“[W]hen we call something a ‘burden’ in Facts & Figures it measures the amount of taxes that are borne by people in that state,” said Scott Drenkard, an economist at the Tax Foundation. The report is entitled, Facts & Figures: How Does your State Compare?
“This measure accounts for economic impacts of taxation that shift the cost of government away from taxpayers in one state and on to taxpayers in another state,” he said.
According to the report, Alaska had the lowest state and local tax burden as a percentage of income at 6.3 percent in fiscal year 2009. Nevada in second and South Dakota in third had 7.5 percent and 7.6 percent respectively.
Coming in fourth and fifth were Tennessee (7.6 percent) and Wyoming (7.8 percent). Texas had the sixth lowest state and local tax burden in fiscal year 2009 with 7.9 percent.
Adversely, New Jersey, New York, and Connecticut, in that order, had the highest state and local tax burdens as a percentage of state income in fiscal year 2009. New Jersey had the highest state and local tax burden as a percent of state income with 12.2 percent; New York had 12.1 percent; and Connecticut had 12 percent.
In fourth and fifth place respectively were Wisconsin with 11 percent and Rhode Island with 10.7 percent.
Wyoming, which had the fifth lowest state and local tax burden in FY 2009, also does not have a state corporate income tax or a state individual income tax. South Dakota and Nevada also do not have a state individual income tax or state corporate income tax.
Alaska, although it does have state corporate income taxes with 10 different brackets, does not have state individual income taxes. It has a 9.4 percent corporate tax rate on income over $90,000.
That figure, however, is not the highest ranked state corporate income tax. Three states (Iowa, Pennsylvania, and Illinois) and Washington, D.C. have higher corporate tax rates. Iowa, for example, has the highest state corporate tax rate in the top bracket with a 12 percent tax on income over $250,000.
California, which ranks second behind Hawaii, has a 10.3 percent income tax rate on income over $1 million. Oregon and Iowa rank third and fourth respectively in that category.
To view some of the complete data, click here to see:
State and Local Tax Burden as percentage of State income (Table 3)
State and Corporate Income Tax Rates (Table 14)
State Individual Income Tax Rates (Table 11)
State Tax Collections Per Capita (Table 5)
Table 21 (Gas tax rates)