The 10 Worst States For Taxes in 2015
Top state income tax rate: 8.98 percent
State sales tax: 6 percent
Per capita property tax: $1,430
Corporate taxes land Iowa on the worst states list in 2015. The state’s 12 percent corporate income tax rate is the highest in the country. In contrast, its sales tax and top individual income tax rates are middle of the road.
Flickr/TumblingRun
Top state income tax rate: 6.7 percent
State sales tax: 6.35 percent
Per capita property tax: $2,580
High property taxes are what set Connecticut apart from other states. Only New Jersey has a higher per capita rate. Sales, income and corporate taxes in Connecticut are all worse than average. The state also gets penalized in the rankings for being the only state in the nation that has a gift tax.
Flickr/Ilirjan_Rrumbullaku
Top state income tax rate: 7.65 percent
State sales tax: 5 percent
Per capita property tax: $1,724
A high income tax rate plus an alternative minimum tax on individuals land Wisconsin among the worst states for taxes. The Tax Foundation credits the state for improving some elements of its property tax and corporate tax codes. Its sales tax is on the low side among states that have them.
Flickr/Brian Koprowski
Top state income tax rate: 5.33 percent
State sales tax: 5.75 percent
Per capita property tax: $1,140
Ohio’s tax rates look pretty low. But it made it to the worst states for taxes list this year because of a change in the Tax Foundation’s methodology. The group now penalizes certain states for how they treat LLCs and S corporations. Ohio’s income tax rate doesn’t look too bad, but it gets dinged for having 10 brackets (the Tax Foundation prefers a flatter tax structure).
Flickr/Brian Koprowski
Top state income tax rate: 5.99 percent
State sales tax: 7 percent
Per capita property tax: $2,161
High corporate and property taxes earn Rhode Island a spot on the worst states for taxes list. But its ranking will probably improve next year since the state’s corporate income tax rate will fall from 9 to 7 percent on as of Jan. 1. Its middling sales tax of 7 percent keeps it from ranking even worse this year.
Flickr/Elliot Gilfix
Top state income tax rate: 8.95 percent
State sales tax: 6 percent
Per capita property tax: $2,197
High property and income taxes resulted in Vermont’s poor showing on the Tax Foundation ranking. At 8.95 percent, it is sandwiched between New York and New Jersey with one of the highest marginal income tax rates in the nation. Vermont makes up some lost ground in the overall rankings with its state sales tax, which the Tax Foundation ranks at 16th from the top.
Flickr/James Walsh
Top state income tax rate: 9.85 percent
State sales tax: 6.88 percent
Per capita property tax: $1,535
Minnesota’s fourth-worst spot is mainly because it raised its top income tax rate two percentage points in 2013. The top 9.85 percent rank affects married couples earning more than $250,000 and single taxpayers earning more than $150,000. Minnesota’s sales, property and corporate income taxes also rank in the bottom third of states overall.
Flickr/Keeva999
Top state income tax rate: 13.3 percent
State sales tax: 7.5 percent
Per capita property tax: $1,426
California has the dubious distinction of having the highest top income tax rate in the country. Its 13.3 percent rate kicks in at $1 million of taxable income. It also has the highest state-wide sales tax rate and mandates a 1 percent local tax rate on top of that. Its property taxes, however, are pretty reasonable relative to the rest of the country.
Flickr/David Yu
Top state income tax rate: 8.82 percent
State sales tax: 4 percent
Per capita property tax: $2,338
New York is a tough state for taxes, but it is no longer the worst of the worst, thanks to some corporate tax reforms that are phasing in. The state also eliminated the individual and corporate alternative minimum tax. Its 4 percent sales tax is on the low side of states that impose a sales tax.
Flickr/Werner Kunz
Top state income tax rate: 8.97 percent
State sales tax: 7 percent
Per capita property tax: $2,896
There is nothing good to say about New Jersey taxes. The state has high rates for every major type of tax – property, corporate, income and sales. It also adds some extra complexities like six different income tax brackets and a marriage penalty.
Flickr/Kim Carpenter