What States have the Highest and Lowest Income Taxes?

Not every state in the US has the same state income taxes! Many states have zero income taxes (Texas) while others have extremely high income taxes (California)! It is not just income taxes that vary by state. Different states have different property tax rates, different vehicle tax rates, different sales tax rates, and more. Income taxes can have a huge impact on the money you keep, especially if you are a high earner. This is why you often see very wealthy people move to states with low or no income taxes. We have put together a comprehensive list of the property taxes in each state, which can be really simple in some cases or really complicated in others. 

One important thing to note however is how exactly graduated-rate state income taxes work. A common misconception is that once your income reaches the next bracket, your entire income will be taxed at a higher rate. This is not the case. Only the money you make above the threshold will be taxed at the higher rate.

If you would like to see the property tax rates in each state check this out.

States with No State Income Tax

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

States with Flat-Rate State Income Tax

• Colorado – 4.55%
• Illinois – 4.95%
• Indiana – 3.23%
• Kentucky – 5%
• Massachusetts – 5%
• Michigan – 4.25%
• New Hampshire – 5%
  • Only applies to dividends and interest
• North Carolina – 5.25%
• Pennsylvania – 3.07%
• Utah – 4.95%

States with Graduated-Rate State Income Tax

Alabama

Bracket	Rate
0-$500	2%
$500-$3000	4%
>$3000	5%

Arizona

Bracket	Rate
0-$27,272	2.59%
$27,272-$54,544	3.34%
$54,544-$163,632	4.17%
$163,632-$250,000	4.5%
>$250,000	8%

Arkansas

Bracket	Rate
0-$4000	2%
$4000-$8000	4%
>$8000	5.9%

California

Bracket	Rate
0-$8,932	1%
$8,932-$21,175	2%
$21,175-$33,421	4%
$33,421-$46,394	6%
$46,394-$58,634	8%
$58,634-$299,508	9.3%
$299,508-$359,407	10.3%
$359,407-$599,012	11.3%
$599,012-$1,000,000	12.3%
>$1,000,000	13.3%

Connecticut

Bracket	Rate
0-$10,000	3%
$10,000-$50,000	5%
$50,000-$100,000	5.5%
$100,000-$200,000	6%
$200,000-$250,000	6.5%
$250,000-$500,000	6.9%
>$500,000	6.99%

Delaware

Bracket	Rate
$2,000-$5,000	2.2%
$5,000-$10,000	3.9%
$10,000-$20,000	4.8%
$20,000-$25,000	5.2%
$25,000-$60,000	5.55%
>$60,000	6.6%

Georgia

Bracket	Rate
0-$750	1%
$750-$2,250	2%
$2,250-$3,750	3%
$3,750-$5,250	4%
$5,250-$7,000	5%
>$7,000	5.75%

Hawaii

Bracket	Rate
0-$2,400	1.4%
$2,400-$4,800	3.2%
$4,800-$9,600	5.5%
$9,600-$14,400	6.4%
$14,400-$19,200	6.8%
$19,200-$24,000	7.2%
$24,000-$36,000	7.6%
$36,000-$48,000	7.9%
$48,000-$150,000	8.25%
$150,000-$175,000	9%
$175,000-$200,000	10%
>$200,000	11%

Idaho

Bracket	Rate
0-$1,568	1.125%
$1,568-$3,136	3.125%
$3,136-$4,704	3.625%
$4,704-$6,272	4.6255
$6,272-$7,840	5.625%
$7,840-$11,760	6.625%
>$11,760	6.925%

Iowa

Bracket	Rate
0-$1,676	0.33%
$1,676-$3,352	0.67%
$3,352-$6,704	2.25%
$6,704-$15,084	4.14%
$15,084-$25,140	5.63%
$25,140-$33,520	5.96%
$33,520-$50,280	6.25%
$50,280-$75,420	7.44%
>$75,420	8.53%

Kansas

Bracket	Rate
0-$15,000	3.1%
$15,000-$30,000	5.25%
>$30,000	5.7%

Louisiana

Bracket	Rate
0-$12,500	2%
$12,500-$50,000	4%
>$50,000	6%

Maine

Bracket	Rate
0-$22,450	5.8%
$22,450-$53,150	6.75%
>$53,150	7.15%

Maryland

Bracket	Rate
0-$1,000	2%
$1,000-$2,000	3%
$2,000-$3,000	4%
$3,000-$100,000	4.75%
$100,000-$125,000	5%
$125,000-$150,000	5.25%
$150,000-$250,000	5.5%
>$250,000	5.75%

Minnesota

Bracket	Rate
0-$27,230	5.35%
$27,230-$89,440	6.8%
$89,440-$166,040	7.85%
>$166,040	9.85%

Mississippi

Bracket	Rate
$4,000-$5,000	3%
$5,000-$10,000	4%
>$10,000	5%

Missouri

Bracket	Rate
$107-$1,073	1.5%
$1,073-$2,146	2%
$2,146-$3,219	2.5%
$3,219-$4,292	3%
$4,292-$5,365	3.5%
$5,365-$6,438	4%
$6,438-$7,511	4.5%
$7,511-$8,584	5%
>$8,584	5.4%

Montana

Bracket	Rate
0-$3,100	1%
$3,100-$5,500	2%
$5,500-$8,400	3%
$8,400-$11,300	4%
$11,300-$14,500	5%
$14,500-$18,700	6%
>$18,700	6.9%

Nebraska

Bracket	Rate
0-$3,340	2.46%
$3,340-$19,990	3.51%
$19,990-$32,210	5.01%
>$32,210	6.84%

New Jersey

Bracket	Rate
0-$20,000	1.4%
$20,000-$35,000	1.75%
$35,000-$40,000	3.5%
$40,000-$75,000	5.525%
$75,000-$500,000	6.37%
$500,000-$1,000,000	8.97%
>$1,000,000	10.75%

New Mexico

Bracket	Rate
0-$5,500	1.7%
$5,500-$11,000	3.2%
$11,000-$16,000	4.7%
$16,000-$210,000	4.9%
>$210,000	5.9%

New York

Bracket	Rate
0-$8,500	4%
$8,500-$11,700	4.5%
$11,700-$13,900	5.25%
$13,900-$21,400	5.9%
$21,400-$80,650	5.97%
$80,650-$215,400	6.33%
$215,400-$1,077,550	6.85%
>$1,077,550	8.82%

North Dakota

Bracket	Rate
0-$40,125	1.1%
$40,125-$97,150	2.04%
$97,150-$202,650	2.27
$202,650-$440,600	2.64%
>$440,600	2.9%

Ohio

Bracket	Rate
$22,150-$44,250	2.85%
$44,250-$88,450	3.326%
$88,450-$110,650	3.802%
$110,650-$221,300	4.413%
>$221,300	4.797%

Oklahoma

Bracket	Rate
0-$1,000	0.5%
$1,000-$2,500	1%
$2,500-$3,750	2%
$3,750-$4,900	3%
$4,900-$7,200	4%
>$7,200	5%

Oregon

Bracket	Rate
0-$3,650	4.75%
$3,650-$9,200	6.75%
$9,200-$125,000	8.75%
>$125,000	9.9%

Rhode Island

Bracket	Rate
0-$66,200	3.75%
$66,200-$150,550	4.75%
>$150,550	5.99%

South Carolina

Bracket	Rate
$3,070-$6,150	3%
$6,150-$9,230	4%
$9,230-$12,310	5%
$12,310-$15,400	6%
>$15,400	7%

Vermont

Bracket	Rate
0-$40,350	3.35%
$40,350-$97,800	6.6%
$97,800-$204,000	7.6%
>$204,000	8.75%

Virginia

Bracket	Rate
0-$3,000	2%
$3,000-$5,000	3%
$5,000-$17,000	5%
>$17,000	5.75%

West Virginia

Bracket	Rate
0-$10,000	3%
$10,000-$25,000	4%
$25,000-$40,000	4.5%
$40,000-$60,000	6%
>$60,000	6.5%

Wisconsin

Bracket	Rate
0-$12,120	3.54%
$12,120-$24,250	4.65%
$24,250-$266,930	6.27%
>$266,930	7.65%

District of Colombia

Bracket	Rate
0-$10,000	4%
$10,000-$40,000	6%
$40,000-$60,000	6.5%
$60,000-$350,000	8.5%
$350,000-$1,000,000	8.75%
>$1,000,000	8.95%

Based off the report from the Tax Foundation.

Lowest to highest income tax based on median household income ($62,843 from 2015-2019 – US Census Bureau)

Rank	State	Income Tax
1	North Dakota	2.04%
2	Pennsylvania	3.07%
3	Indiana	3.23%
4	Ohio	3.326%
5	Rhode Island	3.75%
6	Arizona	4.17%
7	Michigan	4.25%
8	Colorado	4.55%
9	Maryland	4.75%
10	New Mexico	4.9%
11	Illinois	4.95%
12	Utah	4.95%
13	Alabama	5%
14	New Hampshire	5%
15	Kentucky	5%
16	Oklahoma	5%
17	Massachusetts	5%
18	Mississippi	5%
19	North Carolina	5.25%
20	New Jersey	5.525%
21	Missouri	5.4%
22	Connecticut	5.5%
23	Kansas	5.7%
24	Georgia	5.75%
25	Virginia	5.75%
26	Arkansas	5.9%
27	New York	5.97%
28	Louisiana	6%
29	Wisconsin	6.27%
30	West Virginia	6.5%
31	Delaware	6.6%
32	Vermont	6.6%
33	Minnesota	6.8%
34	Nebraska	6.84%
35	Montana	6.9%
36	Idaho	6.925%
37	South Carolina	7%
38	Maine	7.15%
39	Iowa	7.44%
40	Hawaii	8.25%
41	D.C.	8.5%
42	Oregon	8.75%
43	California	9.3%

It is also important to note that alongside state income taxes, there are also federally mandated income taxes which are the same no matter what state you are in. If you are interested in learning more about getting started in real estate investing and how it ties into income taxes, click here.