Taxes — States with the Highest & Lowest Rates
Published March 24, 2026 at 1:29 PM · News Releases and Bulletins
Depending on when you read this, the April 15th tax deadline day is about three weeks away. It’s a pretty stressful time for most of us.
On average, each U.S. household pays about $14,000 a year in federal income taxes. Add state and local taxes to that, and the tax burden for most of us is significant. A new report says those living in the most expensive states pay almost twice as much as those living in the cheapest states.
And just because a state doesn’t have an income tax, that doesn’t mean the citizens dwelling within pay far fewer taxes than those states with an income tax. The PIA Western Alliance state of Washington is a good example. Residents of the Evergreen State pay an average of 9% of their annual income on sales taxes and excise taxes.
WalletHub recently looked at taxes in all 50 states and the District of Columbia. Spokesman Chip Lupo said the WalletHub research found which denizens of what states pays the most and who pay the least.
“Every year during tax season, Americans are reminded of just how much of their hard-earned income isn’t theirs to keep,” Lupo said. “Living in the right state can ease the stress of tax time, though, as taxpayers in the least expensive states pay less than half as much as those in the most expensive states.”
Here’s what the WalletHub study assumes:
- The average annual income is $81,211
- The average taxpayer owns a home valued at $332,700
- The value of the average taxpayer’s automobile is $29,100
- The average of state at local tax rates is 11.02%
These are the lowest taxed states in the Union. Four of them — Alaska, Idaho, Montana and Nevada — are in the 10 lowest taxed in the U.S.
1. Alaska
Effective total state and local tax rates on median US household: 6.94%
Annual state and local taxes on median US household; $5,634
Percent of difference between state and US average: -37.02%
Annual state and local taxes on median state household: $6,153
Adjusted overall rank based on cost of living index: 8
2. Delaware
3. Wyoming
4. Idaho
Effective total state and local tax rates on median US household: 7.65%
Annual state and local taxes on median US household: $6,215
Percent of difference between state and US average: -30.52%
Annual state and local taxes on median state household: $6,452
Adjusted overall rank based on cost of living index: 1
5. Montana
Effective total state and local tax rates on median US household: 7.88%
Annual state and local taxes on median US household: $6,398
Percent of difference between state and US average: -28.47%
Annual state and local taxes on median state household: $6,322
Adjusted overall rank based on cost of living index: 4
6. South Carolina
7. Colorado
8. Nevada
Effective total state and local tax rates on median US household: 8.76%
Annual state and local taxes on median US household; $7,113
Percent of difference between state and US average: -20.49%
Annual state and local taxes on median state household: $7,446
Adjusted overall rank based on cost of living index: 13
9. Florida
10. District of Columbia
The rest of the Western Alliance states
14. California
Effective total state and local tax rates on median US household: 9.83%
Annual state and local taxes on median US household; $7,987
Percent of difference between state and US average: -10.72%
Annual state and local taxes on median state household: $12,031
Adjusted overall rank based on cost of living index: 37
15. Arizona
Effective total state and local tax rates on median US household: 9.91%
Annual state and local taxes on median US household; $8,052
Percent of difference between state and US average: -9.99%
Annual state and local taxes on median state household: $8,282
Adjusted overall rank based on cost of living index: 19
22. Oregon
Effective total state and local tax rates on median US household: 10.68%
Annual state and local taxes on median US household; $8,675
Percent of difference between state and US average: -3.02%
Annual state and local taxes on median state household: $10,018
Adjusted overall rank based on cost of living index: 35
28. New Mexico
Effective total state and local tax rates on median US household: 11.11%
Annual state and local taxes on median US household; $9,022
Percent of difference between state and US average: 0.86%
Annual state and local taxes on median state household: $7,062
Adjusted overall rank based on cost of living index: 27
36. Washington
Effective total state and local tax rates on median US household: 12.02%
Annual state and local taxes on median US household; $9,766
Percent of difference between state and US average: 9.17%
Annual state and local taxes on median state household: $13,148
Adjusted overall rank based on cost of living index: 40
40. Hawaii
Effective total state and local tax rates on median US household: 12.36%
Annual state and local taxes on median US household; $10,039
Percent of difference between state and US average: 12.22%
Annual state and local taxes on median state household: $13,590
Adjusted overall rank based on cost of living index: 51
The bottom 10 — or the highest taxed states in the Union:
51. Illinois
50. New York
49. Connecticut
48. Pennsylvania
47. New Jersey
46. Kansas
45. Nebraska
44. Iowa
43. Ohio
42. Texas
The PIA Western Alliance state of California has the highest gas tax in the country with the PIA Western Alliance state of Washington ranking the third highest. The Lowest gas taxes in the country belong to the PIA Western Alliance states of Alaska, Hawaii, New Mexico and Arizona who rank 1, 2, 3 and 4 respectively.
Red states have lower taxes than blue states.
- Red states: 24.45
- Blue states: 29.40
Here are the state and local tax burden breakdowns in the PIA Western Alliance states. The list includes their ranking nationally:
1. Alaska
Effective real estate tax: 4.53%
Real estate tax rank: 36th in the nation at $3,678
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the country — $0
Effective income tax rate: 0.00%
Income tax rank: 1st in the country — $0
Effective sales and excise tax rate: 2.41%
Sales and excise tax rank: $1,956
Effective total state and local tax rates on median US household income: 6.94%
4. Idaho
Effective real estate tax: 1.99%
Real estate tax rank: 7th in the U.S. — $1,620
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the U.S. — $0
Effective income tax rate: 1.97%
Income tax rank: 28th in the country — $1,600
Effective sales and excise tax rate: 3.69%
Sales and excise tax rank: 8th in the country — $2,995
Effective total state and local tax rates on median US household income: 7.65%
5. Montana
Effective real estate tax: 2.94%
Real estate tax rank: 20th in the U.S. — $2,384
Effective vehicle property tax rate: 0.41%
Vehicle property tax rank: 33rd in the nation — $329
Effective income tax rate: 3.11%
Income tax rank: 41st in the country — $2,524
Effective sales and excise tax rate: 1.43%
Sales and excise tax rank: 1st in the U.S. — $1,161
Effective total state and local tax rates on median US household income: 7.88%
8. Nevada
Effective real estate tax: 1.91%
Real estate tax rank: 3rd in the nation — $1,549
Effective vehicle property tax rate: 0.76%
Vehicle property tax rank: 44th in the U.S. — $617
Effective income tax rate: 0.59%
Income tax rank: 10th in the country — $481
Effective sales and excise tax rate: 5.5%
Sales and excise tax rank: 37th in the U.S. — $4,465
Effective total state and local tax rates on median US household income: 8.76%
14. California
Effective real estate tax: 2.86%
Real estate tax rank: 17th in the U.S. — $2,320
Effective vehicle property tax rate: 0.23%
Vehicle property tax rank: 28th in the country — $189
Effective income tax rate: 0.92%
Income tax rank: 11th in the nation — $751
Effective sales and excise tax rate: 5.82%
Sales and excise tax rank: 42nd in the nation — $4,726
Effective total state and local tax rates on median US household income: 9.83%
16. Arizona
Effective real estate tax: 1.95%
Real estate tax rank: 4th in the country — $1,585
Effective vehicle property tax rate: 0.60%
Vehicle property tax rank: 38th in the U.S. — $489
Effective income tax rate: 1.00%
Income tax rank: 12th in the nation — $813
Effective sales and excise tax rate: 6.36%
Sales and excise tax rank: 43rd in the U.S. — $5,165
Effective total state and local tax rates on median US household income: 9.91%
22. Oregon
Effective real estate tax: 3.32%
Real estate tax rank: 28th in the nation — $2,700
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the U.S. — $0
Effective income tax rate: 5.34%
Income tax rank: 51st in the country — $4,333
Effective sales and excise tax rate: 2.02%
Sales and excise tax rank: 4th in the U.S. — $1,642
Effective total state and local tax rates on median US household income: 10.68%
28, New Mexico
Effective real estate tax: 2.86%
Real estate tax rank: 18th in the country — $2,231
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the U.S. — $0
Effective income tax rate: 1.31%
Income tax rank: 14th in the nation — $1,065
Effective sales and excise tax rate: 6.94%
Sales and excise tax rank: 46th in the U.S. — $5,636
Effective total state and local tax rates on median US household income: 11.11%
36. Washington
Effective real estate tax: 3.31%
Real estate tax rank: 27th in the U.S. — $2,685
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the country — $0
Effective income tax rate: 0.00%
Income tax rank: 1st in the nation — $0
Effective sales and excise tax rate: 8.72%
Sales and excise tax rank: 51st in the U.S. — $7,081
Effective total state and local tax rates on median US household income: 12.02%
40. Hawaii
Effective real estate tax: 1.09%
Real estate tax rank: 1st in the nation — $888
Effective vehicle property tax rate: 0.00%
Vehicle property tax rank: 1st in the U.S. — $0
Effective income tax rate: 3.71%
Income tax rank: 48th in the country — $3,016
Effective sales and excise tax rate: 7.55%
Sales and excise tax rank: 48th in the U.S. — $6,135
Effective total state and local tax rates on median US household income: 12.36%
Source link: WalletHub — https://bit.ly/41s76T0