States With the Highest and Lowest Overall Tax Rates

Woman shocked by her tax rate
WAYHOME studio / Shutterstock.com

When considering where to move, one of the things you might look at is overall tax rates.

Your tax rate isn’t just about what the state levies in income taxes. It can also include other taxes, such as county and local taxes. When figuring your personal overall tax rate, don’t forget to include applicable sales taxes and property taxes.

WalletHub recently completed an analysis of state taxes and came up with a list of each state’s overall tax rate. In doing so, they “calculated relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income.” Here are the states with the highest and lowest overall tax rates.

States with the lowest overall tax rates

5. Wyoming

Wyoming Capitol
David Gilder / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 8.05%

Wyoming won’t tax your Social Security benefits, and you don’t have to worry about paying personal income tax. On top of that, Wyoming has one of the lowest property tax burdens in the U.S. However, a projected $1.5 billion shortfall due to shifts in energy production isn’t likely to be made up by the recently passed lodging tax expected to mostly come from tourists.

4. Nevada

Nevada legislature
James Pintar / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 7.94%

Another state that won’t tax Social Security benefits or income tax, Nevada ranks as the fourth-lowest for overall tax rates. Additionally, Nevada is one of the friendliest states for property taxes. However, Nevada ranks 13th for sales tax, according to a Tax Foundation analysis, with a combined state and local sales tax rate of 8.23%.

3. Montana

Montana Capitol
Katherine Welles / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 7.11%

Not only is the effective overall rate for Montana relatively low, but it’s one of the states that don’t charge sales tax. Additionally, even though Montana has a relatively high top state tax rate, it’s one of the few states that allows you to deduct federal income taxes on your state return.

2. Delaware

Delaware Capitol
Jon Bilous / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 6.25%

Delaware is one of the states with a low property tax burden. On top of that, Delaware doesn’t charge sales tax, and it also doesn’t charge an estate or inheritance tax. Delaware’s top income tax rate is 6.6% on an income of $60,000 or over.

1. Alaska

Juneau, Alaska
nega / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 5.84%

Alaska is one of the most tax-friendly states. Alaska has no income tax, and it doesn’t tax Social Security benefits. Not only that, but Alaska doesn’t levy an inheritance or estate tax, and it has no statewide sales tax (although localities can charge a sales tax).

States with the highest overall tax rates

5. Kansas

KansasCapitol
Gino Santa Maria / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 13.43%

After tax cuts in Kansas created a budget shortfall of more than $1.3 billion, the state’s effective tax rate is one of the highest in the country. Even though Kansas doesn’t levy inheritance or estate taxes, it ranks eighth-highest for combined state and local sales tax with a rate of 8.69%.

4. Pennsylvania

Pennsylvania Capitol
Cascade Creatives / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 13.97%

Even though you’ll pay personal income taxes in Pennsylvania, the state doesn’t levy taxes on Social Security benefits. Additionally, even though you won’t pay estate taxes in Pennsylvania, your heirs could get stuck with an inheritance tax.

3. New York

New York Capitol
jiawangkun / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 14.08%

Once again, New York is one of the relatively few states that levy an estate tax, although it doesn’t charge an inheritance tax. However, New York does rank in the top 10 for combined state and local sales taxes, with an average of 8.52%.

2. Connecticut

Connecticut Capitol
James Kirkikis / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 14.84%

Even though Connecticut is reducing taxes for pension and annuity income in 2021, it still ranks as one of the highest in the country for overall tax rate, according to the WalletHub report. Additionally, even though the state doesn’t have an inheritance tax, it does levy an estate tax.

1. Illinois

Illinois Capitol
Donald Walker / Shutterstock.com

Effective total state and local tax rate for the median U.S. household: 15.01%

Illinois takes the top spot for effective overall total tax rate. While Illinois doesn’t levy an inheritance tax, it does charge an estate tax. Plus, Illinois ranks as seventh-highest in the country for combined local and state sales taxes, according to the Tax Foundation. The Tax Foundation ranks Illinois as fifth for state and local tax burden.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Colleges That Offer Free Tuition for Seniors
10 Colleges That Offer Free Tuition for Seniors

These schools let retirement-age students study, tuition-free, while earning college credit.

Small Splurges That Make It Feel Like You’re Living Large
Small Splurges That Make It Feel Like You’re Living Large

Cutting costs is the shortest path to financial freedom. However, there are times when a little spending can produce big returns.

These 5 States Have the Worst Health Care for Retirees
These 5 States Have the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

12 Tech Gadgets That Make Daily Life Easier
12 Tech Gadgets That Make Daily Life Easier

These products on Amazon will ease worries and simplify your routine.

7 Things That Prove Cheaper Isn’t Always Better
7 Things That Prove Cheaper Isn’t Always Better

These purchases can end up costing you more if you try to go the cheap route.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

These 5 States Are the Most Expensive Places to Retire
These 5 States Are the Most Expensive Places to Retire

If you expect to have modest retirement income, you may want to avoid spending your golden years here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.