Best And Worst States In The U.S. Taxing System

Do you wish to know the best and worst states in the U.S. taxing system? This article is your ultimate guide. So, let’s begin.

taxing system

Tax is a necessary and compulsory financial charge imposed by a governmental organization to fund various public expenditures and government spending. It is compulsory because failure to pay is very much punishable by law. Countries charge a tax mostly on an individual’s income as well as corporate income; wealth taxes, inheritance taxes, sales taxes, payroll taxes, property taxes…among taxes are also imposed by subunits or countries.

Taxing systems can be placed to pay for common, public, or national needs and government functions. Although, some taxing systems are moderate and considerate; some are just so high.

Coming to the U.S where taxing systems are usually set up or placed on both federal and state levels, some states in the US have a very high taxing system probably the worst while some states have very low taxing systems. This might be because federal and state taxes are separate and have the authority to charge taxes individually; that is, the federal government does not have any rights to interfere with state taxation.

Each state has its taxing system, which is different from the other states, thus, the difference in their tax rates. Some states in the U.S do not levy some taxes whereas others do.

In this blog post, we would be unveiling some states in the U.S with the worst taxing system and also those with the best and lowest taxing system. To get the best tax treatment, you might want to head West to Alaska, Washington, Arizona, or Nevada and avoid the New York City metro area.

Below are the best and worst taxing system in the U.S

Best States in the U.S taxing system

Worst states in U.S taxing system

Wyoming Illinois
Nevada Connecticut
Florida New York
Alaska New Jersey
South Dakota Lowa
New Hampshire Pennsylvania
Tennessee Wisconsin (WI)
Washington Nebraska
North Dakota Kansas
Arizona Ohio

In no particular order; starting with the best,

Let’s dig right in..

The Best States In The Us Taxing System

The best and tax friendliest state is Wyoming;

WYOMING

This is a state with no income tax, they don’t levy a gross receipt tax or a corporate income tax. It has a low tax on petrol because it receives revenue from oil and mineral rights. It has the third-lowest sales tax rate. This sales tax rate is about 5.32%. It also has the ninth-lowest on property tax in the nation.

NEVADA

This state has no individual, corporate, or franchise income tax, but as of 2020 it imposed a gross receipt tax. With an annual property tax limited to a 3% increase on homeowners and being among the lowest property tax rates; this state is considered to have one of the best taxing systems in the U.S.

FLORIDA

This state has a low unemployment insurance tax as well as no individual income tax. Besides, it has one of the lowest taxing systems.

ALASKA

This state has no state-level sales tax or individual income tax, thus considered one of the best.

SOUTH DAKOTA

This is another state that levies no gross receipts tax or corporate income tax. It also does not have an individual income tax.

NEW HAMPSHIRE

This state has no state-level sales tax. Also, it doesn’t tax retirement or social security benefits income. It also has no tax on equipment, inventory, or machinery.

TENNESSEE

This state has no state income tax. Though it now has the highest sales tax in the country, it still has one of the best and lowest taxing system.

WASHINGTON

This state levies no individual income tax. They have easy tax compliance for those who do not own any business. Their workers have the 16th lowest state and local tax burden.

NORTH DAKOTA

This state is among the lowest and has a progressive income tax. Its sales tax is below the national average, no wonder it is considered to have one of the best taxing systems in the U.S.

The last but not the least is;

ARIZONA

This state has income and property tax rates below average. It also has the fourth-lowest gas tax rate and it is tax-friendly for retirees.

Next up…

The Worst States In The Us Taxing System

First on the list with the worst taxing system is Illinois.

ILLINOIS

With a personal income tax rate of 4.95%, all residents who receive income must pay the state income tax. It levies the second-highest property tax and 8.78% state and local sales tax rate.

CONNECTICUT

This state has some of the highest property taxes in the US. It levies income taxes, estate, sales, and inheritance tax.

NEW YORK

This state has one of the highest individual income tax rates in the nation it is the third highest and also has a high property tax rate.

NEW JERSEY

While New York has the third-highest, New Jersey has the highest individual income tax rate and also a very high property, corporate (about 10.5% as of 2020), and sales tax rates. This state levies an inheritance tax and also has the second-highest corporate income tax rate. It charges the highest on property tax of about $2,330 per $100,000 in home value in the country.

LOWA

This state as of 2020 has a very high corporate tax of 12% making it one of the states with the worst taxing system.

PENNSYLVANIA

It has a high-income tax rate and the second-highest gas tax rates at 58.7 cents per gallon. It levies an income tax, property tax, sales tax, fuel taxes, taxes on tobacco, vapour products, and alcohol. It also levies gift and inheritance taxes.

WISCONSIN (WI)

It levies sales tax, has a high-income tax, and a very high property tax rate precisely the fifth highest in the United States. It also levies a state income tax of about 4.0% rate.

NEBRASKA

This state has the seventh-highest property tax rate in the U.S. with a home value of $2,506 per $137,300. It also levies inheritance tax, sales taxes, and state income tax.

KANSAS

It has a 3.1% state income tax, 8.68% average state, and local sales tax, which is considered the eighth highest in the United States. It levies a very high property tax rate.

The last on the list is,

OHIO

Though it has a friendly retirement tax rate, Ohio is one of the states in the U.S. with the worst taxing system. It levies 13.05% state and local tax rate. The state’s income tax is the eighth highest, while it’s real estate tax rate is the thirteenth highest in the nation.

 

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