How High are State and Local Tax Collections in Your State?

by Janelle Cammenga, Tax Foundation, February 19, 2020

Today’s state tax map shows state and local tax collections per capita in each of the 50 states and the District of Columbia.

Tax collections of $10,717 per capita in D.C. surpass those in any state. The five states with the highest tax collections per capita are New York ($9,073), Connecticut ($7,638), New Jersey ($6,978), North Dakota ($6,665), and Hawaii ($6,640).

The five states with the lowest tax collections per capita are Alabama ($3,370), Tennessee ($3,405), Arizona ($3,472), South Carolina ($3,522), and Oklahoma ($3,544).

Some of these results are less intuitive than others. For example, even though North Dakota ranks fourth for state and local tax collections, the resource-rich state generates a substantial part of its tax revenue from severance taxes on oil and natural gas, which are borne mainly by consumers outside North Dakota. As a result, North Dakota joins the ranks of high-tax states in terms of per capita collections even though the tax burden on North Dakotans is comparatively low. 

It’s worth noting that severance taxes are only one of many examples of the “tax exporting” that states engage in. Travel taxes—such as hotel, car rental, and meal taxes—also disproportionately impact nonvoting nonresidents who have few means of redress.  As a result, states that generate substantial amounts of tax revenue from tourism may also show tax collections per capita that are significantly higher than the actual tax burden that falls on the in-state population.

It is important to keep both legal incidence and economic incidence in mind when evaluating the true costs of any tax.