The wide range of state and local taxes
Saturday, February 22, 2020
Most U.S. taxpayers also must file a state return every spring. Only those of us who live in one of the seven states — Alaska, Florida, Nevada, South Dakota, Washington, Wyoming and my home Texas — don't have to mess with state income tax forms.
Some more local jurisdictions, generally large cities, also levy income taxes.
And most of those other 43 states (and cities et al) plus the District of Columbia also follow the federal April 15 deadline. You can find out whether your filing deadline is the same as the one set by the Internal Revenue Service, as well as get links to state tax departments, in the ol' blog's state tax directory.
Lots of taxes beyond income: But forgoing a state income tax doesn't necessarily mean local residents get off tax-free.
Sales taxes are collected in D.C. and 45 states. The only states without a sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon, but Alaska allows its towns to levy one if they so decide.
And since residents expect governments at all levels to provide certain services, the money has to come from somewhere. That's generally some type of tax.
Just what kind of tax depends on a state's or other taxing jurisdiction's needs, as well as its residents' willingness to accept levies.
That's why, notes Samuel Stebbins in an analysis of the myriad taxes, the types and amounts of state and local taxes differ so dramatically across the United States.
He reviewed the total tax payments as a share of income on a per capita basis to identify the states with the lowest and highest tax burden. Federal taxes were not included in the calculation.
That's also why Stebbins' study for 24/7 Wall Street and published last week in USA Today earns this week's Saturday Shout Out.
Even better for us readers, it's all one article. It's not a slideshow. It doesn't require multiple clicks. Just some scrolling.
Not so no-tax Texas: My search for Texas told me that despite not having a personal income, the Lone Star State is ranked 35th as far as taxes are concerned.
My native state's no income tax status tied for the lowest with the other similarly situated no-wage tax states. However, other levies increased my and my fellow Texans' overall tax bills.
Texas' property tax collections per capita came to $1,872, the 13th highest in the country. Our general sales tax, which includes the state's 6.25 percent tax plus a potential add-on of up to 2 more percentage points in some cities, is the 11th highest in the United States.
Enjoy finding out where your state ranks tax-wise and bragging about or cursing at it accordingly.
You also might find these items of interest:
- Tax law changes in 2020 at federal and state levels
- States also offer online (& free for some) tax filing options
- Billionaires make literal wealth preservation moves to avoid state estate taxes
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