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How States Stack Up by Individual Income Tax Collections

May 4th 2016
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Busy season may be over but income taxes are perennial. For that reason, and because we’re heading into prime relocation time when people move before the new school year begins, here’s a handy tool to see how states rank by individual income tax collections per person.

According to a recent Tax Foundation report, the majority (91 percent) of state and local income tax revenue goes to state governments, providing 36.5 percent of all state revenue in fiscal year 2013 – the latest data available.

Taxes are lower at the local level, comprising 13.8 percent in the 13 states and District of Columbia that permit local income taxation. They range from almost nothing in Oregon (the report doesn’t state how much that actually is) to almost 32 percent of local revenues in Maryland. Local governments in Indiana, Kentucky, Maryland, New York, Ohio, Pennsylvania, and the District of Columbia collect more than 10 percent of their revenue from individual income taxes, according to the report.

Overall, the rankings are based on what states and the District of Columbia collect per person in combined state and local broad-based taxes on wage and salary income and specific sources of income, such as dividends and interest. The highest? New York, at $2,550. At the bottom? Tennessee, at $40. The next-lowest state is New Hampshire at $75, but then the “low” rankings jump to Arizona at $512, which is the lowest for states that tax wage income.

Among the highest states, most are on the East Coast (especially New England) and the West Coast.

Seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) have no individual income taxes. New Hampshire and Tennessee only tax interest and dividend income. The remaining 41 states and the District of Columbia have broad-based income taxes.

Here’s how the top 10 rank:

1. New York ($2,550)

2. District of Columbia ($2,526) and Connecticut ($2,172)

3. Maryland ($2,061)

4. Massachusetts ($1,919)

5. California ($1,739)

6. Minnesota ($1,651)

7. Oregon ($1,594)

8. New Jersey ($1,359)

9. Virginia ($1,318)

10. (tie) Delaware ($1,283)

10. (tie) Illinois ($1,283)

Related article:

States Take Different Approaches on Income Taxes

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