You can also use the state map to go directly to your state page. Nebraska’s income tax rate is 2.46%, making it one of the states with relatively low income tax rates. Montana’s income tax rate is 1%, making it one of the states with relatively low income tax rates. Louisiana’s income tax rate is 1.85%, making it one of the states with relatively low income tax rates. Vermont follows five income tax brackets ranging from 3.55% to 8.95%. While 8.95% seem hefty, it only applies to those who earn more than $416,700.

Income Tax Rates by State: The Definitive List Types of Taxes

Similarly, North Dakota’s burden has fallen from 13.0 percent in 1977 to 8.8 percent of net state product in 2022. This tax shifting across state borders arises from several factors, including our movement across state lines during work and leisure time and the interconnectedness of the national economy. The largest driver of this phenomenon, however, is the reality that the ultimate incidence of a tax frequently falls on entities other than those that write the check to the government. Copyright ©2025 MH Sub I, LLC dba Nolo ® Self-help services may not be permitted in all states. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.

• And while these figures are not high, they represent a substantial increase over prior years.
• Some states double their single filer bracket widths for married filers to avoid imposing a “marriage penaltyA marriage penalty is when a household’s overall tax bill increases due to a couple marrying and filing taxes jointly.
• For instance, marrying or divorcing affects whether you file as single or jointly.
• Vermont follows five income tax brackets ranging from 3.55% to 8.95%.

State Individual Income Tax Rates and Brackets, 2022

The 2% city of Milwaukee sales and use tax is effective January 1, 2024. Seventy Wisconsin counties have adopted a 0.5% county tax. Milwaukee County sales and use tax increases how is sales tax calculated from 0.5% to 0.9%, effective January 1, 2024.

Applicable Laws and Rules

Much of this interstate tax collecting occurs through no special effort by state and local legislators or tax collectors. Tourists spend Airbnb Accounting and Bookkeeping as they travel and many of those transactions are taxed. People who own property out of state pay property taxes in those states. And the burden of business taxes is borne by the employees, shareholders, and customers of those businesses wherever they may live.

• Some of these rate reductions were effective starting January 1, 2022; some were retroactive to January 1, 2021; and others are scheduled to take effect in the future.
• The residents of the state also enjoy a lower gas tax of just 19 cents per gallon, which is the second-lowest rate in all of the U.S.
• 436, which further consolidates Montana’s five tax brackets to four.11 Under the new law, which is retroactive to January 1, 2022, the 5.5 percent bracket was eliminated, and the second-lowest rate was reduced from 3.1 percent to 3.0 percent.
• Fiscal year data from states have been adjusted to match the calendar year.

The local income tax is calculated as a percentage of your taxable income. Local officials set the rates, which range between 2.25% and 3.20% for the current tax year. 593, which increased the standard deduction for single filers from $4,600 to $5,400 in tax year 2022.10 The standard deduction for joint filers increased from $6,000 to $7,100. THe percentage given is a percentage of income, not the tax rate. A state with a lower sales tax rate could still rank higher than Tennessee if its sales tax burden were a higher precentage of income.

On the other end of the spectrum, states with higher income tax rates can impose a more substantial financial burden. California, for instance, levies a 1% income tax rate, while New York and Michigan have rates of 4% and 4.25%, respectively. However, it’s worth noting that income tax rates are state income tax rates not the sole factor determining overall tax burdens.

This information can help you adjust your financial plans to fit current tax laws. Marriage and divorce both change your filing status, affecting your bracket. Filing jointly often yields different tax implications than filing separately. The “marriage bonus” or penalty could apply, influencing your combined tax situation. Important events such as getting married, having children, or retiring can all change your taxes.