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How Does Your State's Taxes Compare?

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Considering state and local taxes vary so much, it can be difficult to compare how your place of residence does with a neighboring state. The Tax Foundation's annual Facts & Figures ranks states based on state tax rates, collections, burdens and more.

Considering state and local taxes vary so much, it can be difficult to compare how your place of residence does with a neighboring state.

The Tax Foundation has been compiling and printing its annual Facts & Figures since 1941. The report compares state tax rates, collections burdens and more, and it is mailed to every state legislator and governor.

“It’s vital that both lawmakers and taxpayers know where their states stand on key tax and spending measures,” economist and report editor Scott Drenkard said in a statement. “States are competing fiercely to attract new jobs and investment, and millions of taxpayers are considering where they might want to move, take a new job, or retire. People need to know where their states stand in relation to the rest of the country.”

Some of the comparisons are state and local tax burden as a percentage of state income; state individual income tax rates; state and local sales tax rates; and tax rates on items such as cigarettes, beer and groceries.

Some standout states were Wyoming, with the best state business climate, and Alaska, with the lowest state and local tax burden. In 2012 Tennessee had the earliest Tax Freedom Day, which represents how long Americans must work into the year before they earn enough money to pay off all federal, state and local taxes.

According to fiscal year 2010 data, New York has the worst state and local tax burden as a percentage of state income at 12.8% and its neighbors New Jersey and Connecticut are close behind with 12.4% and 12.3%, respectively.

Below is the list of states with the worst business tax climates along with the five component taxes that factor into the overall rank.

10. Maryland

Corporate tax rank: 15

Independent income rank: 45

Sales tax rank: 8

Unemployment insurance tax rank: 46

Property tax rank: 40

9. Iowa

Corporate tax rank: 49

Independent income rank: 33

Sales tax rank: 24

Unemployment insurance tax rank: 34

Property tax rank: 37

8. Wisconsin

Corporate tax rank: 32

Independent income rank: 46

Sales tax rank: 15

Unemployment insurance tax rank: 23

Property tax rank: 33

7. North Carolina

Corporate tax rank: 29

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Independent income rank: 43

Sales tax rank: 47

Unemployment insurance tax rank: 5

Property tax rank: 36

6. Minnesota

Corporate tax rank: 44

Independent income rank: 44

Sales tax rank: 35

Unemployment insurance tax rank: 40

Property tax rank: 26

5. Rhode Island

Corporate tax rank: 42

Independent income rank: 37

Sales tax rank: 25

Unemployment insurance tax rank: 50

Property tax rank: 46

4. Vermont

Corporate tax rank: 43

Independent income rank: 47

Sales tax rank: 14

Unemployment insurance tax rank: 22

Property tax rank: 48

3. California

Corporate tax rank: 45

Independent income rank: 49

Sales tax rank: 40

Unemployment insurance tax rank: 16

Property tax rank: 17

2. New Jersey

Corporate tax rank: 40

Independent income rank: 48

Sales tax rank: 46

Unemployment insurance tax rank: 24

Property tax rank: 49

1. New York

Corporate tax rank: 23

Independent income rank: 50

Sales tax rank: 38

Unemployment insurance tax rank: 45

Property tax rank: 45

See the full report here.


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