In a country as large as the United States, economic activity and tax collection vary considerably by state and region. A resource-rich state like Alaska depends heavily on taxes paid by global oil and gas companies based outside the state, while a major component of Florida’s tax revenue comes from tourism activity.
According to the Tax Foundation, the 84-year-old tax policy nonprofit, state and local taxes currently make up 11.2% of gross national product, the total value of goods produced by a country over the course of a year. This includes several public revenue sources like taxes on property, general sales, income and corporate income, licenses, and excise taxes on alcoholic beverages, tobacco, and other products. (Here are 19 big companies that paid almost nothing or nothing at all in taxes in 2021.)
To determine the states where Americans are paying the most taxes, 24/7 Wall St. reviewed data from the report State and Local Tax Burdens, Calendar Year 2022 published by the Tax Foundation. States were ranked by their tax burden, from low to high. We also estimated income per capita by state from the tax burden share and tax amount paid.
The Tax Foundation defines tax burden as state and local taxes paid by a state’s residents divided by that state’s share of net national product. Unlike tax collections, which represent all taxes made to state and local governments, “tax burdens estimates allocate taxes to states that are economically affected by them” per the Tax Foundation. That is, the measure of tax burden attempts to measure the economic incidence, not the legal one.
State and local tax burdens have increased since 2020 to the highest level since 1978. According to the Tax Foundation, “pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product.”
The 10 states with the highest state-local tax burdens in 2022 range from Maine and Delaware with a 12.4% tax burden to New York’s 15.9% tax burden. Residents of the largest U.S. state, California, bear the fifth largest state-local tax burden at 13.5%. (This is how much tax people pay in an average lifetime in every state.)
Four states with populations of under 1 million are among the 10 states with the lowest combined state and local effective tax burdens. Those 10 states have tax burdens ranging from Alaska’s 4.6% to Oklahoma’s 9%. Texas, the country’s second-largest state by population, has the sixth-lowest state and local effective tax burden at 8.6%. Two other states with large populations, Michigan and Tennessee, are also low-burden states.
Here is where Americans are paying the most taxes
50. Alaska
> State-local tax burden: 4.6% of income
> State-local taxes paid: $2,943
> Est. income: $63,978 per capita
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49. Wyoming
> State-local tax burden: 7.5% of income
> State-local taxes paid: $4,691
> Est. income: $62,547 per capita
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48. Tennessee
> State-local tax burden: 7.6% of income
> State-local taxes paid: $4,036
> Est. income: $53,105 per capita
47. South Dakota
> State-local tax burden: 8.4% of income
> State-local taxes paid: $5,196
> Est. income: $61,857 per capita
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46. Texas
> State-local tax burden: 8.6% of income
> State-local taxes paid: $4,994
> Est. income: $58,070 per capita
45. Michigan
> State-local tax burden: 8.6% of income
> State-local taxes paid: $4,720
> Est. income: $54,884 per capita
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44. North Dakota
> State-local tax burden: 8.8% of income
> State-local taxes paid: $5,403
> Est. income: $61,398 per capita
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43. South Carolina
> State-local tax burden: 8.9% of income
> State-local taxes paid: $4,596
> Est. income: $51,640 per capita
42. Georgia
> State-local tax burden: 8.9% of income
> State-local taxes paid: $4,862
> Est. income: $54,629 per capita
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41. Oklahoma
> State-local tax burden: 9.0% of income
> State-local taxes paid: $4,527
> Est. income: $50,300 per capita
40. Louisiana
> State-local tax burden: 9.1% of income
> State-local taxes paid: $4,762
> Est. income: $52,330 per capita
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39. Florida
> State-local tax burden: 9.1% of income
> State-local taxes paid: $5,406
> Est. income: $59,407 per capita
38. Missouri
> State-local tax burden: 9.3% of income
> State-local taxes paid: $4,953
> Est. income: $53,258 per capita
37. Indiana
> State-local tax burden: 9.3% of income
> State-local taxes paid: $5,030
> Est. income: $54,086 per capita
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36. Arizona
> State-local tax burden: 9.5% of income
> State-local taxes paid: $5,156
> Est. income: $54,274 per capita
35. New Hampshire
> State-local tax burden: 9.6% of income
> State-local taxes paid: $6,593
> Est. income: $68,677 per capita
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34. Nevada
> State-local tax burden: 9.6% of income
> State-local taxes paid: $5,554
> Est. income: $57,854 per capita
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33. Kentucky
> State-local tax burden: 9.6% of income
> State-local taxes paid: $4,669
> Est. income: $48,635 per capita
32. Colorado
> State-local tax burden: 9.7% of income
> State-local taxes paid: $6,699
> Est. income: $69,062 per capita
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31. West Virginia
> State-local tax burden: 9.8% of income
> State-local taxes paid: $4,479
> Est. income: $45,704 per capita
30. Mississippi
> State-local tax burden: 9.8% of income
> State-local taxes paid: $4,220
> Est. income: $43,061 per capita
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29. Alabama
> State-local tax burden: 9.8% of income
> State-local taxes paid: $4,585
> Est. income: $46,786 per capita
28. North Carolina
> State-local tax burden: 9.9% of income
> State-local taxes paid: $5,299
> Est. income: $53,525 per capita
27. Ohio
> State-local tax burden: 10.0% of income
> State-local taxes paid: $5,530
> Est. income: $55,300 per capita
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26. New Mexico
> State-local tax burden: 10.2% of income
> State-local taxes paid: $4,835
> Est. income: $47,402 per capita
25. Arkansas
> State-local tax burden: 10.2% of income
> State-local taxes paid: $5,031
> Est. income: $49,324 per capita
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24. Montana
> State-local tax burden: 10.5% of income
> State-local taxes paid: $5,795
> Est. income: $55,190 per capita
23. Pennsylvania
> State-local tax burden: 10.6% of income
> State-local taxes paid: $6,723
> Est. income: $63,425 per capita
22. Washington
> State-local tax burden: 10.7% of income
> State-local taxes paid: $7,803
> Est. income: $72,925 per capita
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21. Idaho
> State-local tax burden: 10.7% of income
> State-local taxes paid: $5,402
> Est. income: $50,486 per capita
20. Oregon
> State-local tax burden: 10.8% of income
> State-local taxes paid: $6,572
> Est. income: $60,852 per capita
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19. Wisconsin
> State-local tax burden: 10.9% of income
> State-local taxes paid: $6,231
> Est. income: $57,165 per capita
18. Kansas
> State-local tax burden: 11.2% of income
> State-local taxes paid: $6,353
> Est. income: $56,723 per capita
17. Iowa
> State-local tax burden: 11.2% of income
> State-local taxes paid: $6,086
> Est. income: $54,339 per capita
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16. Maryland
> State-local tax burden: 11.3% of income
> State-local taxes paid: $7,680
> Est. income: $67,965 per capita
15. Rhode Island
> State-local tax burden: 11.4% of income
> State-local taxes paid: $6,948
> Est. income: $60,947 per capita
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14. Nebraska
> State-local tax burden: 11.5% of income
> State-local taxes paid: $6,720
> Est. income: $58,435 per capita
13. Massachusetts
> State-local tax burden: 11.5% of income
> State-local taxes paid: $9,405
> Est. income: $81,783 per capita
12. Utah
> State-local tax burden: 12.1% of income
> State-local taxes paid: $6,750
> Est. income: $55,785 per capita
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11. Minnesota
> State-local tax burden: 12.1% of income
> State-local taxes paid: $7,763
> Est. income: $64,157 per capita
10. Maine
> State-local tax burden: 12.4% of income
> State-local taxes paid: $6,906
> Est. income: $55,694 per capita
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9. Delaware
> State-local tax burden: 12.4% of income
> State-local taxes paid: $7,170
> Est. income: $57,823 per capita
8. Virginia
> State-local tax burden: 12.5% of income
> State-local taxes paid: $7,979
> Est. income: $63,832 per capita
7. Illinois
> State-local tax burden: 12.9% of income
> State-local taxes paid: $8,390
> Est. income: $65,039 per capita
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6. New Jersey
> State-local tax burden: 13.2% of income
> State-local taxes paid: $9,648
> Est. income: $73,091 per capita
5. California
> State-local tax burden: 13.5% of income
> State-local taxes paid: $10,167
> Est. income: $75,311 per capita
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4. Vermont
> State-local tax burden: 13.6% of income
> State-local taxes paid: $7,958
> Est. income: $58,515 per capita
3. Hawaii
> State-local tax burden: 14.1% of income
> State-local taxes paid: $8,410
> Est. income: $59,645 per capita
2. Connecticut
> State-local tax burden: 15.4% of income
> State-local taxes paid: $12,151
> Est. income: $78,903 per capita
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1. New York
> State-local tax burden: 15.9% of income
> State-local taxes paid: $12,083
> Est. income: $75,994 per capita
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