Combined sales and income tax leaders. Applicable in addition to all state taxes.
New hampshire and tennessee until 1 january 2021 tax only dividend and interest income.
Income tax by state. The us income tax rates by state vary depending on where you live. Eight states have only one income tax bracket charging its residents the same rate on all income which is called a flat rate. Taxable income conforms closely to federal taxable income in most states with limited modifications.
This table includes the per capita tax collected at the state level. Residents of these states pay the least in sales taxes overall. Seven states have no income tax and two only tax interest and dividends.
Several other states have a relatively low tax rate across all income levels. Overall state tax rates range from 0 to more than 13 as of 2020. State income tax is imposed at a fixed or graduated rate on taxable income of individuals corporations and certain estates and trusts.
Most of the 50 states impose some personal income tax with the exception of alaska florida nevada south dakota texas washington and wyoming which have no state income tax. State tax levels indicate both the tax burden and the services a state can afford to provide residents. Most state governments in the united states collect a state income tax on all income earned within the state which is different from and must be filed separately from the federal income tax.
In addition to the above new hampshire and tennessee do not have a state income tax either but they tax interest and dividends at a rate of 5 and 1 respectively. Few states impose an income tax at rates that exceed 10. Here is a list of seven states in the us that have no income tax.
Colorado 4 63 illinois 4 95 indiana 3 23 massachusetts 5 0 michigan 4 25 north carolina 5 25 pennsylvania 3 07 and utah 5 0. California hawaii oregon minnesota and new jersey have some of the highest state income tax rates in the country and seven states have no tax on earned income at all. Another nine have a flat tax rate everyone pays the same percentage regardless of how much they earn.
Federal income tax minimum bracket 10 maximum bracket 39 6. States use a different combination of sales income excise taxes and user fees some are levied directly from residents and others are levied indirectly. The rates vary by state.
Arizona colorado illinois indiana michigan new mexico north dakota ohio pennsylvania and utah levy tax on income under 5.