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Considering a move to another state? Not so fast. Be sure to weigh state taxes when calculating the difference in cost of living.
Here is Yahoo News’s updated 2014 list of the ten least tax-friendly states (1). Their choices remain the same as last year. Almost all these states levy property taxes well above the national median of $1,324. State income taxes are high, as are combined state and local sales taxes that could cost you up to an additional 10% per purchase, depending the municipality in which you live or shop. Finally, some of these states have the highest gas prices in the U.S., in part because they charge above-average fuel taxes and fees.
State income tax: 1%-13.3%
State sales tax: 7.5%
Gas taxes and fees: $0.53 per gallon (National average is $0.31)
The Golden State is home to movie stars, beautiful beaches, Silicon Valley… and the highest income tax rates in the U.S. Rates range from 1% on taxable income of up to $7,582 for individuals ($15,164 for married joint filers) to 13.3% for individuals or married couples with taxable income of more than $1 million.
State income tax: 3%-6.7%
State sales tax: 6.35%
Gas taxes and fees: $0.49 per gallon
The Constitution State has the second-highest property taxes in the U.S. after New Jersey, according to the Tax Foundation. The median property tax on the state’s median home value of $291,200 is $4,738.
The top income tax rate of 6.7% kicks in at $250,000 in taxable income for individuals and $500,000 for married couples.
There are no local sales taxes, but residents pay a state sales tax of 6.35% on most items. Luxury items, such as jewelry worth more than $5,000, are taxed at 7%.
State income tax: 1.4%- 8.97%
State sales tax: 7%
Gas taxes and fees: $0.15 per gallon
The Garden State’s combined state and local tax burden is the second-highest in the nation, after New York. What’s more, seven of the top ten counties with the highest median real estate taxes are in New Jersey, according to the Tax Foundation. The median property tax on the state’s median home value of $348,300 is $6,579.
State income tax: 4%-8.82%
State sales tax: 4%
Gas taxes and fees: $0.49 per gallon (varies by county)
Residents of the Empire State shoulder the highest state and local tax burden in the U.S., according to the Tax Foundation.
Income tax rates range from 4% on up to $8,200 of taxable income for single filers and $16,450 for married couples filing jointly to 8.82% on taxable income of more than $1,029,250 for single filers and $2,058,550 for married couples filing jointly.
State income tax: 1.4%-11%
State sales tax: 4%
Gas taxes and fees: $0.48 per gallon (varies by county)
The Aloha State is known for its high cost of living and high income tax rates are part of the reason. The top rate of 11% applies to taxable income of $300,000 for individual filers and $400,000 for married couples.
State income tax: 3.75%-5.99%
State sales tax: 7%
Gas taxes and fees: $0.33 per gallon
In 2011, the Ocean State dropped its top income tax rate from 9.9% to 5.99%, but it’s still far from a tax haven. The Tax Foundation says Rhode Island’s median real estate taxes are the seventh-highest in the U.S. The median property tax on the state’s median home value of $267,100 is $3,618.
Income tax rates range from 3.75% on up to $59,600 of taxable income to 5.99% on taxable income that exceeds $135,500.
Groceries, most clothing and footwear, and prescription drugs are exempt from the 7% state sales tax. Over-the-counter drugs, such as aspirin, are taxed unless you have a prescription. The tax also applies to the portion of any individual sale of clothing and footwear that exceeds $250. Sales tax on vehicles is 7%.
State income tax: 6.5%-7.95%
State sales tax: 5.5%
Gas taxes and fees: $0.32 per gallon
The Pine Tree State dropped its top state income tax rate from 8.5% to 7.95% in 2013. But that’s still steep compared to other states, and it kicks in once taxable income exceeds just $20,900 for single filers or $41,850 for joint filers.
Maine is one of only a few states that prohibit local jurisdictions from imposing their own sales tax. Food for home consumption and prescription drugs are exempt from sales taxes; but prepared foods in restaurants are taxed at 8%.
State income tax: 5.35%-9.85%
State sales tax: 6.875%
Gas taxes and fees: $0.29 per gallon
The North Star State recently added a new top income tax rate for high earners. Tax rates range from 5.35% on taxable income of less than $24,680 for single filers and $36,080 for joint filers to 9.85% on taxable income of more than $152,540 for single filers and $254,241 for joint filers.
State income tax: 3.55%-8.95%
State sales tax: 6%
Gas taxes and fees: $0.33 per gallon
The Green Mountain State has a steep top income tax rate, and its property taxes are among the ten highest in the U.S., according to the Tax Foundation. And the median property tax on the state’s median home value of $216,300 is $3,444, also high.
Income tax rates range from 3.55% on up to $36,900 of taxable income ($59,050 for married couples) to 8.95% on taxable income of more than $405,100 for singles and joint filers.
State income tax: 5%
State sales tax: 6.25%
Gas taxes and fees: $0.39 per gallon
Sales taxes are steep in the Prairie State. In some municipalities, combined state and local sales taxes are as high as 10%. Qualifying food and prescription and nonprescription drugs are taxed at 1%, however. And the state income tax is a flat 5%.
The state’s homestead exemption for owner-occupied residential property exempts up to $6,000 ($7,000 in Cook County) from a property’s assessed value. Even then, though, the state has some of the highest property taxes in the U.S., according to the Tax Foundation. The median property tax on the state’s median home value of $202,200 is $3,507.
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