The least tax-friendly state in America

Five States With the Highest Taxes

If there's one goal most Americans have in common, it's to pay less money in taxes. But while federal tax rates are a fairly straightforward calculation based on income, state taxes are a whole different story. Unlike federal taxes, state taxes are by no means uniform, which means where you live could have a significant impact on how much money you wind up forking over to your pals at the IRS.

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Image source: Getty Images.

Tax rates by state

WalletHub recently did an in-depth tax burden analysis where it collected data on individual income taxes, property taxes, and sales and gross receipts taxes. It then combined that information to arrive at an ordered ranking of total tax burden by state.

The following table shows which states have the overall highest and lowest tax burdens, as measured by percentage of personal income:

Overall Rank

State

Total Tax Burden

Overall Rank

State

Total Tax Burden

1

New York

13.12%

26

Kentucky

8.70%

2

Hawaii

11.86%

27

Arizona

8.67%

3

Maine

11.13%

27

New Mexico

8.67%

3

Vermont

11.13%

29

North Carolina

8.66%

5

Connecticut

10.91%

30

Colorado

8.49%

6

Minnesota

10.46%

31

Oregon

8.45%

7

New Jersey

10.38%

31

Washington

8.45%

8

Rhode Island

10.36%

33

Louisiana

8.43%

9

Wisconsin

10.32%

34

Nevada

8.37%

10

Illinois

10.19%

35

Georgia

8.31%

11

California

9.91%

36

South Carolina

8.03%

12

Ohio

9.48%

37

Missouri

7.90%

13

Maryland

9.38%

38

Idaho

7.87%

14

Kansas

9.32%

39

Virginia

7.80%

15

West Virginia

9.19%

40

Montana

7.71%

16

Indiana

9.18%

41

Texas

7.67%

17

Iowa

9.15%

42

Wyoming

7.62%

18

Massachusetts

9.10%

43

Alabama

7.41%

19

Arkansas

9.09%

44

Florida

7.22%

20

Mississippi

9.06%

45

Oklahoma

6.95%

21

Nebraska

9.04%

46

South Dakota

6.94%

22

Michigan

8.82%

47

New Hampshire

6.88%

23

Utah

8.80%

48

Tennessee

6.56%

24

North Dakota

8.78%

49

Delaware

5.91%

25

Pennsylvania

8.73%

50

Alaska

5.18%

Table by author. Data source: Wallethub.com.

As you can see, New York ranks highest as the state with the largest tax burden overall, with Hawaii as a reasonably distant second. Alaska, meanwhile, imposes the lowest total tax burden among the 50 states.

Property taxes

Real estate taxes are a significant indicator of how affordable it is to live in a specific city, state, or region. You may have heard that living on the East Coast can get expensive because of property taxes, and the numbers certainly don't lie. New Jersey leads the pack in high real estate taxes, followed by New Hampshire, Vermont, Rhode Island, Maine, New York, and Connecticut. Interestingly, though Alaska has the lowest overall tax burden on residents, it ranks 11th in property taxes.

Here's a rundown of which states command the highest real estate taxes, as measured by percentage of total personal income:

Overall Rank

State

Property Tax Burden

Overall Rank

State

Property Tax Burden

1

New Jersey

5.41%

26

Maryland

2.86%

2

New Hampshire

5.32%

27

Colorado

2.85%

3

Vermont

5.20%

27

California

2.84%

3

Rhode Island

4.94%

29

Washington

2.84%

5

Maine

4.82%

30

Arizona

2.75%

6

New York

4.65%

31

South Dakota

2.75%

7

Connecticut

4.39%

31

Georgia

2.69%

8

Wisconsin

4.31%

33

Mississippi

2.67%

9

Illinois

4.26%

34

Utah

2.61%

10

Wyoming

4.19%

35

Indiana

2.53%

11

Alaska

3.73%

36

Idaho

2.49%

12

Massachusetts

3.66%

37

Nevada

2.48%

13

Montana

3.62%

38

Missouri

2.42%

14

Nebraska

3.56%

39

North Carolina

2.39%

15

Texas

3.56%

40

West Virginia

2.27%

16

Iowa

3.46%

41

Hawaii

2.13%

17

Michigan

3.37%

42

Tennessee

2.13%

18

Minnesota

3.26%

43

North Dakota

2.10%

19

Oregon

3.26%

44

Louisiana

2.08%

20

Kansas

3.22%

45

Kentucky

2.03%

21

South Carolina

3.04%

46

New Mexico

1.94%

22

Pennsylvania

2.99%

47

Delaware

1.84%

23

Ohio

2.98%

48

Arkansas

1.80%

24

Florida

2.94%

49

Alabama

1.51%

25

Virginia

2.92%

50

Oklahoma

1.42%

Table by author. Data source: Wallethub.com.

Income taxes

Like real estate taxes, income taxes can also eat away at a chunk of your earnings. The following table shows which states charge the highest income taxes, as measured by percentage of total personal income:

Overall Rank

State

Income Tax Burden

Overall Rank

State

Income Tax Burden

1

New York

4.76%

26

Vermont

2.36%

2

Oregon

4.04%

27

Missouri

2.34%

3

Maryland

3.92%

27

Georgia

2.33%

3

California

3.61%

29

Kansas

2.31%

5

Connecticut

3.49%

30

Idaho

2.25%

6

Minnesota

3.48%

31

Rhode Island

2.24%

7

Massachusetts

3.39%

31

Colorado

2.24%

8

Ohio

3.11%

33

Michigan

2.21%

9

Kentucky

3.09%

34

South Carolina

1.98%

10

North Carolina

2.98%

35

Alabama

1.90%

11

Wisconsin

2.94%

36

Oklahoma

1.80%

12

Maine

2.91%

37

Mississippi

1.74%

13

Delaware

2.86%

38

New Mexico

1.69%

14

Hawaii

2.78%

39

North Dakota

1.63%

15

Illinois

2.76%

40

Louisiana

1.45%

16

West Virginia

2.76%

41

Arizona

1.39%

17

Utah

2.69%

42

New Hampshire

0.15%

18

Virginia

2.69%

43

Tennessee

0.10%

19

Montana

2.65%

44

Washington

0.00%

20

Iowa

2.62%

45

Nevada

0.00%

21

Pennsylvania

2.61%

46

Texas

0.00%

22

New Jersey

2.46%

47

Wyoming

0.00%

23

Indiana

2.46%

48

Florida

0.00%

24

Arkansas

2.45%

49

South Dakota

0.00%

25

Nebraska

2.43%

50

Alaska

0.00%

Table by author. Data source: Wallethub.com.

You'll notice that seven states (Washington, Nevada, Texas, Wyoming, Florida, South Dakota, and Alaska) don't charge income tax at all, while others (New Hampshire and Tennessee) charge a minimal amount. New Yorkers, by contrast, lose an estimated 4.76% of their income to taxes.

Sales and gross receipts taxes

Sales and gross receipts taxes (taxes charged to businesses on gross revenues) make up the final piece of the tax puzzle. Though Hawaii technically has no sales tax, it's expensive to live there because residents pay what's known as a general excise tax for goods and services. By contrast, Delaware, Montana, Oregon, and New Hampshire are low on the list because they don't charge sales tax at all. Similarly, Alaska does not impose a state-level sales tax, though its municipalities are allowed to charge retail-level taxes.

Here's how the 50 states rank in terms of sales and gross receipts taxes, as measured by percentage of income:

Overall Rank

State

Sales and Gross Receipts Tax Burden

Overall Rank

State

Sales and Gross Receipts Tax Burden

1

Hawaii

6.95%

26

Maine

3.40%

2

Nevada

5.89%

27

Colorado

3.40%

3

Washington

5.61%

27

Ohio

3.39%

3

North Dakota

5.05%

29

North Carolina

3.29%

5

New Mexico

5.04%

30

Georgia

3.29%

6

Louisiana

4.90%

31

Michigan

3.24%

7

Arkansas

4.84%

31

Rhode Island

3.18%

8

Mississippi

4.65%

33

Illinois

3.17%

9

Arizona

4.53%

34

Missouri

3.14%

10

Tennessee

4.33%

35

Pennsylvania

3.13%

11

Florida

4.28%

36

Idaho

3.13%

12

Indiana

4.19%

37

Wisconsin

3.07%

13

South Dakota

4.19%

38

Iowa

3.07%

14

West Virginia

4.16%

39

Nebraska

3.05%

15

Texas

4.11%

40

Connecticut

3.03%

16

Alabama

4.00%

41

South Carolina

3.01%

17

Kansas

3.79%

42

Maryland

2.60%

18

Oklahoma

3.73%

43

New Jersey

2.51%

19

Minnesota

3.72%

44

Virginia

2.19%

20

New York

3.71%

45

Massachusetts

2.05%

21

Kentucky

3.58%

46

Alaska

1.45%

22

Vermont

3.57%

47

Montana

1.44%

23

Utah

3.50%

48

New Hampshire

1.41%

24

California

3.46%

49

Delaware

1.21%

25

Wyoming

3.43%

50

Oregon

1.15%

Table by author. Data source: Wallethub.com.

Time to move?

If you happen to live in a state with a relatively high tax burden, you may be tempted to pack up and go elsewhere in the hopes of attaining a more financially comfortable lifestyle. But before you do, make sure moving doesn't result in a major salary cut. It's often the case that you'll earn more money in or around a major metro area than you will in a smaller city or town, even when taking a comparable position within your industry. For example, while the average salary for a lawyer in New York City is about $114,000, the average attorney in St. Paul earns roughly $94,000 according to Glassdoor. So, while New York's overall tax burden is 2.66% higher than Minnesota's, moving there won't necessarily save you money if your salary takes a $20,000 dip in the process.

Remember, too, that there are factors outside of taxes that contribute to overall cost of living. Housing prices, for example, are a huge measure of affordability not reflected in this particular set of data. Similarly, public transportation (or lack thereof) and toll roads can play a role in determining how costly it is to live somewhere.

That said, as long as you've done your research, it might pay to pick up and move to another state if you feel yours is too expensive. After all, you've got 50 to choose from!

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RELATED: See the best 10 states to move to for retirement:

11 PHOTOS
Best states for retirement
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Best states for retirement

1. South Dakota

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2. Iowa

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3. Minnesota

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4. Alaska 

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5. Oregon 

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6. Colorado

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7. Hawaii 

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8. South Carolina

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9. Nebraska

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10. Wisconsin

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