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How taxing is your state?

A new study by the Tax Foundation indicates that overall, Americans' state tax burden has dropped ever so slightly.

Taxfoundationlogo_2 In a new special report, Tax Foundation senior economist Gerald Prante found that the nation as a whole paid 9.7 percent of its income in state and local taxes, down from 9.9 percent in 2007.

The main reason for the incremental drop is that our income grew faster than tax collections between 2007 and 2008.

Of course, the national percentage is made of the 50 separate collection amounts. So who among us, according to Tax Foundation data, is paying the least in state and local levies?

10 lowest tax burden states: Alaskans get that honor, but I'm happy to report that Texas made the coveted list of 10 least taxing states. I'm not questioning the data, but sometimes it sure doesn't feel like I'm living in a relatively low-tax state.

Here's the complete list of lower taxing states with the percentage of income paid by their residents:

  • Alaska, 6.4 percent
  • Nevada, 6.6 percent
  • Wyoming, 7.0 percent
  • Florida, 7.4 percent
  • New Hampshire, 7.6 percent
  • South Dakota, 7.9 percent
  • Tennessee, 8.3 percent
  • Texas, 8.4 percent
  • Louisiana, 8.4 percent
  • Arizona, 8.5 percent

10 highest tax burden states: New Jersey has the dubious distinction of leading the list at the other end of the state and local tax spectrum. The 10 states on the highest tax roster are:

  • New Jersey, 11.8 percent
  • New York, 11.7 percent
  • Connecticut, 11.1 percent
  • Maryland, 10.8 percent
  • Hawaii, 10.6 percent
  • California, 10.5 percent
  • Ohio 10.4 percent
  • Vermont, 10.3 percent
  • Wisconsin, 10.2 percent
  • Rhode Island, 10.2 percent

The Tax Foundation notes that its rankings are sometimes confused with others that are based on Census Bureau tallies of state and local tax collections. The difference is out-of-state tax payments.

When state and local governments collect large amounts from non-residents, be they tourists, commuters, businesses or property owners, the Census counts those payments in the collections of the taxing state. The Tax Foundation study, however, records them in the state of the paying individual.

Click here to read the full report. You also can view the data by state or by year.


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