5 States Where You’ll Pay the Most Taxes (And 5 Where You’ll Pay the Least)

Will you get a break this tax season — or will your state’s tax rate break you?
Updated May 8, 2024
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Tax season has arrived, and both individual taxpayers and couples filing jointly are pulling together all the documents they need to prepare their returns.

But how much will you end up paying in state and federal taxes? Whether you can keep more cash in your wallet depends partially on where you live and how you are filing.

Recently, FinanceBuzz analyzed data from the U.S. Census Bureau and combined it with federal and state tax rates to calculate the tax burden residents face in each state as a percentage of median annual income.

Here are the states with the highest and lowest rates for individual taxpayers, followed by the rankings for couples filing jointly.

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1. Massachusetts: 23.67%

jovannig/Adobe Boston Massachusetts

If you hope to retire early, Massachusetts won’t make it easy on your efforts to build a nest egg. The Bay State leads all U.S. states with the highest tax burden for individual taxpayers.

According to the Pew Charitable Trusts, the state relies heavily on state income tax, with 56.1% of its revenue in fiscal year 2022 coming from the tax. That puts it behind only Oregon and New York.

2. Oregon: 23.37%

jbentley09/Adobe sunset in downtown portland oregon

Oregon relies heavily on its personal income tax to generate revenue for the state.

Pew says 62.3% of the state’s income comes from taxes on personal income. On the other hand, it’s one of five states with no sales tax.

3. Connecticut: 23.19%

f11photo/Adobe downtown hartford city

In addition to its high income tax rate, Connecticut is also not tax-friendly for retirees.

The state partially taxes Social Security income and fully taxes withdrawals from retirement accounts.

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4. Hawaii: 22.79%

Alexander Demyanenko/Adobe Kauai Island

In addition to high taxes, Hawaii also has the highest cost of living among U.S. states, according to the Missouri Economic Research and Information Center.

The state’s remote location and reliance on imported goods pushes costs higher for residents.

5. Maryland: 22.58%

SeanPavonePhoto/Adobe baltimore maryland usa skyline

Those filing as individuals in Maryland face a high tax burden. However, there is a silver lining for some retirees worried about taxes.

The state doesn’t tax Social Security income and only partially taxes retirement fund withdrawals and public pension income. On the other hand, private pension income is fully taxed.

States with the lowest tax burdens

mavoimages/Adobe Smiling female entrepreneur going through paperwork

While tax burdens are sky-high in some states, others give taxpayers a big break. Here are the places where individual taxpayers pay the least in taxes.

1. Florida: 15.75%

SeanPavonePhoto/Adobe beautiful tampa florida skyline at sunset

Florida has the lowest tax burden for individual filers among all the states. In fact, it's one of nine states that has no tax on income whatsoever.

However, not every tax in Florida is low. Florida’s property tax burden is higher than that of states such as Maryland and Hawaii, according to Wallethub. Those two states have much higher taxes on income.

2. Tennessee: 15.77%

jdross75/Adobe Gatlinburg TN cityscape

Tennessee also has no state income tax. However, watch out for the state’s sales taxes. General sales taxes in the Volunteer State account for 56.9% of the state’s revenue.

3. Nevada: 15.78%

SeanPavonePhoto/Adobe Las Vegas Nevada USA Skyline

Nevada has no state income tax and looks to other sources for its revenue. For example, the state relies on taxes from gambling and a high sales tax for revenue.

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4. South Dakota: 15.78%

Jez Campbell/Adobe sunset on sylvan lake

South Dakota also has no state income tax. But shoppers need to watch their wallets in the Mount Rushmore State.

A large share of the state’s tax revenues comes from sales taxes — 61.6% — which could make it a costlier place to live if you are a spendthrift.

5. Texas: 15.99%

f11photo/Adobe Dallas Texas cityscape with blue sky at sunset

Texas rounds out the list of states with low tax burdens that are largely due to not having an income tax.

Texas relies heavily on sales tax instead, with 59.4% of the state’s revenue coming from sales taxes, according to Pew.

Tax burden for couples

bnenin/Adobe couple doing finances at home

Taxes for couples who file jointly are calculated differently than taxes for individuals.

Here are the top five most expensive states and their rates for couples filing jointly:

  • Massachusetts: 23.49%
  • Hawaii: 23.34%
  • Connecticut: 23.17%
  • Maryland: 22.83%
  • Oregon: 22.57

Here are the top five least expensive states and their rates for couples filing jointly:

  • Tennessee: 15.55%
  • Florida: 15.64%
  • Wyoming: 15.66%
  • Nevada: 15.73%
  • South Dakota: 15.77%

Bottom line

panitan/Adobe frustrated man working while holding a pen

Living in a place with low taxes is a key advantage if you want to build wealth. So, it’s important to consider tax rates when deciding where to settle down.

You can save money living in a state with low income taxes, but you will also want to factor in sales or other types of taxes.

Also, remember that tax laws can vary from state to state in terms of how much retirement income — including income from 401(k) plans and IRAs, Social Security, and pensions — is subject to taxes.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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