Where you live has a significant impact on whether you pay less taxes (or more) to local, state and federal governments each year. A new survey from GOBankingRates reveals that different tax factors in each state can cost (or save) a typical resident a lot of money — as much as $12,589 a year. To find out the total burden the typical taxpayer faces, GOBankingRates surveyed the combined costs of income taxes, property taxes, sales taxes and gas taxes in each state. The median per capita personal income is $44,891, according to figures from the Bureau of Economic Analysis, and the total median taxes paid is $10,116. That means that typically, about 22.5 percent of an American taxpayer’s incomes goes to the government.
Depending on where you live, your salary and the tax deductions you qualify for, your total tax costs could be far above or below these figures. Click through to see if your state has some of the lowest taxes, or if you can expect to pay much more to the government each year.
Methodology: To generate the total tax bill in each state, GOBankingRates looked at four key taxes Americans face: income taxes, property taxes, gas taxes and sales taxes. Income tax bills reflect both state and federal income taxes, and were based on the 2014 per capita personal income reported in each state by the Bureau of Economic Analysis and generated using the calculator at TaxFormCalculator.com. Property tax bills were calculated using the mean effective property taxes in each state as reported by the Tax Foundation, applied to the state’s median home value reported by the Zillow Home Value Index. Gas tax bills are based on per-gallon tax figures from the American Petroleum Institute, multiplied by an assumed gas usage of filling a 12-gallon gas tank each week for a year. Sales tax bill was calculated by applying the average combined state and local sales tax rates reported by the Tax Foundation to the average $84 self-reported daily spending, as reported by a Gallup Poll, for 365 days of the year. These four tax bills were added together to find the combined total dollar amount of taxes paid in each state, and states were ranked according to this figure.