Total taxes by state, measured as the share of personal income residents hand over to state and local governments combined, run from about 14.1% in Hawaii down to roughly 5% in Alaska.1Tax Foundation. Taxes In Hawaii On a $100,000 income, that gap works out to about $9,000 a year. No single tax rate tells you where a state falls on that spectrum, because states deliberately balance their portfolios: a low rate in one column almost always means a higher one somewhere else. The only comparison worth making looks at everything a resident actually pays.
The Number That Actually Compares States
Rankings that use a single rate (top marginal income tax, statutory sales tax, average property tax) are misleading on their own. A state with no income tax can carry a heavier total burden than one taxing wages at 5%, depending on what it does with property and sales taxes.
Two measures dominate serious comparisons. Tax collections per capita divide total state and local revenue by population, producing a raw dollar figure but ignoring residents’ ability to pay; a state full of high earners generates more revenue per person without necessarily taxing anyone harder. The more useful figure is the effective tax rate as a percentage of personal income: total tax dollars collected across every category, divided by the state’s total personal income. That share is what people really mean when they ask which states tax the most.
Where the Highest Burdens Sit
The heaviest total burdens cluster in the Northeast and along the West Coast. Hawaii sits at the top at around 14.1% of personal income, driven by an income tax burden that ranks among the country’s highest for nearly every filing status.2Department of Taxation. Comparing Hawaii’s Income Tax Burden to Other States New York, Vermont, Maine, and Connecticut fill out the highest-burden tier. What they share is steep progressive income tax structures layered on top of substantial property levies, with sales taxes doing additional work on the consumption side.
Progressive rate structures where top marginal rates exceed 10% draw the most attention, but the burden in these states comes from the stacking rather than any one tax alone. A household in Connecticut, for example, feels the combined weight of state income tax, some of the country’s higher property taxes, and full sales tax on most goods.
Where the Lowest Burdens Sit
The Southeast and Mountain West dominate the low-burden end. Alaska comes in lowest at roughly 5% of personal income, thanks to no income tax, no state sales tax, and heavy reliance on oil severance revenue. Wyoming, South Dakota, and Tennessee also rank near the bottom, substituting severance taxes, tourism revenue, and consumption levies for direct income taxation.
These states illustrate the underlying rule: revenue has to come from somewhere. When it does not come from residents’ paychecks, it comes from extraction industries, visitors, or consumption. That structure produces genuinely low burdens for residents but works only where the alternative revenue base actually exists, which is why the model does not travel well to states without oil or tourism to lean on.
The No-Income-Tax Tradeoff
Eight states charge no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.3Tax Foundation. State Individual Income Tax Rates and Brackets, 2026 New Hampshire joined the list after repealing its interest and dividends tax effective in 2025. The headline is a real draw, but it does not guarantee a low total burden.
Texas has no income tax and property taxes among the highest in the country. Washington charges no income tax on wages but imposes a 7% capital gains excise tax on high-value investment gains, and combined sales tax rates exceed 9% in many localities.4Tax Foundation. State and Local Sales Tax Rates, 2026 Florida leans on sales and tourism taxes. The pattern holds across the group: eliminating one major revenue source inflates the others.
One trap for investors moving from a no-income-tax state into one that taxes income: most states treat long-term capital gains as ordinary income. Only about eight states offer lower rates or partial exclusions for long-term gains, and Minnesota and Washington actually tax certain capital gains at higher rates than ordinary income.5Tax Foundation. State Tax Rates on Long-Term Capital Gains
How the Same State Hits Different People Differently
A state ranking is an average. Your actual burden depends on your income, what type of income you earn, whether you own property, and how much you spend on taxable goods.
Low-Income Households
Sales, excise, and property taxes take a much bigger proportional bite from low earners, because they spend nearly all of their income on necessities that get taxed. Nationwide, the poorest 20% of earners pay an average effective state and local tax rate of 11.4%, compared with 7.4% for the richest 1%.6ITEP. Poorest 20 Percent Pays a 50 Percent Higher Effective State and Local Tax Rate Than the Top 1 Percent The states that rely most heavily on consumption and property taxes produce the widest gap between the effective rate at the bottom and the effective rate at the top.
High Earners
High earners benefit most from no-income-tax states or flat-rate structures, even when property taxes are steeper, because the income tax savings usually outweigh the added property cost. States with top marginal rates above 10% create the strongest incentives to establish residency elsewhere, though surveys of actual movers consistently rank job opportunities, family, and quality of life above tax rates.
Retirees
For retirees, the composition of income matters as much as the state’s headline rate. Eight states still tax Social Security benefits to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Most of these offer partial exemptions tied to income thresholds. Colorado, for example, lets taxpayers 65 and older fully deduct their federally taxed Social Security, and New Mexico exempts benefits entirely for single filers earning under $100,000.
Property taxes are the other pressure point. A retiree whose home has appreciated significantly can face a bill that keeps rising while income stays flat. Some states offer homestead exemptions, senior freezes, or circuit-breaker credits, but availability and generosity vary widely. A state with no income tax and no Social Security taxation can still be expensive for a retiree sitting on a high-value property.
The Two Things Most Rankings Miss
Local Rates Within the State
State-level comparisons are useful starting points, but the actual bill depends on the county or city. Property taxes are overwhelmingly local, and the effective rate can double between neighboring counties in the same state. Local sales taxes produce similar distortions: Louisiana has a moderate state sales tax rate, but local jurisdictions add so much on top that its average combined rate leads the nation.4Tax Foundation. State and Local Sales Tax Rates, 2026 Alabama and Colorado follow a similar pattern. Once local add-ons are included, the population-weighted nationwide average sales tax rate reaches 7.53%.
Moving 20 miles within the same state can meaningfully change your burden. A serious comparison drills down to the county or city level for property and sales, not just state averages.
Working Across State Lines
Remote work and interstate commuting add complications that catch many taxpayers off guard. The default rule: you owe income tax to the state where you earn the money, and your home state gives you a credit to avoid double taxation.
About 16 states and the District of Columbia have reciprocity agreements that let cross-border commuters pay income tax only to their state of residence. Remote workers are less protected. Six states (New York, Delaware, Connecticut, Nebraska, Oregon, and Pennsylvania) apply some version of a “convenience of the employer” rule, taxing income based on where the employer’s office sits rather than where the worker actually is.7National Conference of State Legislatures. State and Local Tax Considerations of Remote Work Arrangements A New Jersey resident working from home for a New York employer may see that income taxed as if earned in Manhattan, with the home state declining to fully credit the difference. Partial double taxation is the result.
Residency itself can trigger unexpected claims. Many states presume you are a tax resident if you keep a home there and spend more than 183 days in the state during the year. California uses a broader test: spending at least nine months creates a presumption of residency. Split time between two states and both may claim you, forcing you to file in both and sort out the credits.
Estate and Inheritance Taxes: The One-Time Hit
Annual burdens dominate the conversation, but wealth transfer taxes can dwarf a year’s income tax. Twelve states and the District of Columbia impose an estate tax, and five states impose a separate inheritance tax.8Tax Foundation. Estate and Inheritance Taxes by State, 2025 Maryland is the only state that imposes both.
Exemption thresholds vary widely. Oregon’s kicks in at just $1 million, well below many metro-area home values, while other states set the threshold at $5 million or more. Estate tax rates run from about 0.8% to 16% and can include cliff provisions: in New York, an estate exceeding 105% of the exemption is taxed in full, not just on the excess. The five inheritance tax states (Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) base rates on the recipient’s relationship to the deceased, with distant relatives and non-family members paying the highest rates.
The Federal SALT Deduction Changes the Real Cost
The federal state and local tax deduction lets itemizers subtract some of what they pay in state and local taxes from federal taxable income. From 2018 through 2025 the deduction was capped at $10,000 ($5,000 for married filing separately) under the Tax Cuts and Jobs Act, which stung hardest in high-tax states where property taxes alone often exceeded the cap.9Congress.gov. The SALT Cap: Overview and Analysis
For 2026, Congress raised the cap to $40,400, though the deduction begins phasing out for filers with modified adjusted gross income above $505,000. The higher cap meaningfully softens the blow of a high-tax state. A married couple in Connecticut paying $25,000 in property taxes and $15,000 in state income tax can now deduct the full amount rather than being stuck at $10,000. The expanded cap shrinks slightly each year and reverts to $10,000 in 2030 unless Congress acts again.
Two states with identical effective tax rates can feel different after federal deductions are applied. A high-tax state with deductible taxes can beat a low-tax state where the resident does not itemize. When comparing your true after-federal cost, the SALT cap belongs in the calculation.
Putting Your Own Number Together
No single ranking captures every household. A retiree in Florida with no earned income and a paid-off house lives in one of the lightest tax environments in the country. A young family buying their first home in the same state may feel squeezed by property taxes and sales taxes on nearly everything they buy. Effective tax rate as a percentage of personal income is the best broad comparison tool available, but your personal rate depends on your income level, the type of income you earn, whether you own property, and how much you spend on taxable goods. Start with the state figure, then check the local rates for the specific county or city, and adjust for how your own income and spending pattern interact with the state’s tax mix.