Hawaii carries the heaviest overall tax load in the country at roughly 13.92% of personal income, with New York close behind at 13.56%, according to 2026 data from WalletHub.1WalletHub. Tax Burden by State in 2026 But the list of states with the highest taxes shifts depending on which tax you measure. California charges the highest top income tax rate, New Jersey sends out the largest median property tax bills, and New York imposes the steepest cigarette excise tax. No single number captures the full picture, so a fair comparison has to weigh income, property, and sales and excise taxes together against what residents actually earn.
How Tax Burden Is Measured
A state’s statutory tax rate tells you what appears on a form. It does not tell you how much of your paycheck actually leaves your hands. Tax burden solves that by dividing total state and local taxes paid by residents by total personal income in the state. A state with a moderate income tax but steep property and sales taxes can end up costing more than one with a headline-grabbing top bracket. The measure captures every levy, from the income tax withheld from your wages to the sales tax rung up at the register and the property tax billed to your home.
Cost of living then decides how far your after-tax dollar goes. The Bureau of Economic Analysis publishes Regional Price Parities that compare each state’s price level to the national average.2U.S. Bureau of Economic Analysis (BEA). Regional Price Parities by State and Metro Area As of 2024, California sits at 110.7% of the national average, while Arkansas hovers at 86.9%. A 12% tax burden in an expensive state eats into your purchasing power far more than the same percentage in a low-cost one.
The Ten Highest-Tax States
WalletHub’s 2026 analysis combines property tax, individual income tax, and sales and excise tax burdens into a single percentage of personal income. The top ten:1WalletHub. Tax Burden by State in 2026
- Hawaii: 13.92% total burden (2.57% property, 4.18% income, 7.17% sales and excise)
- New York: 13.56% (4.28% property, 5.76% income, 3.52% sales and excise)
- Vermont: 11.53% (5.00% property, 3.08% income, 3.45% sales and excise)
- California: 11.00% (2.78% property, 4.87% income, 3.35% sales and excise)
- Maine: 10.64% (4.14% property, 3.02% income, 3.48% sales and excise)
- New Jersey: 10.30% (4.67% property, 2.87% income, 2.76% sales and excise)
- Illinois: 10.22% (3.81% property, 2.63% income, 3.78% sales and excise)
- Rhode Island: 10.08% (3.93% property, 2.75% income, 3.40% sales and excise)
- Maryland: 10.04% (2.63% property, 4.47% income, 2.94% sales and excise)
- Connecticut: 9.90% (3.96% property, 3.22% income, 2.72% sales and excise)
The composition varies sharply. Hawaii’s ranking is driven mostly by sales and excise taxes. New York’s comes from income and property taxes almost equally. Vermont and New Jersey lean hardest on property taxes. Which state costs you the most depends on how much you earn, what you spend, and whether you own a home.
Where Income Tax Rates Are Steepest
California imposes the highest top marginal income tax rate in the country at 13.3%, compounded by a 1.1% uncapped payroll tax that brings the effective top rate to 14.4%.3Tax Foundation. California Tax Rankings, 2026 State Tax Competitiveness Index New York’s top rate reaches 10.9% on income above $25 million, applied through a progressive system with graduated brackets. Hawaii and New Jersey also maintain double-digit top rates.
New York’s income tax starts at 4% on the first $8,500 of taxable income and steps up through several tiers. Middle-income earners typically face rates between 5.25% and 6.85%, depending on filing status and earnings. The highest rate is reserved for filers earning over $25 million. Article 22 of the New York State Tax Law governs the system.4New York State Senate. New York State Tax Law Article 22 – Personal Income Tax
New York City residents pay a separate city income tax on top of the state tax. The city rate tops out at 3.876% on income above $50,000 for single filers and $90,000 for married couples filing jointly. A high-earning New York City resident can face a combined state and city rate approaching 14.8% before federal tax enters the picture. Most cities do not impose their own income tax, and the few that do rarely push rates above 2%.
Where Property Tax Bills Are Highest
New Jersey leads the country for median annual property tax bills, with homeowners paying a median of roughly $9,400 per year. New York ranks second, with an average annual real estate tax of $7,659 against a national average of $4,334.5New York State Department of Taxation and Finance. Property Tax Illinois, Connecticut, and Vermont round out the top five for property tax as a share of income.1WalletHub. Tax Burden by State in 2026
New York does not levy property tax at the state level. Counties, cities, towns, villages, and school districts each set their own rates and conduct their own assessments, so your bill depends heavily on where you live within the state. Suburban and downstate areas, where home values run well above the national median, routinely generate annual tax bills of $10,000 to $15,000 for school and municipal obligations alone. In some affluent pockets of Long Island, combined annual taxes on a median-value home exceed $40,000.6Empire Center for Public Policy. Local New York Property Taxes Ranked by Empire Center
Property tax is a fixed obligation that persists regardless of your current income, which is why retirees on fixed incomes feel high-property-tax states most acutely. The New York Real Property Tax Law sets out how assessments are conducted and gives homeowners a framework for challenging valuations they believe are unfair.7New York State Senate. New York Real Property Tax Law If your assessed value looks out of line with comparable sales in your neighborhood, filing a grievance with your local assessor’s office is the first step, and it costs nothing.
Where Sales and Excise Taxes Hit Hardest
Hawaii’s place at the top of the overall ranking comes almost entirely from its sales and excise tax component, which claims 7.17% of personal income. Hawaii imposes a broad general excise tax on nearly all business activity, including services and transactions that most other states exempt. The result is a tax that touches almost every dollar spent on the islands.
New York’s 4% base state sales tax is moderate by national standards, but local jurisdictions pile on. In New York City, the combined rate reaches 8.875%, which includes a 0.375% Metropolitan Commuter Transportation District surcharge.8New York State Department of Taxation and Finance. Find Sales Tax Rates Combined rates elsewhere in the state vary by county.
Excise taxes on specific goods widen the gap further. New York’s cigarette excise tax of $5.35 per pack is the highest of any state.9Tax Foundation. Compare Tobacco Tax Data in Your State That rate took effect in September 2023 after a $1.00 increase, the first hike since 2010.10New York State Department of Taxation and Finance. Cigarette and Tobacco Products Tax Per-unit taxes fall harder on lower-income residents, because they consume a larger share of smaller incomes.
The No-Income-Tax States
Nine states levy no personal income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Washington does tax capital gains for certain high earners but imposes no broad-based income tax.
Moving from a high-income-tax state to Florida or Texas can save a high earner tens of thousands of dollars a year. But no-tax states make up the revenue elsewhere. Texas has some of the highest property taxes in the country. Washington’s sales tax exceeds 10% in many cities. Florida leans on tourism-related taxes that residents feel less directly but that still shape the cost of goods and services. The true comparison is never just one line on a tax form.
How High-Tax States Treat Retirement Income
Tax rankings can look different once you retire. New York does not tax Social Security benefits at the state level, putting it among the majority of states that exempt this income.11Tax Foundation. Does Your State Tax Social Security Benefits? As of 2026, only nine states still tax Social Security to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia, though West Virginia completes its phase-out on 2026 returns. Most of those states offer income-based exemptions that shield lower-income retirees.
New York also fully exempts public pensions from state income tax, including pensions from New York State and local government employers, the federal government, and the military. For private pensions, annuities, and distributions from 401(k) or 403(b) plans, New York lets residents age 59½ and older exclude up to $20,000 per person from taxable income each year. Married couples where both spouses receive pension income can each claim the $20,000 exclusion.12New York State Department of Taxation and Finance. Information for Retired Persons These exemptions soften the blow but do not eliminate it. Investment income and IRA withdrawals above the exclusion remain fully taxable.