This story originally appeared on HireAHelper.
What is the landscape of taxes in America going into 2021? The Tax Cuts and Jobs Act, which was signed into law in 2017 by President Donald Trump, reduced personal income tax rates for most people across the nation. However, that same piece of tax legislation also put a cap on state and local tax (SALT) deductions. Formerly, taxpayers who itemize could deduct the total amount of state and local taxes paid on their federal tax return, which significantly reduced an individual’s federal tax burden. But the new tax code caps SALT deductions at $10,000 — a change that has made living in high-tax states even more expensive for high earners.
The three largest types of state and local taxes that impact residents in those states are sales, property, and individual income taxes. Based on data from the U.S Census Bureau’s most recent Annual Survey of State and Local Government Finances, Americans paid $1,869 in sales taxes, $1,301 in income taxes, and $1,672 in property taxes per capita in 2018. Combined, this equates to $4,842 per capita, or approximately 8.9% of per capita income. But, the total amount of taxes paid and the allocation of those taxes across sales, income, and property vary widely by state.
To identify the states with the largest and smallest tax burdens for residents, researchers at HireAHelper used data from the U.S. Census Bureau and U.S. Bureau of Economic Analysis to calculate the total annual property, income, and sales taxes collected in each state as a percentage of the state’s total annual personal income.
Here are the states with the highest tax burdens for residents, followed by the states with the lowest tax burdens.
1. New York
Property, income, and sales taxes as a percentage of income: 12.80%
Annual property, income, and sales taxes per person: $8,781
Property taxes as a percentage of income: 4.41%
Income taxes as a percentage of income: 4.96%
Sales taxes as a percentage of income: 3.43%
2. Hawaii
Property, income, and sales taxes as a percentage of income: 12.23%
Annual property, income, and sales taxes per person: $6,755
Property taxes as a percentage of income: 2.46%
Income taxes as a percentage of income: 3.10%
Sales taxes as a percentage of income: 6.68%
3. District of Columbia
Property, income, and sales taxes as a percentage of income: 11.63%
Annual property, income, and sales taxes per person: $9,435
Property taxes as a percentage of income: 4.60%
Income taxes as a percentage of income: 3.63%
Sales taxes as a percentage of income: 3.40%
4. Vermont
Property, income, and sales taxes as a percentage of income: 10.92%
Annual property, income, and sales taxes per person: $5,827
Property taxes as a percentage of income: 5.12%
Income taxes as a percentage of income: 2.45%
Sales taxes as a percentage of income: 3.35%
5. Connecticut
Property, income, and sales taxes as a percentage of income: 10.67%
Annual property, income, and sales taxes per person: $7,985
Property taxes as a percentage of income: 4.15%
Income taxes as a percentage of income: 3.64%
Sales taxes as a percentage of income: 2.88%
6. Maine
Property, income, and sales taxes as a percentage of income: 10.52%
Annual property, income, and sales taxes per person: $5,136
Property taxes as a percentage of income: 4.61%
Income taxes as a percentage of income: 2.46%
Sales taxes as a percentage of income: 3.45%
7. New Jersey
Property, income, and sales taxes as a percentage of income: 10.06%
Annual property, income, and sales taxes per person: $6,809
Property taxes as a percentage of income: 4.98%
Income taxes as a percentage of income: 2.49%
Sales taxes as a percentage of income: 2.59%
8. Minnesota
Property, income, and sales taxes as a percentage of income: 10.02%
Annual property, income, and sales taxes per person: $5,746
Property taxes as a percentage of income: 2.87%
Income taxes as a percentage of income: 3.69%
Sales taxes as a percentage of income: 3.46%
9. Rhode Island
Property, income, and sales taxes as a percentage of income: 9.75%
Annual property, income, and sales taxes per person: $5,312
Property taxes as a percentage of income: 4.47%
Income taxes as a percentage of income: 2.31%
Sales taxes as a percentage of income: 2.98%
10. California
Property, income, and sales taxes as a percentage of income: 9.49%
Annual property, income, and sales taxes per person: $6,029
Property taxes as a percentage of income: 2.64%
Income taxes as a percentage of income: 3.78%
Sales taxes as a percentage of income: 3.06%
Now, for the states with the lowest tax burden for residents.
1. Alaska
Property, income, and sales taxes as a percentage of income: 5.04%
Annual property, income, and sales taxes per person: $3,030
Property taxes as a percentage of income: 3.64%
Income taxes as a percentage of income: 0.00%
Sales taxes as a percentage of income: 1.40%
2. Tennessee
Property, income, and sales taxes as a percentage of income: 5.70%
Annual property, income, and sales taxes per person: $2,694
Property taxes as a percentage of income: 1.69%
Income taxes as a percentage of income: 0.08%
Sales taxes as a percentage of income: 3.93%
3. Wyoming
Property, income, and sales taxes as a percentage of income: 6.11%
Annual property, income, and sales taxes per person: $3,709
Property taxes as a percentage of income: 3.32%
Income taxes as a percentage of income: 0.00%
Sales taxes as a percentage of income: 2.80%
4. Delaware
Property, income, and sales taxes as a percentage of income: 6.17%
Annual property, income, and sales taxes per person: $3,260
Property taxes as a percentage of income: 1.76%
Income taxes as a percentage of income: 3.23%
Sales taxes as a percentage of income: 1.18%
5. New Hampshire
Property, income, and sales taxes as a percentage of income: 6.83%
Annual property, income, and sales taxes per person: $4,192
Property taxes as a percentage of income: 5.47%
Income taxes as a percentage of income: 0.13%
Sales taxes as a percentage of income: 1.24%
6. Florida
Property, income, and sales taxes as a percentage of income: 6.86%
Annual property, income, and sales taxes per person: $3,489
Property taxes as a percentage of income: 2.70%
Income taxes as a percentage of income: 0.00%
Sales taxes as a percentage of income: 4.16%
7. Oklahoma
Property, income, and sales taxes as a percentage of income: 7.19%
Annual property, income, and sales taxes per person: $3,295
Property taxes as a percentage of income: 1.68%
Income taxes as a percentage of income: 1.93%
Sales taxes as a percentage of income: 3.58%
8. South Dakota
Property, income, and sales taxes as a percentage of income: 7.35%
Annual property, income, and sales taxes per person: $3,853
Property taxes as a percentage of income: 3.01%
Income taxes as a percentage of income: 0.00%
Sales taxes as a percentage of income: 4.34%
9. Montana
Property, income, and sales taxes as a percentage of income: 7.36%
Annual property, income, and sales taxes per person: $3,540
Property taxes as a percentage of income: 3.55%
Income taxes as a percentage of income: 2.54%
Sales taxes as a percentage of income: 1.26%
10. Alabama
Property, income, and sales taxes as a percentage of income: 7.37%
Annual property, income, and sales taxes per person: $3,147
Property taxes as a percentage of income: 1.40%
Income taxes as a percentage of income: 1.94%
Sales taxes as a percentage of income: 4.03%
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