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The 7 States Where Taxes Take the Biggest Bite
Tax season is a stark reminder that where you live determines how much of your paycheck actually stays in your pocket. While federal taxes apply equally across state lines, state and local tax burdens can vary dramatically—and for residents of the highest-tax states, the difference amounts to thousands of dollars every year.
WalletHub analyzed all 50 states across three categories—property taxes, individual income taxes, and sales and excise taxes—to determine the total tax burden as a percentage of personal income. Here are the seven states with the highest tax burdens in America for 2026.
7. Maryland — 9.7% Total Tax Burden
Maryland ranks seventh largely because of its individual income tax burden of 4.28%, the third-highest in the country. While its property and sales taxes are relatively modest, that heavy income tax pushes its overall burden into the top seven nationally.
6. Illinois — 9.92% Total Tax Burden
Illinois earns its spot thanks to fairly high taxes across all categories. Its property tax burden of 3.75% is notably high, and its sales and excise taxes add another 3.77% on top of that, plus a 2.4% income tax. The state’s flat income tax rate of 4.95% is moderate, but property taxes are among the highest in the country.
5. Maine — 10.01% Total Tax Burden
Maine crosses the 10% threshold thanks to high property taxes at 3.95%. Its income and sales taxes are more moderate, but the property levies push it into the top five. The state’s top income tax rate of 7.15% applies to income over $58,050—a relatively low threshold that pushes many middle-class residents into the top bracket.
4. New Mexico — 10.75% Total Tax Burden
New Mexico’s ranking is driven almost entirely by its sales and excise tax burden of 6.28%, the third-highest of any state on this list. Its property and income taxes are comparably quite low.
3. Vermont — 11.1% Total Tax Burden
Vermont reaches number three on the back of the highest property tax in the country at 4.89%. Its income and sales taxes are more mid-range. The state’s top income tax rate is 8.75% on income over $229,500, and Vermont is one of eight states that still taxes Social Security benefits.
2. New York — 12.39% Total Tax Burden
New York is weighed down by high taxes across categories. Its individual income tax burden of 4.65% is the second-highest in the country, and its property tax burden of 4.22% is the fourth-highest. The state’s top marginal income tax rate reaches 10.9% for high earners, and New York City residents pay an additional local income tax. Combined state and local tax rates for NYC residents can push total burdens significantly higher.
1. Hawaii — 13.30% Total Tax Burden
Hawaii carries the highest total tax burden of all 50 states, thanks to one category: a sales and excise tax burden of 7.48%—the steepest in the country. Hawaii’s property tax is comparatively low, but its income tax ranks seventh at 3.2%, securing it the top spot overall.
The state’s general excise tax (GET) is particularly burdensome because it applies broadly to services and business-to-business transactions, effectively taxing the same dollar multiple times as it moves through the economy.
How Other High-Tax States Compare
While the WalletHub analysis focuses on total tax burden as a percentage of income, other studies show slightly different rankings based on methodology:
Note: Rankings vary significantly depending on whether the analysis includes federal taxes. The WalletHub and Yahoo Finance figures above reflect only state and local taxes.
The Migration Effect: High-Tax States Lose Billions
The impact of high tax burdens extends beyond annual bills—it’s reshaping where Americans choose to live. Newly released IRS data shows that high-tax states are losing billions in income as residents relocate to lower-tax alternatives.
| State | Net AGI Loss (2022-2023) |
|---|---|
| California | $11.9 billion |
| New York | $9.9 billion |
| Illinois | $6.0 billion |
| Massachusetts | $4.0 billion |
| New Jersey | $2.6 billion |
| Maryland | $1.8 billion |
| Minnesota | $1.5 billion |
Meanwhile, states without income taxes saw huge gains. Florida gained $20.6 billion, Texas added $5.5 billion, and South Carolina, North Carolina, Tennessee, Arizona, and Nevada all posted significant net income gains.
The Bottom Line
If you’re feeling the squeeze this tax season, your state of residence plays a major role. Residents of high-tax states like Hawaii, New York, and Vermont pay significantly more of their income to state and local governments than those in no-income-tax states like Florida, Texas, and Nevada.
Before making any move based on taxes, consider your full financial picture—including job opportunities, housing costs, and quality-of-life factors. But if minimizing your tax burden is a priority, the data is clear: where you live matters.
