Residents of the highest-taxed states pay roughly 14% of their personal income to state and local governments combined, while residents of the lowest-taxed states pay closer to 5%. That is the honest way to compare total taxes by state: not by any one rate, but by the total share of income consumed by every state and local tax added together. On a $100,000 income, the gap between the top of the list and the bottom is around $9,000 a year. Hawaii sits at the top at about 14.1% of personal income. Alaska sits at the bottom near 5%.1Tax Foundation. Taxes In Hawaii
How Total Tax Burden Is Actually Measured
Comparing states by a single tax rate is misleading. A state with no income tax can still have a heavier total burden than one with a 5% income tax, depending on what the property and sales taxes look like. Analysts use two approaches, and only one of them really answers the question.
The simpler method is tax collections per capita: total state and local revenue divided by population. That gives a raw dollar figure but ignores whether residents can afford it. A state full of high earners will generate more revenue per person without necessarily imposing a heavier burden.
The more useful measure is the effective tax rate as a percentage of personal income. Take everything paid in state and local taxes across all categories, divide by the state’s total personal income, and you get the share of earning power that actually goes to government. This is the figure in most credible rankings, and it’s what people mean when they ask which states have the highest taxes.
Highest and Lowest Burden States
The highest total burdens cluster in the Northeast and along the West Coast. Hawaii consistently sits at the top at about 14.1% of personal income.1Tax Foundation. Taxes In Hawaii New York, Vermont, Maine, and Connecticut round out the highest-burden group, driven by steep progressive income taxes stacked on top of substantial property levies. Hawaii’s income tax burden alone is among the highest in the country for nearly every income level and filing status.2Department of Taxation. Comparing Hawaii’s Income Tax Burden to Other States
The lowest burdens are in the Southeast and Mountain West. Alaska is typically at the bottom thanks to the absence of both a state income tax and a state sales tax, plus heavy revenue from oil severance taxes.1Tax Foundation. Taxes In Hawaii Wyoming, South Dakota, and Tennessee also sit near the bottom. These states substitute severance taxes, tourism revenue, and consumption levies for direct income taxation.
Why “No Income Tax” Doesn’t Mean Low Total Taxes
Eight states charge no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. New Hampshire joined the group after repealing its interest and dividends tax effective in 2025.3Tax Foundation. State Individual Income Tax Rates and Brackets, 2026 The headline is a powerful draw, but a zero income tax rate does not guarantee a low overall burden. Lost revenue has to come from somewhere, and that somewhere is usually property taxes, sales taxes, or both.
Texas has no income tax but relies on property taxes that are among the highest in the country. Washington charges no income tax on wages but imposes a 7% capital gains excise tax on high-value investment gains and combined sales tax rates above 9% in many localities.4Tax Foundation. State and Local Sales Tax Rates, 2026 Florida leans on sales and tourism taxes. The pattern holds: eliminating one major revenue source always inflates others.
The Four Taxes That Make Up the Total
Every state builds revenue from some combination of income, sales, property, and excise taxes. The mix is what determines who actually bears the heaviest load.
Individual Income Tax
Beyond the eight no-tax states, the rest of the country and the District of Columbia use either a progressive structure with rates that climb as income rises, or a single flat rate. Fourteen states currently use a flat rate.5Tax Foundation. State Income Tax Rates Income taxes are the single largest revenue source for most states that impose them.
One wrinkle catches investors off guard: most states treat long-term capital gains as ordinary income, taxing them at the same rate as wages. Only about eight states offer lower rates or partial exclusions for long-term gains, and two states, Minnesota and Washington, actually tax certain capital gains at higher rates than ordinary income.6Tax Foundation. State Tax Rates on Long-Term Capital Gains
Sales Tax
State sales tax rates run from 2.9% in Colorado to 7.25% in California, but the statutory rate tells only part of the story. Once you add local sales taxes, the nationwide population-weighted average climbs to 7.53%.4Tax Foundation. State and Local Sales Tax Rates, 2026 Five states impose no state sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon.
Sales taxes are regressive by nature. Low-income households spend a larger share of their income on taxable goods, so the tax takes a bigger proportional bite from their paychecks than from wealthier residents.
Property Tax
Property taxes on real estate fund local governments and account for 70% of all local tax collections.7Tax Foundation. Property Taxes by State and County, 2026 The state sets the framework (assessment rules, exemptions, rate caps), but the effective rate swings widely not just between states but between neighboring counties in the same state. States with no income tax often compensate through higher property taxes.
Excise Taxes
Excise taxes target specific products: gasoline, tobacco, alcohol, and, in some states, recreational marijuana. Gas taxes function as a user fee for road infrastructure; taxes on tobacco and alcohol aim to raise revenue and discourage consumption. These per-unit taxes hit all consumers equally regardless of income, which makes them regressive by design.
How the Same State Feels Different Depending on Who You Are
The same state tax system lands very differently on different people. Where you fall on the income spectrum, whether you’re working or retired, and what kind of income you earn all change the math.
Low-Income Households
Low-income households are disproportionately squeezed by sales, excise, and property taxes because nearly all of their income goes to necessities. Nationwide, the poorest 20% of earners pay an average effective state and local tax rate of 11.4%, compared to 7.4% for the richest 1%.8ITEP. Poorest 20 Percent Pays a 50 Percent Higher Effective State and Local Tax Rate Than the Top 1 Percent The people least able to afford taxes end up paying the highest effective rate in most states, a direct consequence of relying on consumption and property taxes rather than progressive income taxes.
High Earners
High earners benefit most from states with no income tax or a flat rate, even when property taxes are steeper, because the income tax savings typically dwarf the added property cost. States with steeply progressive rate structures where top marginal rates exceed 10% create obvious incentives to establish residency elsewhere. Research on tax-motivated migration is more nuanced than headlines suggest, though. Job opportunities, family ties, and quality of life consistently rank above tax rates in surveys of why people actually move.
Retirees
For retirees, the picture depends on the composition of their income. Eight states still tax Social Security benefits to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Most offer partial exemptions tied to income thresholds. Colorado allows taxpayers 65 and older to fully deduct their federally taxed Social Security, and New Mexico exempts benefits entirely for single filers earning under $100,000.
Property taxes are the other pressure point. A retiree whose home has appreciated significantly may face a tax bill that keeps rising while their income stays flat. Some states offer homestead exemptions, senior freezes, or circuit-breaker credits to ease this burden, but availability varies widely. A state with no income tax and no Social Security taxation can still be expensive for a retiree sitting on a high-value property.
Local Rates: The Variable Most Rankings Miss
State-level comparisons are a starting point, but the actual bill depends heavily on which city or county you live in. Property tax rates can double between neighboring counties in the same state. Local sales taxes create similar distortions. Louisiana has a moderate state sales tax rate, but local jurisdictions add so much on top that the state’s average combined rate leads the nation.4Tax Foundation. State and Local Sales Tax Rates, 2026 Alabama and Colorado follow a similar pattern, where aggressive local add-ons push the combined rate far beyond what the state rate alone would suggest.
The upshot: moving 20 miles within the same state can meaningfully change your tax bill. A serious comparison drills down to the county or city level for property and sales taxes, not just state averages.
Working Across State Lines
Remote work and interstate commuting add a layer of complexity that catches many taxpayers off guard. The default rule is straightforward: you owe income tax to the state where you earn the money and get a credit from your home state to avoid double taxation. The details get messy fast.
About 16 states and the District of Columbia have reciprocity agreements that simplify things for cross-border commuters. Under these agreements, you pay income tax only to your state of residence, regardless of where your office is. Live in Pennsylvania and commute to Maryland, and you file only with Pennsylvania.
Remote workers face a less generous landscape. Six states (New York, Delaware, Connecticut, Nebraska, Oregon, and Pennsylvania) apply some version of a “convenience of the employer” rule, which taxes your income based on where your employer’s office is located rather than where you actually work.9National Conference of State Legislatures. State and Local Tax Considerations of Remote Work Arrangements Work from your home in New Jersey for a New York-based employer, and New York may tax that income as if you earned it in Manhattan. Your home state may not fully credit you. The result can be partial double taxation.
Residency itself can trigger unexpected obligations. Many states presume you are a tax resident if you maintain a home there and spend more than 183 days in the state during the year. California uses a broader test: spending at least nine months in the state creates a presumption of residency. Split time between two states and both may claim you owe them, and resolving the dispute means filing in both and claiming credits.
The SALT Deduction Changes the Real Cost
The federal state and local tax (SALT) deduction lets taxpayers who itemize deduct some of what they pay in state and local taxes from their federal taxable income. From 2018 through 2025, the deduction was capped at $10,000 ($5,000 for married filing separately) under the Tax Cuts and Jobs Act.10Congress.gov. The SALT Cap: Overview and Analysis That cap stung hardest in high-tax states like New York, New Jersey, and California, where many homeowners pay well above $10,000 in property taxes alone.
For 2026, Congress raised the cap to $40,400, though the deduction begins phasing out for filers with modified adjusted gross income above $505,000. A married couple in Connecticut paying $25,000 in property taxes and $15,000 in state income tax can now deduct the full amount rather than being stuck at $10,000. The expanded cap is scheduled to shrink slightly each year and revert to $10,000 in 2030 unless Congress acts.
Most state-level comparisons ignore this. Two states with identical effective tax rates can feel very different to someone who itemizes federal deductions. When comparing your real after-federal-deduction cost, the SALT cap is part of the equation.
Putting It Together
No single ranking captures every household’s reality. A retiree in Florida with no earned income and a paid-off house lives in one of the lightest tax environments in the country. A young family buying their first home in the same state could feel squeezed by property taxes and sales taxes on everything from diapers to car repairs. The effective tax rate as a percentage of personal income is the best broad comparison tool, but your personal rate depends on your income level, what kind of income you earn, whether you own property, and how much you spend on taxable goods. State-level numbers are a solid first step. Local rates and your own financial profile are what determine the bill.