The U.S. States With the Lowest (and Highest) Tax Rates

If filing taxes in your own state has you investigating the tax policies of other states, we’ll make it easy on you: Move to Alaska.

According to a study by WalletHub, the largest state in the U.S. happens to have the lowest tax rates of all 50 states (and Washington, D.C.). A lot went into that determination. WalletHub’s researchers compiled stats on four different kinds of taxes—real estate, property, income, and sales and excise—and used data from the median U.S. household (like income, home value, and car value) to figure out how much people in each state generally spend on taxes.

Based on this ranking system, Alaska’s total state and local tax rates on the median U.S. household are 6.73 percent, and that hypothetical household pays just under $5100 on those taxes per year. Delaware and Wyoming round out the top three, with 7.18 and 7.39 percent rates, respectively. On the opposite end of the spectrum is Illinois, where the tax rate is 16.51 percent, and the median household is taxed nearly $12,500 annually. New York, Connecticut, New Jersey, and Pennsylvania round out the bottom five, all with rates between 14 and 15 percent.

States with no income tax—Washington and Texas among them—don’t necessarily come out on top. As WalletHub points out, sales and excise taxes take a good 8 percent chunk out of the median Washington resident’s annual income; and Texans shell out 1.63 percent of their annual income on real estate taxes. (Washington is 38th in the ranking; Texas is 42nd.)

In the chart below you can see all the states ranked by state and local tax rates, plus what the median U.S. household pays annually in each state. It’s worth perusing WalletHub’s full study for more intel—you can, for example, see the rankings adjusted based on each state’s cost of living. (In that breakdown, Idaho tops the list, and Alaska falls to seventh place.)