Illinois, New York, and Connecticut are the states where residents pay the most in taxes overall, with combined state and local tax burdens running roughly 14.6 to 16.9 percent of a median household’s income. The ranking shifts once you break taxes apart: California charges the highest income tax rate, New Jersey and Illinois tie for the heaviest property taxes, and Louisiana leads on sales tax. What you earn, what you own, and what you buy determine which state actually hits you hardest.
The States With the Heaviest Overall Tax Burden
Overall burden is best measured as the share of household income going to all state and local taxes combined. On that basis, the same handful of states consistently sit at the top:
- Illinois: about 16.9 percent. A flat income tax, some of the highest property taxes in the country, and steep sales taxes all pile on.
- New York: around 15 percent. State income taxes are high, and New York City residents pay a second income tax on top.
- Connecticut: about 14.6 percent. High income and property taxes without much sales-tax relief.
- Pennsylvania: roughly 14.1 percent. A flat state income tax, local earned-income taxes in many municipalities, and above-average property taxes.
- New Jersey: also about 14.1 percent. One of the heaviest property tax burdens in the country stacks on a graduated income tax that reaches 10.75 percent.
Rankings shift with methodology. Per-capita collection studies push New York higher because of how heavily the state leans on personal income taxes. New York collects more income tax per $1,000 of personal income than any other state, roughly 114 percent above the national average and about 20 percent higher than second-place California.1Citizens Budget Commission of New York. New York, Still Top of the Charts The total bite comes from the interaction of several taxes, not any one rate.
Highest State Income Tax Rates
Income taxes are the most visible line item for working residents. Eight states impose no individual income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.2Tax Foundation. State Individual Income Tax Rates and Brackets, 2026 At the other end, a few states charge double-digit top rates.
California has the highest top marginal rate in the country at 13.3 percent. The base schedule under the Revenue and Taxation Code tops out at 12.3 percent, and a 1 percent surcharge on taxable income above one million dollars, enacted through Proposition 63 to fund mental health services, brings the combined rate to 13.3 percent.3California Legislative Information. California Code RTC 17041 – Imposition of Tax New York’s top rate of 10.9 percent applies to taxable income above $25 million, with a recapture provision that effectively applies the top rate to all income for the highest earners, not just the portion above the threshold.4Tax Foundation. 2026 State Tax Competitiveness Index – New York New Jersey’s top bracket of 10.75 percent kicks in at $5 million.5NJ Division of Taxation. NJ Income Tax Rates
Oregon tops out at 9.9 percent, the highest among states without a general sales tax.6Tax Foundation. Oregon Tax Rates and Rankings Minnesota’s top rate of 9.85 percent applies to married filers with taxable income above $261,510.7Minnesota House of Representatives. Minnesota’s Individual Income Tax All of these states use graduated brackets, so only the income within each bracket faces that bracket’s rate. A California resident earning $1.1 million does not pay 13.3 percent on the full amount; only the last $100,000 hits the top rate.
Local Income Taxes That Stack on Top
State rates do not always tell the whole story. New York City layers its own personal income tax on top of New York State’s. The city’s top marginal rate is 3.876 percent on taxable income above $50,000 for single filers.8NYC Comptroller. The NYC Personal Income Tax Before and After the Pandemic A high-earning New York City resident can face a combined state-and-city rate above 14.7 percent before federal taxes, the steepest effective income tax rate any U.S. resident encounters. Cities across Pennsylvania, Ohio, and several other states also impose local earned-income taxes, usually at much lower rates.
Highest Property Tax Rates
Property taxes are the tax people feel most acutely, because the bill arrives as a lump sum instead of being withheld from each paycheck. They also fund most local school districts and municipal services, so rates run highest where local governments carry more of the spending.
New Jersey and Illinois are effectively tied for the highest effective property tax rates in the country, each around 1.88 percent of home value. Applied to real home prices, median annual bills in these states regularly exceed $6,000 and can climb past $9,000 in suburban counties near major cities. Connecticut (1.54 percent), Vermont (1.51 percent), and New Hampshire (1.50 percent) round out the top five.9Tax Foundation. Property Taxes by State and County, 2026
New Hampshire is a special case. The state has no income tax and no sales tax, and property taxes account for about 63 percent of all state and local tax revenue, the most property-tax-dependent share in the country. Homeowners there carry weight that residents of other states spread across multiple tax types.
Highest Sales and Excise Taxes
Sales taxes touch every shopper, which is why they weigh most on lower-income households that spend most of what they earn. Combine state rates with local sales taxes that cities and counties add on, and some states clear 10 percent.
Louisiana has the highest average combined state and local sales tax rate at 10.11 percent. Tennessee is second at 9.61 percent, then Washington at 9.51 percent, with Arkansas and Alabama tied at 9.46 percent.10Tax Foundation. State and Local Sales Tax Rates, 2026 Tennessee’s state-level rate alone is 7 percent before local additions.11Tennessee Department of Revenue. Sales and Use Tax Tennessee and Washington have no income tax; the high sales tax fills the gap.
What gets taxed matters as much as the headline rate. Tennessee taxes groceries at a reduced 4 percent, Alabama at 2 percent, and several other high-sales-tax states exempt groceries entirely. A household that spends heavily on food can pay more in a state with a nominally lower rate but no grocery exemption than in one with a higher headline rate that leaves food alone.
Fuel and Other Excise Taxes
Excise taxes on gasoline, tobacco, and alcohol are often invisible because they sit inside the shelf price rather than appearing at the register. California levies the highest fuel tax at 70.9 cents per gallon, followed by Illinois at 66.4 cents and Washington at 59.0 cents.12Tax Foundation. Gas Taxes by State, 2025 For a commuter driving 30 miles each way in a car that gets 25 miles per gallon, California’s fuel tax alone adds about $40 a month in costs that never show up on a tax return.
How These Taxes Hit Retirees
Most states leave Social Security benefits alone, but nine still tax them to some degree in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. West Virginia is completing its phase-out in 2026 and will fully exempt benefits starting with returns filed in 2027. The others generally exempt lower- and middle-income retirees. Minnesota, for example, fully exempts benefits for single filers with adjusted gross income up to $84,490 and joint filers up to $108,320, with partial exemptions phasing out above those thresholds.
A retiree weighing Minnesota against Florida faces not only the income tax rate difference but also potential taxation of Social Security, pension income, and retirement account withdrawals. The eight states with no income tax automatically exempt all retirement income from state taxation, which is a large part of why Florida and Texas attract so many retirees.
The Federal SALT Deduction Cap
Residents of high-tax states used to deduct all of their state and local taxes on their federal return, which softened the sting of living in an expensive tax jurisdiction. The Tax Cuts and Jobs Act capped that deduction at $10,000 starting in 2018. For 2026, the cap has been raised to $40,400 for most filers (married filing separately excluded), but it phases down for higher earners. The deduction shrinks by 30 cents for every dollar of modified adjusted gross income above $505,000 and hits a $10,000 floor once income reaches about $606,333.13NYC Comptroller. The SALT Deduction in the House Budget Bill
The practical effect: a New Jersey household paying $12,000 in property taxes and $15,000 in state income taxes can now deduct up to $27,000 on the federal return if income sits below the phase-out, rather than being capped at $10,000. Very high earners in New York and California, whose state and local taxes easily exceed $40,000, still lose a large share of the deduction. How much of your state tax burden you can offset federally depends heavily on where the SALT cap lands for your income.
Remote Work and Multi-State Tax Traps
Remote work has created a new tax headache tied directly to high-tax states. Several apply what is called the “convenience of the employer” rule: if your employer’s office is in that state, the state can tax your income even when you work from home somewhere else. Arkansas, Connecticut, Delaware, Nebraska, New York, and Pennsylvania all enforce some version of this rule.14Tax Foundation. Teleworking Employees Face Double Taxation Due to Aggressive State Tax Policies
The result can be genuine double taxation. A remote worker living in New Jersey but employed by a New York company may owe income tax to New York under the convenience rule and also owe income tax to New Jersey as a resident. Home states usually offer a credit for taxes paid to the work state to prevent double taxation. But when the home state sees the work as physically performed within its own borders, it may refuse the credit on the grounds that the income was earned at home, not in New York. You pay both states on the same income with no offset.14Tax Foundation. Teleworking Employees Face Double Taxation Due to Aggressive State Tax Policies
Reciprocity agreements between neighboring states can let cross-border commuters file only in their home state, but those agreements do not cover remote work scenarios involving convenience rules. If you work remotely for an employer in one of the six states above, check your exposure before assuming your home state is the only one entitled to a piece of your paycheck.