State and Local Tax Burdens Announced

Where does your state rank?

Each year the Tax Foundation announces the results of its State and Local Tax Burden study. The results are an estimate of the tax burden paid by residents of each state. Here are the findings:

State Tax Burden study

Sources: Tax Foundation calculations using data from multiple sources, primarily Census Bureau, Rockefeller Institute, Bureau of Economic Analysis, Council on State Taxation, and Travel Industry Association.

Notes: As a unique state-local entity, D.C. is not included in rankings, but the figure in parentheses shows where it would rank. The local portions of tax collection figures for fiscal year 2010 rely on projections of local government tax revenue.

Some Observations

Circle Ironically, a number of states with low sales tax burdens are also states with no individual income taxes. This includes Texas, Alaska, Wyoming and South Dakota.
Circle A number of states receive much of their revenue from non-residents. This includes Alaska (oil extraction revenues), Florida (tourism) and Nevada (tourism). It also includes states where mining is a primary activity. This lowers the effective tax burden for residents within each of these states.
Circle The range of burden varies dramatically from a low of 7.0% in Alaska to a high of 12.8% in New York.
Circle This information can be helpful in understanding the cost of living in an area, but should be taken in conjunction with other factors that are important to you such as health care, income taxes, safety, and the environment.

Want to learn more? The full study is available at www.taxfoundation.org