2018 Tax Rates by State

WalletHub, Mar 13, 2018

Tax season can be stressful for the millions of Americans who owe money to Uncle Sam. Every year, the average U.S. household pays more than $5,700 in federal income taxes, according to the Bureau of Labor Statistics. And while we’re all faced with that same obligation, there is significant difference when it comes to state and local taxes. Taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states.

Surprisingly, though, low income taxes don’t always mean low taxes as a whole. For example, while the state of Washington’s citizens don’t pay income tax, they still end up spending over 8% of their annual income on sales and excise taxes. Texas residents also don’t pay income tax, but spend 1.86% of their income on real estate taxes, one of the highest rates in the country. Compare these to California, where residents owe a little over 4% of their income in sales and excise taxes, and just 0.79% in real estate tax.

As this year’s tax-filing deadline, April 17, comes closer, it’s fair to wonder which states give their taxpayers more of a break. WalletHub searched for answers by comparing state and local tax rates in the 50 states and the District of Columbia against national medians. To illustrate, they calculated relative income-tax obligations by applying the effective income-tax rates in each state and locality to the average American’s income.

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Hawaii

• 20 -- Overall Rank (1=Lowest)
• 10.33% -- Effective Total State & Local Tax Rates on Median U.S. Household*
• $5,762 -- Annual State & Local Taxes on Median U.S. Household*
• -3.96% -- % Difference Between State & U.S. Avg.**
• $8,277 -- Annual State & Local Taxes on Median State Household***
• 51 -- Adjusted Overall Rank (based on Cost of Living Index) (51=Highest)
• 48 -– Gasoline Taxes (4th-highest)
• 47 --  Cigarette taxes (4th-highest)

State & Local Tax Breakdown

All effective tax rates shown below were calculated as a percentage of the mean third quintile U.S. income of $55,754 and based on the characteristics of the Median U.S. Household*.

Hawaii

• 0.90% -- Effective Real-Estate Tax Rate 
• 1 -- Real-Estate Tax Rank ($501)
• 0%--Effective Vehicle Property Tax Rate
• 1 -- Vehicle Property Tax Rank ($0)
• 3.85% -- Effective Income Tax Rate
• 47 -- Income Tax Rank ($$2,147)
• 5.59% -- Effective Sales & Excise Tax Rate
• 46 -- Sales & Excise Tax Rank ($3,115)
• 10.33% Effective Total State & Local Tax Rates on Median U.S. Household*