ALBANY, N.Y. (NEWS10) – With the deadline for filing personal income tax fast approaching, fear can begin to loom over the heads of millions of Americans who owe money to Uncle Sam. The average household in the United States pays over $10,000 in federal income taxes each year. While that obligation is a national one, there is a big difference when it comes to state and local taxes.
To explore which states give taxpayers a break, Wallethub compared the 50 states and the District of Columbia against national medians. The study went on to calculate relative income tax obligations by applying each state’s income tax rate to the average American’s income.
In New York, the study concluded taxpayers owe more than those in 47 other states and the District of Columbia- with the empire state ranking third for highest tax rates in the nation. A full break-down of New York’s tax rates is as follows, compared to national medians:
Tax rates in New York (1st=lowest, 25th=Average)
- 49th – Overall Effective State & Local Tax Rate
- 45th – Income Tax
- 43rd – Real-Estate Tax
- 1st – Vehicle Property Tax
- 35th – Sales & Excise Taxes
Taxes by state
| Overall Rank (1=Lowest) | State | Effective Total State & Local Tax Rates on Median U.S. Household* | Annual State & Local Taxes on Median U.S. Household* | % Difference Between State & U.S. Avg.** | Annual State & Local Taxes on Median State Household*** | Adjusted Overall Rank (based on Cost of Living Index) |
|---|---|---|---|---|---|---|
| 1 | Alaska | 5.84% | $3,694 | -45.91% | $4,585 | 3 |
| 2 | Delaware | 6.25% | $3,949 | -42.18% | $4,366 | 1 |
| 3 | Montana | 7.11% | $4,495 | -34.19% | $4,302 | 2 |
| 4 | Nevada | 7.94% | $5,021 | -26.49% | $5,184 | 10 |
| 5 | Wyoming | 8.05% | $5,092 | -25.45% | $5,184 | 8 |
| 6 | Florida | 8.23% | $5,204 | -23.81% | $4,820 | 5 |
| 7 | Utah | 8.34% | $5,274 | -22.78% | $6,194 | 9 |
| 8 | Idaho | 8.43% | $5,329 | -21.98% | $4,870 | 6 |
| 9 | Colorado | 8.54% | $5,402 | -20.91% | $6,617 | 13 |
| 10 | Tennessee | 8.72% | $5,513 | -19.29% | $4,551 | 4 |
| 11 | California | 8.96% | $5,664 | -17.07% | $8,590 | 32 |
| 12 | Oregon | 8.99% | $5,686 | -16.75% | $6,598 | 24 |
| 13 | District of Columbia | 9.04% | $5,715 | -16.32% | $9,563 | 42 |
| 14 | South Carolina | 9.05% | $5,721 | -16.24% | $4,818 | 11 |
| 15 | Alabama | 9.11% | $5,756 | -15.72% | $4,511 | 7 |
| 16 | Arizona | 9.53% | $6,026 | -11.77% | $5,820 | 14 |
| 17 | West Virginia | 9.70% | $6,132 | -10.22% | $4,413 | 12 |
| 18 | North Dakota | 10.03% | $6,343 | -7.14% | $6,253 | 23 |
| 19 | New Hampshire | 10.07% | $6,364 | -6.82% | $7,583 | 33 |
| 20 | New Mexico | 10.54% | $6,663 | -2.45% | $5,257 | 20 |
| 21 | Georgia | 10.57% | $6,683 | -2.15% | $5,989 | 15 |
| 22 | North Carolina | 10.62% | $6,712 | -1.73% | $5,744 | 17 |
| 23 | Louisiana | 10.64% | $6,723 | -1.56% | $5,240 | 19 |
| 24 | Hawaii | 10.66% | $6,736 | -1.37% | $9,621 | 45 |
| 25 | Virginia | 10.75% | $6,794 | -0.53% | $7,966 | 26 |
| 26 | Massachusetts | 10.91% | $6,897 | 0.99% | $9,979 | 43 |
| 27 | South Dakota | 11.16% | $7,055 | 3.30% | $6,095 | 27 |
| 28 | Missouri | 11.25% | $7,113 | 4.15% | $6,026 | 16 |
| 29 | Minnesota | 11.28% | $7,133 | 4.43% | $7,779 | 29 |
| 30 | Arkansas | 11.29% | $7,138 | 4.50% | $5,221 | 18 |
| 31 | Oklahoma | 11.44% | $7,235 | 5.92% | $5,673 | 22 |
| 32 | Maryland | 11.49% | $7,261 | 6.31% | $10,011 | 46 |
| 33 | Vermont | 11.62% | $7,347 | 7.57% | $7,498 | 41 |
| 34 | Maine | 11.82% | $7,473 | 9.42% | $6,800 | 40 |
| 35 | Indiana | 11.83% | $7,480 | 9.51% | $6,289 | 28 |
| 36 | Mississippi | 11.97% | $7,570 | 10.83% | $5,382 | 21 |
| 37 | Washington | 12.02% | $7,601 | 11.29% | $9,732 | 39 |
| 38 | Michigan | 12.23% | $7,734 | 13.24% | $6,394 | 25 |
| 39 | Kentucky | 12.48% | $7,893 | 15.56% | $6,120 | 30 |
| 40 | Rhode Island | 12.66% | $8,006 | 17.22% | $8,966 | 50 |
| 41 | Texas | 12.79% | $8,083 | 18.34% | $7,212 | 34 |
| 42 | New Jersey | 12.84% | $8,117 | 18.85% | $11,906 | 48 |
| 43 | Ohio | 13.18% | $8,329 | 21.95% | $6,724 | 31 |
| 44 | Iowa | 13.19% | $8,337 | 22.07% | $7,056 | 35 |
| 45 | Wisconsin | 13.22% | $8,357 | 22.36% | $7,586 | 37 |
| 46 | Nebraska | 13.27% | $8,386 | 22.79% | $7,214 | 38 |
| 47 | Kansas | 13.43% | $8,491 | 24.32% | $7,298 | 36 |
| 48 | Pennsylvania | 13.97% | $8,830 | 29.29% | $8,138 | 44 |
| 49 | New York | 14.08% | $8,900 | 30.30% | $11,024 | 49 |
| 50 | Connecticut | 14.85% | $9,385 | 37.41% | $11,631 | 51 |
| 51 | Illinois | 15.01% | $9,488 | 38.92% | $9,200 | 47 |
Surprisingly, according to the study, low-income taxes don’t always mean low taxes as a whole. For example, in the state of Washington, where residents don’t pay income tax, they still end up spending over 8% of their annual income on sales and excise taxes.
Moral of the story? The government will somehow make up for it if you think you’re lucking out this income tax season- which has led 81% of people, according to a 2022 taxpayer survey, to believe the government does not spend its tax dollars wisely.
