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The Most and Least Taxed States in the U.S.

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Managing taxes and finances as a self-employed professional, small business owner or even an employee can be tricky. Along with the myriad of federal tax forms you have to navigate, each state has its own requirements and processes these professionals have to follow.

Because of these different requirements, the state in which you live can have a big impact on your tax burden and subsequently how much money you earn. While federal tax rates may be the same for all workers, state income and sales taxes can increase or decrease the buying power of your hard-earned cash.

To help see where you and your state stand among the others, we’ve compiled a ranking of the most and least taxed states in the U.S. The rankings are based on 2015 state income tax rates for the highest bracket of single-filers with no dependents, weighed against the sales tax rate for each respective state.

Where does your home state land?

Top 5 Least Taxed States

If you’re a resident of Alaska or New Hampshire, your money can go a long way, as they’re the only two states that enjoy no state income or sales tax. Wyoming and South Dakota also have no state income tax, but their 4% sales tax puts them at a tie for third for the least taxed states. Rounding out the top five is Florida, which has a state sales tax of 6%.

States that fall outside of the top five but still enjoy no state income tax include Texas, Washington, Nevada and Tennessee.

Top 5 Most Taxed States

Not surprisingly, California claims the top spot as the most taxed state in the Union. With a whopping max income tax rate of 13.3%, along with a sales tax rate of 7.5%, California boasts the highest rates for both categories. A somewhat distant second is Minnesota, while Hawaii comes in just below the Gopher State with the second highest income tax rate of 11% and a sales tax rate of 4%. Rounding out the top five are New Jersey and Iowa.

Methodology

Rates based on normalized and combined rates for single filers with no dependents or deductions. Income tax is weighted 70%; sales tax at 30%. Data from TaxFoundation.org. Note: Some states have additional income tax rates for dividends and investment income, and jurisdictions within states may add local sales tax; both were omitted from this study.

Full Rankings

Rank State Income Tax Sales Tax
1 New Hampshire 0 0
2 Alaska 0 0
3 Wyoming 0 4
4 South Dakota 0 4
5 Florida 0 6
6 Texas 0 6.25
7 Washington 0 6.5
8 Nevada 0 6.85
9 Tennessee 0 7
10 North Dakota 3.22 5
11 Pennsylvania 3.07 6
12 Colorado 4.63 2.9
13 Indiana 3.4 7
14 Delaware 6.6 0
15 Alabama 5 4
16 Michigan 4.25 6
17 Montana 6.9 0
18 Arizona 4.54 5.6
19 Utah 5 4.7
20 New Mexico 4.9 5.13
21 Oklahoma 5.25 4.5
22 Kansas 4.8 6.5
23 Virginia 5.75 4.3
24 Illinois 5 6.25
25 Louisiana 6 4
26 Georgia 6 4
27 Missouri 6 4.23
28 North Carolina 5.8 4.75
29 Ohio 5.39 5.75
30 Massachusetts 5.2 6.25
31 Mississippi 5 7
32 Maryland 5.75 6
33 Kentucky 6 6
34 Rhode Island 5.99 7
35 West Virginia 6.5 6
36 Nebraska 6.84 5.5
37 Connecticut 6.7 6.35
38 South Carolina 7 6
39 Arkansas 7 6.5
40 Wisconsin 7.65 5
41 Oregon 9.9 0
42 Idaho 7.4 6
43 Maine 7.95 5.5
44 New York 8.82 4
45 DC 8.95 5.75
46 Vermont 8.95 6
47 Iowa 8.98 6
48 New Jersey 8.97 7
49 Hawaii 11 4
50 Minnesota 9.85 6.88
51 California 13.3 7.5
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