Special report by Tax Foundation. For nearly two decades the Tax Foundation has published an estimate of the combined state-local tax burden shouldered by the residents of each of the 50 states. For each state, we calculate the total amount paid by the residents in taxes, then divide those taxes by the state's total income to compute a "tax burden."
Key Findings in the Report
• Taxpayers pay taxes not only to the state and local governments where they reside but also to out-of-state governments, both naturally and by design. Nationwide, over a quarter of all state and local taxes are collected from non-residents, and a true measure of the tax burden on the residents of any state must take this into account. This paper attempts to quantify the tax shifting across states and how it affects the distribution of state and local tax burdens.
• During fiscal year 2009, in the midst of a national recession, both income and taxes shrank, but taxes fell faster than incomes. The result was that tax burdens decreased from 9.9 percent in 2008 to 9.8 percent in 2009.
• In 2009, the residents of New Jersey, New York and Connecticut paid the highest state-local tax burdens in the nation. They're the only three states where taxpayers give up 12 percent or more of their income in state-local taxes, a full percentage point above the next highest state, Wisconsin.
• Alaskans, consistently the least taxed in the nation, again paid the least in 2009, just 6.3 percent. The next lowest state, over a full percentage point higher, is Nevada at 7.5 percent.
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Source: Tax Foundation

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