The impact of state taxes varies significantly across the United States, affecting how much individuals contribute from their earnings. While federal taxes apply uniformly, state and local taxes vary, which can influence personal finance and decisions about relocation. This article highlights the disparities in tax burdens across the states for the year 2025.

Tax Burden Defined

Tax burden is a term used to describe the overall amount of taxes paid by individuals or groups, especially in comparisons between different states. This measure can include numerous forms of taxation such as property taxes, income taxes, and sales taxes.

Evaluating State Tax Burdens

WalletHub conducted an analysis utilizing data concerning the three main tax types: individual income taxes, property taxes, and sales/excise taxes. These taxes were assessed as a share of the total personal income in each state, providing a clearer picture of the fiscal landscape outside of federal taxes.

States with the Lowest Tax Burdens in 2025

The following states have been determined to have the lowest tax burdens as a percentage of income:

1. Alaska: 4.93% of income
2. New Hampshire: 5.63% of income
3. Wyoming: 5.7% of income
4. Florida: 6.05% of income
5. Tennessee: 6.07% of income
6. Delaware: 6.43% of income
7. South Dakota: 6.44% of income
8. North Dakota: 6.80% of income
9. Oklahoma: 7.04% of income
10. Nevada: 7.37% of income

States with the Highest Tax Burdens in 2025

In contrast, the states with the highest tax burdens are as follows:

1. New York: 12.02% of income
2. Hawaii: 11.80% of income
3. Vermont: 11.12% of income
4. Maine: 10.74% of income
5. California: 10.40% of income
6. Connecticut: 10.08% of income
7. Minnesota: 9.95% of income
8. Illinois: 9.67% of income
9. New Jersey: 9.47% of income
10. Rhode Island: 9.38% of income

Property Taxes: An Overview

Property tax rates also differ notably across states. The national average for property taxes paid stands at approximately $1,815, but this figure varies widely. States like Alaska, Louisiana, and Alabama have counties with median property taxes below $300 a year, while California leads in high property taxes, with areas such as Marin County exceeding $10,000.

Sales Tax Considerations

Sales tax rates can significantly impact consumer spending. The states with the highest combined sales taxes are:

• Louisiana: 10.12%
• Tennessee: 9.56%
• Arkansas: 9.46%
• Washington: 9.43%
• Alabama: 9.43%

Income Tax Landscape

Income tax rates can greatly influence where individuals choose to live. States with the highest rates include:

• California: 13.3% for high earners
• Hawaii: 11%
• New York: 10.9%
• New Jersey: 10.75%
• Oregon: 9.9%

Conclusion

The taxation landscape in the United States is complex and varies widely across states. Understanding the nuances of tax burdens can assist individuals in making informed decisions regarding their finances and potential relocation. For a detailed look into specific state taxes, further exploration of resources like WalletHub and the Tax Foundation is suggested.