Tax Burden by State

	Top Ten	Taxes Paid By Residents, % of Income	Taxes Paid by Non-Residents (%)
1	New Jersey	12.2	20.5
2	New York	12.1	28.6
3	Connecticut	12.0	19.9
4	Wisconsin	11.0	22.1
5	Rhode Island	10.7	29.1
6	California	10.6	17.5
7	Minnesota	10.3	24.5
8	Vermont	10.2	37.9
9	Maine	10.1	35.3
10	Pennsylvania	10.1	23.7
	Average	10.9	25.9
	Lowest Ten
1	New Mexico	8.4	41.0
2	Louisiana	8.2	46.0
3	South Carolina	8.1	34.0
4	New Hampshire	8.0	43.6
5	Texas	7.9	36.6
6	Wyoming	7.8	70.1
7	Tennessee	7.6	36.3
8	South Dakota	7.6	44.0
9	Nevada	7.5	47.5
10	Alaska	6.3	79.5
	Average	7.7	47.9

24/7 Wall Street -- "Different states tax their residences at different levels. In some states, like New Jersey, residents pay 12.2% as a percentage of their income. In others, like Alaska, they pay as little as 6.3% (see table above) . 24/7 Wall St. reviewed a report recently released by the Tax Foundation to identify the states where residents paid the most and least in state and local taxes as a percent of income.

The amount varies widely as not all states have the same sources of revenue. Some get more from business levies than others. Some have a statewide sales tax. Some cities and towns tax property based on value, while others don't. The issue of what people are taxed at the state and local level is complex, among other reasons, because states often receive a large amount of their tax receipts from sources other than the simple payments of state residents.
The most important reason for the variation is that some states generate a significant amount of their tax revenue from businesses and out-of-state residents, thereby minimizing the burden of taxes borne by residents. Alaska, for example, gets 80% of tax receipts from such sources. State residents get the equivalent of a subsidy from some of the world's largest oil companies.


Conversely, states with low out-of-state business receipts must collect a higher percent of taxes from their residents. This is the case in New Jersey, which gets only 20% of its tax receipts from such sources. As a matter of fact, most of the really large companies in the region are on the other side of New Jersey's northeast border in New York State, thereby creating a higher burden on residents.


The Tax Foundation's report divides state tax revenue into two categories: the amount contributed by residents, including income, property and sales tax, and the amount contributed by non-residents, including taxes paid by out-of-state businesses and taxes collected by in-state business and paid by out-of-state residents."

MP: The table above shows that for the ten states with the highest tax burden on residents, the average tax rate as a share of residents' income is 10.9% and they pay 74.1% of the taxes collected; for the ten states with the lowest tax burden on residents, the average tax rate is only 7.7% because almost half of total state taxes are generated from non-residents (47.9%).  

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