These are the states where you pay the most and least taxes

The annual tax bill in the United States depends, at least in part, on where you live. State income taxes range from nonexistent to nearly 14% for some particularly high-income earners. A recent report by The Tax Foundation updated the figures for 2025.

The highest and lowest rates in numbers.

Some states with low or no individual income taxes, such as Texas and Florida, are attracting many new residents. On the opposite side, California (13.3%), Hawaii (11%) and New York (10.9%) have the highest top marginal individual income tax rates.

Arizona and North Dakota (both 2.5%) have the lowest among income tax states.

States that do not tax at the state level

While millions of people must file state and federal income tax returns, some U.S. residents can do without the former. In several states, income is not taxed at the state level, which may appear to reduce their overall tax burden.

Currently, there are a total of nine states that do not tax income at the state level: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. However, in certain cases, these states generate revenue through high taxes in other areas.

Property and sales taxes are other taxes that state governments may impose to fund their budgets. One such state is Tennessee, which does not tax income, but has the highest average sales tax rates in the country. The average combined sales tax paid by consumers in that state, based on taxes levied by state and local governments, is 10%, according to The Tax Foundation.

Particular Cases

According to data from the Tax Foundation, local taxes, as well as some state-specific taxes in many states-and a capital gains surcharge for high-income earners in Minnesota-are not included.

Many states also have progressive income taxes, with higher amounts of income taxed at gradually higher rates. New York's tax rates, for example, range from 4% to 10.9%.

It is also specified that several states, including Arizona, Idaho, Illinois and others, have a flat income tax, meaning that everyone pays the same rate regardless of their income.

There are other interesting exceptions: Washington does not have a general income tax, but does tax capital gains above a certain threshold as a particular case.

Each state's approach to taxation varies, but the mission is the same: to fund the budget passed by the state legislature. In addition to the taxes they collect, states also receive funding from the federal government, which has decreased substantially in recent months following the Trump Administration's new provisions.