States With the Worst Taxes: Income, Property, and Sales

The states with the worst taxes, measured by total state and local tax burden, are New York, New Jersey, California, Connecticut, and Maryland, in that order, according to the Tax Foundation’s 2026 State Tax Competitiveness Index.¹ But the “worst” state depends on how you earn, what you own, and what you buy. A state with no income tax can still punish you on property or sales taxes, and a state with a middling headline rate can rank near the bottom by piling mediocre-to-high rates across every category at once. The differences are large enough to cost a household thousands of dollars a year.

What “Worst” Actually Measures

A tax rate and a tax burden are not the same thing. The rate is the percentage written into law for one specific tax. The burden is the share of your total income that ends up with state and local governments after you add up income taxes, property taxes, sales taxes, excise taxes, and everything else. A state with a modest income tax rate can still hit hard if it pairs that rate with steep property assessments and high sales taxes.

Economists calculate burden by dividing all state and local tax revenue collected from residents by total personal income earned in that state. New York’s burden comes out to roughly 15.9 percent of personal income, the highest in the country.² That single figure captures the combined weight of every tax the state and its localities impose, which makes it more useful than any individual rate.

The Five Worst States Overall

The 2026 Index evaluates each state across five categories: corporate taxes, individual income taxes, sales taxes, property taxes, and unemployment insurance taxes. The five worst-ranked states are:

New York (50th). High income tax rates, heavy property taxes, and a tax-benefit recapture provision that eventually applies the top rate to all income for the highest earners.
New Jersey (49th). The nation’s highest property taxes paired with a top individual income tax rate of 10.75 percent and a steep corporate tax.
California (48th). The country’s highest top marginal income tax rate at 13.3 percent, plus aggressive taxation of businesses.
Connecticut (47th). High property taxes, a top income tax rate of 6.99 percent, and an estate tax that adds to the overall weight.
Maryland (46th). A layered system of state and county income taxes, an estate tax, and an inheritance tax on the same estate.

These rankings reflect how the whole tax code interacts. A state can land near the bottom without holding the single highest rate in any category.¹

Where Income Taxes Hit Hardest

California’s top marginal individual income tax rate is 13.3 percent, the highest in the country. That rate kicks in on income above $1 million and includes a 1 percent surcharge originally established by the Mental Health Services Act of 2004. Factor in a 1.3 percent payroll tax on wages with no income cap, and the all-in top rate on wage income reaches 14.6 percent.³

Hawaii follows at 11 percent on income above $200,000 for single filers. New York’s top rate of 10.9 percent applies to income over $25 million, and New York is one of only two states that recapture the benefit of lower brackets so the top rate eventually hits all of a high earner’s income.⁴ New Jersey rounds out the top tier at 10.75 percent on income over $1 million.³

Where your income actually falls in the brackets matters. If you earn $80,000, California’s effective rate on that income is far lower than 13.3 percent because only the dollars inside each bracket are taxed at that bracket’s rate. Business owners, freelancers, and high-income professionals feel these top rates most.

The Remote Work Trap

Seven states enforce the “convenience of the employer” rule, which can tax your income even if you never set foot in the state. If your employer is based there and you work remotely from somewhere else, that state assumes you’re working from home for your own convenience and claims the right to tax the income. The states enforcing this rule are New York, Pennsylvania, Delaware, Connecticut, Nebraska, Arkansas, and Massachusetts.

New York is the most aggressive, with a very limited necessity exception and a high audit risk for remote workers. To avoid the tax, your employer generally has to prove remote work was required for business reasons rather than permitted as a perk, and the burden of proof falls on the employer. If your company doesn’t maintain proper documentation, you could owe income tax to a state you’ve never visited.

Where Property Taxes Hit Hardest

Property taxes work differently than income taxes because they’re based on what you own rather than what you earn. That creates real pressure for retirees and people on fixed incomes who may own a valuable home but have modest cash flow.

New Jersey leads the country with an effective property tax rate of about 2.1 percent of home value.⁵ The average New Jersey homeowner paid $10,340 in property taxes in 2025, with some northern counties averaging well above $12,000. Illinois follows at an effective rate near 1.9 percent, and individual counties in the Chicago metro area push above 2 percent. Connecticut rounds out the top three. Vermont and New Hampshire also rank among the highest when property tax collections are measured as a share of personal income, which captures the burden on residents even where home values are lower than on the coasts.¹

Where Sales and Gas Taxes Hit Hardest

Louisiana has the highest average combined state and local sales tax rate in the country at 10.11 percent, with some local jurisdictions pushing the combined rate as high as 12.75 percent.⁶ Tennessee is second at 9.61 percent combined, built on a 7 percent state rate with local governments adding up to 2.75 percent. Washington ranks third at 9.51 percent combined. Arkansas and Alabama tie for fourth at 9.46 percent each.⁷

Sales taxes are widely considered regressive because they take a larger bite out of lower incomes. A household earning $40,000 that spends most of its income on taxable goods loses a much bigger share to sales tax than a household earning $200,000 that saves or invests a significant portion. Some states soften this by exempting groceries or prescription drugs, but the impact on daily spending remains substantial in high-rate states.

Gas taxes hit every driver regardless of income. California charges about 70.9 cents per gallon in state-level gas taxes, the highest in the country. Illinois is second at 66.4 cents, followed by Washington at 59 cents and Pennsylvania at 58.7 cents. At the low end, Alaska charges under 10 cents per gallon. For someone driving 12,000 miles a year in a car that gets 25 miles per gallon, the difference between California and Alaska adds up to roughly $300 a year in fuel costs alone.

Estate and Inheritance Tax States

A handful of states also take a cut when you die. Twelve states and the District of Columbia impose their own estate tax on top of the federal one, and the state-level exemptions are often far lower than the federal exemption of more than $13 million for 2026. Oregon’s estate tax kicks in at just $1 million, Massachusetts at $2 million, and Washington at about $2.19 million.⁸

Top rates run steep. Hawaii charges up to 20 percent on estates over $10 million. Washington’s rates range from 10 to 19 percent. New York caps at 16 percent but sets its exemption at about $6.94 million, and its “cliff” provision means that if the estate exceeds the exemption by even a small amount, the entire estate becomes taxable rather than just the excess.

Five states impose an inheritance tax, which taxes the people receiving the assets rather than the estate itself: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state that imposes both. Rates depend on the heir’s relationship to the deceased. Spouses and direct descendants typically pay nothing or very little, while unrelated heirs can face rates as high as 15 or 16 percent in New Jersey and Nebraska.⁸

The No-Income-Tax Trade-Off

Nine states charge no broad-based personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. That sounds like an obvious win, but these states still need revenue and get it somewhere. Texas and New Hampshire impose some of the highest property taxes in the country. Tennessee and Washington rely on sales taxes that rank in the national top three. Nevada leans on gaming and tourism revenue.

New Hampshire taxes interest and dividend income but not wages, a distinction that matters for retirees with investment portfolios. Washington recently added a capital gains tax on sales above $270,000. “No income tax” is not the same as “low taxes.” A high-income remote worker with a modest home does well in Texas. A retiree with a paid-off house and investment income may find New Hampshire less appealing than it first sounds.

Moving Away Doesn’t End the Old State’s Claim

Relocating to a lower-tax state doesn’t automatically end your old state’s claim on your income. Most states use a 183-day rule to determine statutory residency: if you spend 183 days or more in a state during the year, that state considers you a resident for tax purposes and taxes your worldwide income. A “day” typically counts as any day you’re physically present, even for a few hours.

High-tax states like New York and California audit departing high-income residents aggressively. Auditors look at where your driver’s license is registered, where your kids go to school, where your doctors and dentists are, where you vote, and where you keep your most valuable personal property. Buying a home in Florida and updating your mailing address is not enough. You need to cut genuine ties with the old state. If the auditor finds more connections to the old state than the new one, you could owe back taxes, interest, and penalties for every year you claimed the wrong residence.

1
Tax Foundation. 2026 State Tax Competitiveness Index Full Study
2
Tax Foundation. Taxes in New York
3
Tax Foundation. State Individual Income Tax Rates and Brackets, 2026
4
Tax Foundation. 2026 State Tax Competitiveness Index – New York
5
Tax Foundation. Property Taxes by State and County, 2026
6
Tax Foundation. Taxes in Louisiana
7
Tax Foundation. State and Local Sales Tax Rates, 2026
8
Tax Foundation. Tax Foundation Facts and Figures 2026