)
0.00%1
($0)
2.82%30
($1,572)
4.37%27
($2,439)
14.89%
Indiana2.88%23
($1,606)
0.54%33
($300)
3.71%45
($2,068)
4.73%36
($2,640)
11.86%
Iowa4.95%38
($2,762)
0.43%30
($240)
3.03%34
($1,691)
4.50%31
($2,509)
12.92%
Kansas4.63%37
($2,580)
0.89%43
($495)
1.78%15
($994)
5.12%40
($2,855)
12.42%
Kentucky2.83%21
($1,579)
0.52%31
($292)
4.87%51
($2,716)
3.83%19
($2,135)
12.06%
Louisiana1.68%3
($934)
0.04%25
($24)
2.17%18
($1,212)
6.50%49
($3,624)
10.39%
Maine4.38%35
($2,444)
1.03%45
($576)
2.54%26
($1,416)
3.80%17
($2,117)
11.75%
Maryland3.64%31
($2,030)
0.00%1
($0)
4.30%49
($2,395)
4.02%23
($2,241)
11.96%
Massachusetts4.01%34
($2,238)
0.97%44
($540)
3.67%44
($2,046)
2.95%6
($1,646)
11.61%
Michigan5.66%43
($3,158)
0.25%26
($142)
3.32%37
($1,850)
3.58%11
($1,995)
12.81%
Minnesota3.86%32
($2,155)
0.56%35
($311)
2.94%32
($1,640)
4.21%25
($2,347)
11.57%
Mississippi2.64%19
($1,470)
1.46%49
($813)
2.34%21
($1,303)
5.78%47
($3,224)
12.21%
Missouri3.30%26
($1,842)
1.08%46
($600)
2.91%31
($1,625)
3.99%22
($2,224)
11.28%
Montana2.82%20
($1,570)
0.55%34
($307)
2.76%29
($1,541)
1.16%2
($646)
7.29%
Nebraska6.05%45
($3,371)
0.69%36
($383)
2.53%24
($1,410)
4.57%32
($2,548)
13.83%
Nevada2.56%15
($1,425)
0.76%39
($423)
0.53%8
($295)
3.59%12
($2,002)
7.44%
New Hampshire7.24%49
($4,038)
0.77%41
($432)
0.60%9
($335)
1.65%5
($920)
10.27%
New Jersey7.96%51
($4,437)
0.00%1
($0)
1.40%11
($781)
3.51%9
($1,957)
12.87%
New Mexico2.53%14
($1,408)
0.00%1
($0)
2.16%17
($1,204)
6.13%48
($3,419)
10.82%
New York5.48%42
($3,057)
0.00%1
($0)
3.49%40
($1,945)
4.75%37
($2,647)
13.72%
North Carolina2.84%22
($1,581)
0.54%32
($299)
3.62%43
($2,018)
3.65%15
($2,035)
10.64%
North Dakota3.49%28
($1,947)
0.00%1
($0)
0.78%10
($432)
5.58%45
($3,108)
9.84%
Ohio5.18%40
($2,890)
0.00%1
($0)
3.34%38
($1,862)
4.57%33
($2,548)
13.09%
Oklahoma2.94%24
($1,638)
0.00%1
($0)
2.44%23
($1,360)
5.37%42
($2,994)
10.75%
Oregon3.53%30
($1,970)
0.00%1
($0)
4.74%50
($2,640)
0.93%1
($519)
9.20%
Pennsylvania5.14%39
($2,867)
0.00%1
($0)
3.90%48
($2,174)
3.40%8
($1,898)
12.45%
Rhode Island5.46%41
($3,047)
2.05%51
($1,144)
2.30%20
($1,282)
3.88%21
($2,162)
13.69%
South Carolina1.89%6
($1,056)
1.17%48
($651)
2.35%22
($1,310)
3.61%14
($2,013)
9.02%
South Dakota4.39%36
($2,446)
0.00%1
($0)
0.00%1
($0)
5.37%41
($2,992)
9.75%
Tennessee2.47%12
($1,376)
0.00%1
($0)
0.10%6
($56)
5.41%43
($3,017)
7.98%
Texas6.16%46
($3,435)
0.00%1
($0)
0.00%1
($0)
4.88%38
($2,720)
11.04%
Utah2.22%11
($1,240)
0.00%1
($0)
3.35%39
($1,869)
3.65%15
($2,035)
9.23%
Vermont5.89%44
($3,285)
0.00%1
($0)
1.61%14
($896)
3.55%10
($1,977)
11.04%
Virginia2.63%18
($1,467)
1.74%50
($971)
3.49%41
($1,947)
3.00%7
($1,675)
10.87%
Washington3.52%29
($1,962)
0.00%1
($0)
0.00%1
($0)
8.16%51
($4,552)
11.68%
West Virginia1.94%8
($1,082)
0.71%37
($398)
3.29%36
($1,833)
4.44%29
($2,478)
10.39%
Wisconsin6.46%47
($3,602)
0.00%1
($0)
3.56%42
($1,985)
3.60%13
($2,006)
13.62%
Wyoming2.03%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/