These states have the highest and lowest tax burdens, study finds | Best States


As tax season kicks off this week, a new report suggests the experience will be different depending on where you live. Oregon and Florida were identified as having the highest and lowest tax burdens for individuals, respectively, according to financial news website FinanceBuzz.

The results, released Jan. 20, cover the 2021 tax year and show most northeastern and western states have the highest charges. Several Southern states have low tax burdens, but there was not as much localization bias in this case.

FinanceBuzz used US Census Bureau median income data for individuals and couples, applied state and federal deductions and exemptions to these amounts, and used 2021 federal and state rates to determine the amount of taxes that people need in every state. Analysts then divided that total amount owed by median annual income to determine each state’s effective tax rate. FinanceBuzz used statistics from the Tax Foundation and state tax and revenue service websites, in addition to the Census Bureau.

The year in photos: 2021

Oregon’s effective personal tax rate of 23.37% – just ahead Massachusetts and Connecticut — was buoyed by its effective state tax rate of 7%, which was by far the highest among the states. Minnesota, Utah and Hawaii were also in the top 10 for total load. Other East Coast states that had the highest tax burdens include Maryland, New York, New Jersey and Virginia. FinanceBuzz’s ranking for couples’ deposits was similar, with Massachusetts ranked first ahead of Oregon, and Delaware enter the top 10.

Florida — one of nine states with no state income tax, all of which rank in the bottom 10 on FinanceBuzz’s list of burdens — had an effective rate of 15.52%. Tennessee, Nevada, South Dakota and Texas all ranked just behind Florida, with rates below 16%. The couples’ rankings were again comparable, with some rearrangements: Tennessee had the lowest burden, just ahead of Florida.


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