Understanding Tax Burden

Tax burden is defined as the total amount of taxes paid by individuals or groups relative to their income. This measurement is crucial in assessing how tax rates vary from state to state, significantly impacting residents’ take-home pay.

2025 Tax Burden Rankings

A recent analysis by WalletHub assessed each state based on property taxes, individual income taxes, and sales and excise taxes as a proportion of personal income. The following are the states categorized by their tax burdens.

Top 10 States with the Lowest Tax Burden

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

Top 10 States with the Highest Tax Burden

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

Examining Property Taxes

Property taxes are assessed at the local level and can vary significantly. According to the Tax Foundation, the national median for property taxes is approximately $1,815. Nonetheless, several states boast notably low property tax rates.

States with the Lowest Property Taxes

• Alaska: Regions such as Northwest Arctic Borough and the Kusilvak Census Area
• Louisiana: Counties including Allen and Avoyelles
• Alabama: Choctaw County

States with the Highest Property Taxes

• California: Marin County
• New Jersey: Counties like Bergen and Essex
• New York: Nassau and Westchester Counties

Sales Taxes Overview

Sales tax rates play a vital role in the overall tax burden. The Tax Foundation reports that combined state and local sales taxes vary greatly across the country.

States with the Highest Sales Taxes

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

Income Tax Rates Across States

Income tax rates vary widely among states and can heavily influence individuals’ financial situations. States with notable income tax rates include:

• California: 13.3% for individuals earning over $1 million
• Hawaii: 11% for single filers over $200,000
• New York: 10.9% for incomes exceeding $1,077,550