States saw a bump up in tax revenues last year. According to the National Association of State Budget Officers, general fund revenues for all states totaled $988.2 billion in fiscal year 2021, a 12.8% increase from fiscal 2020. Personal income taxes, sales and use taxes, and corporate income taxes are the main revenue sources into a state’s general fund. State taxes fund everything from elementary to higher education as well as public services such as road maintenance and law enforcement.
NASBO attributes the hike in state revenues to the federal stimulus package, which lessened the blow of tax collection shortfalls. The pandemic also had less of an impact on high income earners who pay the most in personal income taxes. In addition, the association notes, sales tax revenues didn’t suffer too much because the consumption-type businesses affected most by pandemic shutdowns don’t represent a major portion of sales tax collections. (These are the states with the highest gas taxes.)
While property taxes are a major part of any homeowner’s tax bill, property taxes are generally levied at the local level. In most of the country, the largest components of state tax collections are individual income taxes and sales taxes. In 2020, individual income and state sales taxes accounted for 68.5% of the average U.S. taxpayer’s state tax bill. Other components include corporate income taxes, excise taxes, and estate and inheritance taxes. (Here, though, are some states with no income tax.)
To determine the states with the highest and lowest taxes, 24/7 Tempo reviewed data on tax collections from the Tax Foundation’s Facts & Figures 2022 report. States were ranked based on total state tax collections in the 2020 fiscal year as a percentage of income per capita in 2020. Data on state tax collections came from the Tax Foundation and do not include local or federal tax collections. Data on state income per capita is from the Bureau of Labor Statistics.
Click here to see where people pay the most of their income in state taxes
Although Eastern states have a reputation for having high taxes, North Dakota, at 9% of income, ranks first. Its state tax collections per capita was also the highest at $5,566. Hawaii tied with North Dakota at 9% of income, though state tax collections per capita in the Aloha State came in third at $5,296. (Still, maybe that’s why people are leaving Hawaii.)
Compare that to New York State at 6.2%. Although New York takes less on a percentage basis, the state takes in a relatively high $4,590 in taxes per capita, seventh highest. Alaska, on the other hand, levies the lowest state tax at 2.8% of income, or $1,797 in collections per capita. Looking for a low-tax state?
50. Alaska
> State tax burden: 2.8% of income
> State tax collections per capita: $1,797 (the lowest)
> State income per capita: $63,502 (10th highest)
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49. New Hampshire
> State tax burden: 3.1% of income
> State tax collections per capita: $2,075 (4th lowest)
> State income per capita: $67,097 (7th highest)
48. Florida
> State tax burden: 3.6% of income
> State tax collections per capita: $2,002 (2nd lowest)
> State income per capita: $55,675 (25th highest)
47. Texas
> State tax burden: 3.8% of income
> State tax collections per capita: $2,093 (5th lowest)
> State income per capita: $55,129 (24th lowest)
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46. South Dakota
> State tax burden: 3.8% of income
> State tax collections per capita: $2,276 (7th lowest)
> State income per capita: $59,281 (18th highest)
45. Missouri
> State tax burden: 3.9% of income
> State tax collections per capita: $2,016 (3rd lowest)
> State income per capita: $51,697 (14th lowest)
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44. Colorado
> State tax burden: 4.1% of income
> State tax collections per capita: $2,611 (15th lowest)
> State income per capita: $63,776 (9th highest)
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43. Georgia
> State tax burden: 4.3% of income
> State tax collections per capita: $2,218 (6th lowest)
> State income per capita: $51,780 (15th lowest)
42. Tennessee
> State tax burden: 4.8% of income
> State tax collections per capita: $2,427 (10th lowest)
> State income per capita: $51,046 (13th lowest)
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41. South Carolina
> State tax burden: 4.8% of income
> State tax collections per capita: $2,304 (8th lowest)
> State income per capita: $48,021 (7th lowest)
40. Louisiana
> State tax burden: 4.8% of income
> State tax collections per capita: $2,443 (11th lowest)
> State income per capita: $50,874 (12th lowest)
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39. Ohio
> State tax burden: 4.8% of income
> State tax collections per capita: $2,592 (14th lowest)
> State income per capita: $53,641 (21st lowest)
38. Arizona
> State tax burden: 5.0% of income
> State tax collections per capita: $2,487 (12th lowest)
> State income per capita: $49,648 (9th lowest)
37. Pennsylvania
> State tax burden: 5.1% of income
> State tax collections per capita: $3,129 (24th highest)
> State income per capita: $61,700 (15th highest)
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36. Utah
> State tax burden: 5.1% of income
> State tax collections per capita: $2,669 (16th lowest)
> State income per capita: $52,204 (17th lowest)
35. Alabama
> State tax burden: 5.2% of income
> State tax collections per capita: $2,397 (9th lowest)
> State income per capita: $46,479 (4th lowest)
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34. Nebraska
> State tax burden: 5.2% of income
> State tax collections per capita: $2,986 (23rd lowest)
> State income per capita: $57,570 (21st highest)
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33. Oklahoma
> State tax burden: 5.2% of income
> State tax collections per capita: $2,590 (13th lowest)
> State income per capita: $49,878 (10th lowest)
32. Michigan
> State tax burden: 5.2% of income
> State tax collections per capita: $2,785 (19th lowest)
> State income per capita: $53,259 (18th lowest)
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31. Virginia
> State tax burden: 5.2% of income
> State tax collections per capita: $3,251 (22nd highest)
> State income per capita: $61,958 (13th highest)
30. Rhode Island
> State tax burden: 5.3% of income
> State tax collections per capita: $3,214 (23rd highest)
> State income per capita: $60,825 (17th highest)
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29. Oregon
> State tax burden: 5.4% of income
> State tax collections per capita: $3,015 (24th lowest)
> State income per capita: $56,312 (22nd highest)
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28. North Carolina
> State tax burden: 5.4% of income
> State tax collections per capita: $2,711 (17th lowest)
> State income per capita: $50,305 (11th lowest)
27. Montana
> State tax burden: 5.5% of income
> State tax collections per capita: $2,922 (21st lowest)
> State income per capita: $53,361 (19th lowest)
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26. Wyoming
> State tax burden: 5.5% of income
> State tax collections per capita: $3,405 (16th highest)
> State income per capita: $61,855 (14th highest)
25. New Jersey
> State tax burden: 5.6% of income
> State tax collections per capita: $4,083 (10th highest)
> State income per capita: $73,460 (4th highest)
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24. Washington
> State tax burden: 5.6% of income
> State tax collections per capita: $3,766 (12th highest)
> State income per capita: $67,126 (6th highest)
23. Illinois
> State tax burden: 5.6% of income
> State tax collections per capita: $3,534 (14th highest)
> State income per capita: $62,930 (11th highest)
22. Nevada
> State tax burden: 5.7% of income
> State tax collections per capita: $3,045 (25th lowest)
> State income per capita: $53,720 (22nd lowest)
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21. Massachusetts
> State tax burden: 5.7% of income
> State tax collections per capita: $4,499 (8th highest)
> State income per capita: $78,458 (2nd highest)
20. Maryland
> State tax burden: 5.8% of income
> State tax collections per capita: $3,866 (11th highest)
> State income per capita: $66,799 (8th highest)
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19. Kansas
> State tax burden: 5.9% of income
> State tax collections per capita: $3,288 (21st highest)
> State income per capita: $56,099 (23rd highest)
18. Idaho
> State tax burden: 5.9% of income
> State tax collections per capita: $2,872 (20th lowest)
> State income per capita: $48,759 (8th lowest)
17. Wisconsin
> State tax burden: 6.1% of income
> State tax collections per capita: $3,413 (15th highest)
> State income per capita: $55,593 (25th lowest)
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16. New York
> State tax burden: 6.2% of income
> State tax collections per capita: $4,590 (7th highest)
> State income per capita: $74,472 (3rd highest)
15. California
> State tax burden: 6.2% of income
> State tax collections per capita: $4,349 (9th highest)
> State income per capita: $70,192 (5th highest)
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14. Iowa
> State tax burden: 6.2% of income
> State tax collections per capita: $3,342 (19th highest)
> State income per capita: $53,478 (20th lowest)
13. Kentucky
> State tax burden: 6.3% of income
> State tax collections per capita: $2,967 (22nd lowest)
> State income per capita: $47,339 (6th lowest)
12. Indiana
> State tax burden: 6.3% of income
> State tax collections per capita: $3,297 (20th highest)
> State income per capita: $51,926 (16th lowest)
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11. Connecticut
> State tax burden: 6.5% of income
> State tax collections per capita: $5,103 (4th highest)
> State income per capita: $78,609 (the highest)
10. Mississippi
> State tax burden: 6.5% of income
> State tax collections per capita: $2,735 (18th lowest)
> State income per capita: $42,129 (the lowest)
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9. Maine
> State tax burden: 6.6% of income
> State tax collections per capita: $3,561 (13th highest)
> State income per capita: $54,211 (23rd lowest)
8. West Virginia
> State tax burden: 6.8% of income
> State tax collections per capita: $3,049 (25th highest)
> State income per capita: $44,994 (2nd lowest)
7. Arkansas
> State tax burden: 7.2% of income
> State tax collections per capita: $3,405 (16th highest)
> State income per capita: $47,235 (5th lowest)
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6. New Mexico
> State tax burden: 7.3% of income
> State tax collections per capita: $3,377 (18th highest)
> State income per capita: $46,338 (3rd lowest)
5. Minnesota
> State tax burden: 7.6% of income
> State tax collections per capita: $4,695 (5th highest)
> State income per capita: $62,005 (12th highest)
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4. Delaware
> State tax burden: 8.2% of income
> State tax collections per capita: $4,602 (6th highest)
> State income per capita: $56,097 (24th highest)
3. Vermont
> State tax burden: 9.0% of income
> State tax collections per capita: $5,318 (2nd highest)
> State income per capita: $59,187 (19th highest)
2. Hawaii
> State tax burden: 9.0% of income
> State tax collections per capita: $5,296 (3rd highest)
> State income per capita: $58,655 (20th highest)
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1. North Dakota
> State tax burden: 9.0% of income
> State tax collections per capita: $5,566 (the highest)
> State income per capita: $61,530 (16th highest)
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