State-by-State Guide to Taxes

From Kiplinger, October, 2017 (excerpts)

Compare state tax rates and rules -- on income, ordinary purchases, gas, sin products, property, and more -- across the U.S.

Click on any state in the map below for a detailed summary of state taxes on income, property, and everything you buy. View additional maps below, including our picks for the 10 most tax-friendly and the 10 least tax-friendly states in the U.S. (Retirees, visit our Retiree Tax Map to learn how each state taxes different kinds of retirement income and to discover special tax breaks for seniors.)

Hover over or click on any state in the map for the option to add the state to your compare list to quickly see how selected states stack up.

LINK: VIEW STATE COMPARE LIST

Hawaii: The Bottom Line--Least Tax-Friendly

The Aloha State, one of Kiplinger's top ten least tax-friendly states, is known for its high cost of living — and high taxes. Temporary income tax rate hikes expired in 2016, lowering the top rate from 11% to 8.25%. (Editor’s Note: The Legislature just bumped it back up.) But that top rate kicks in at just $48,000 for individual filers. Also, don't be fooled by Hawaii's 4.35% average sales tax rate. Since it's due on virtually all transactions, the pocketbook effect is severe. A ray of sunshine: Property taxes as a percentage of home value are the lowest in the U.S.

Sales Tax

4%. Hawaii employs a General Excise Tax that applies to a wide range of goods and services. Only prescription drugs and prostheses are exempt. Oahu has a county surcharge tax of 0.5% to pay for a mass transit system, making the average combined rate 4.35%, as calculated by the Tax Foundation. Complicating matters further, the tax is calculated on the vendor rather than the buyer, which means consumers pay a few percentage points more in practice.

Income Tax Range

• Low: 1.4% (on taxable income up to $4,800 for married couples filing jointly; on up to $2,400 for married couples filing separately and individual filers)
• High: 8.25% (on taxable income over $96,000 for married couples filing jointly and surviving spouses; on over $48,000 for married couples filing separately and individual filers)
• Effective income tax rate: 6.5%/individual, 7.1%/joint

See Kiplinger.com’s Retiree Tax Map to learn how Hawaii taxes Social Security income and other forms of retirement income and for details on tax breaks for seniors in Hawaii.

Motor Fuel Taxes

• Gasoline: $0.44 per gallon.
• Diesel: $0.41 per gallon.

Property Taxes

The median property tax on Hawaii's median home value of $515,300 is $1,406.

Vehicle Taxes

State excise tax is due on vehicle sales. Vehicles are also taxed by weight at registration. (Example: A 4,000-pound vehicle registered in Honolulu County would owe $200 to the county and $75 to the state.)

Sin Taxes

• Cigarettes and little cigars: $3.20 per pack
• Large cigars: 50% of the wholesale price 
• Other tobacco products: 70% of the wholesale price
• Beer: $0.93 per gallon ($0.54 for draft beer)
• Wine: $1.38 per gallon ($2.12 if sparkling)
• Liquor: $5.98 per gallon

Travel Taxes

• Hotel: 9.25% state lodging tax. Excise tax is also due. In Honolulu, this adds up to 13.75%.  (Editor’s Note: The Legislature just jacked TAT up to 10.25%)
• Rental cars: $3 per day, plus excise tax.

Taxes On Wireless Service -- 7.6%

Inheritance and Estate Taxes

Hawaii has no inheritance tax. It does have an estate tax, with the exemption matched to federal thresholds ($5.49 million in 2017). Estate tax rates range from 10% to 15.7%.

Oddball Tax

Not a tax, but a deduction: The "Exceptional Tree" act allows homeowners and others to deduct up to $3,000 in expenses per tree for a tree that's big, old, rare or some combination thereof. The work must be done by a certified arborist, the tree itself has to be certified, and the deduction can be claimed only every third year.

Read: Kiplinger Hawaii

HNN: Hawaii's high taxes add to pricey cost of living, report says