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Regulation and Compliance > State Regulation

The 10 best & worst states to pay taxes

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Tax day is approaching fast — that’s April 18 this year (in most states), in case you needed the reminder. While time keeps ticking away (and stress keeps mounting for those who haven’t filed yet), WalletHub released a report that identifies the best and worst states to be a taxpayer. The report compares state and local tax rates across all 50 states and the District of Columbia against the national median. It also calculates relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income, according to their methodology.

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Report analysts look at four types of taxation: real estate tax, vehicle property tax, income tax, and sales and excise tax. (You can read more about each type here.)

In the list that follows, we look at the 10 best and 10 worst states to be a taxpayer, based on the report’s findings. Each ranking includes an overall rank number, the effective total state and local tax rates on the median U.S. household, the annual state and local taxes on the median U.S. household, the percentage difference between the state and the national average, and the annual state and local taxes on the median state household.

Bottom 10: Worst states to pay taxes

10. New Jersey

Effective total state & local tax rates on median U.S. household: 12.39%

Annual state & local taxes on median U.S. household: $6,675

Percentage difference between state & national average: 15.70%

Annual state & local taxes on median state household: $10,891

9. Iowa

Effective total state & local tax rates on median U.S. household: 12.75%

Annual state & local taxes on median U.S. household: $6,872

Percentage difference between state & national average: 19.12%

Annual state & local taxes on median state household: $6,071

8. Ohio

Effective total state & local tax rates on median U.S. household: 12.97%

Annual state & local taxes on median U.S. household: $6,991

Percentage difference between state & national average: 21.19%

Annual state & local taxes on median state household: $5,892

7. Michigan

Effective total state & local tax rates on median U.S. household: 13.09%

Annual state & local taxes on median U.S. household: $7,054

Percentage difference between state & national average: 22.28%

Annual state & local taxes on median state household: $5,717

6. New York

Effective total state & local tax rates on median U.S. household: 13.38%

Annual state & local taxes on median U.S. household: $7,211

Percentage difference between state & national average: 25%

Annual state & local taxes on median state household: $9,342

5. Rhode Island

Effective total state & local tax rates on median U.S. household: 13.46%

Annual state & local taxes on median U.S. household: $7,255

Percentage difference between state & national average: 25.77%

Annual state & local taxes on median state household: $8,497

4. Connecticut

Effective total state & local tax rates on median U.S. household: 13.48%

Annual state & local taxes on median U.S. household: $7,262

Percentage difference between state & national average: 25.89%

Annual state & local taxes on median state household: $10,131

3. Wisconsin

Effective total state & local tax rates on median U.S. household: 13.58%

Annual state & local taxes on median U.S. household: $7,316

Percentage difference between state & national average: 26.82%

Annual state & local taxes on median state household: $7,065

2. Nebraska

Effective total state & local tax rates on median U.S. household: 13.85%

Annual state & local taxes on median U.S. household: $7,466

Percentage difference between state & national average: 29.41%

Annual state & local taxes on median state household: $6,525

1. Illinois

Effective total state & local tax rates on median U.S. household: 14.54%

Annual state & local taxes on median U.S. household: $7,836

Percentage difference between state & national average: 35.83%

Annual state & local taxes on median state household: $8,100

Top 10: Best states to pay taxes

10. Florida

Effective total state & local tax rates on median U.S. household: 9.03%

Annual state & local taxes on median U.S. household: $4,868

Percentage difference between state & national average: -15.62%

Annual state & local taxes on median state household: $4,305

9. South Carolina

Effective total state & local tax rates on median U.S. household: 8.80%

Annual state & local taxes on median U.S. household: $4,742

Percentage difference between state & national average: -17.80%

Annual state & local taxes on median state household: $4,009

8. California

Effective total state & local tax rates on median U.S. household: 8.80%

Annual state & local taxes on median U.S. household: $4,741

Percentage difference between state & national average: -17.81%

Annual state & local taxes on median state household: $6,803

7. Idaho

Effective total state & local tax rates on median U.S. household: 8.48%

Annual state & local taxes on median U.S. household: $4,569

Percentage difference between state & national average: -20.80%

Annual state & local taxes on median state household: $4,074

6. Tennessee

Effective total state & local tax rates on median U.S. household: 7.95%

Annual state & local taxes on median U.S. household: $4,284

Percentage difference between state & national average: -25.75%

Annual state & local taxes on median state household: $3,523

5. Nevada

Effective total state & local tax rates on median U.S. household: 7.72%

Annual state & local taxes on median U.S. household: $4,161

Percentage difference between state & national average: -27.86%

Annual state & local taxes on median state household: $4,028

4. Wyoming

Effective total state & local tax rates on median U.S. household: 7.45%

Annual state & local taxes on median U.S. household: $4,015

Percentage difference between state & national average: -30.40%

Annual state & local taxes on median state household: $4,312

3. Montana

Effective total state & local tax rates on median U.S. household: 6.92%

Annual state & local taxes on median U.S. household: $3,728

Percentage difference between state & national average: -35.37%

Annual state & local taxes on median state household: $3,561

2. Delaware

Effective total state & local tax rates on median U.S. household: 6.02%

Annual state & local taxes on median U.S. household: $3,246

Percentage difference between state & national average: -43.74%

Annual state & local taxes on median state household: $3,830

1. Alaska

Effective total state & local tax rates on median U.S. household: 5.69%

Annual state & local taxes on median U.S. household: $3,066

Percentage difference between state & national average: -46.85%

Annual state & local taxes on median state household: $4,237

See also:

Tax uncertainties for life settlements: 5+ troublesome issues

5 types of tax procrastinators (and a few things you should know)

15 most overlooked tax deductions

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