Washington DC has the highest income taxes of the three states. There are six income tax brackets ranging from 4% to 8.95%. The sales tax rate for Washington DC is 6%. This sales tax rate applies to tangible personal property and selected services. The sales tax rate for most locations in Virginia is 5.3%. Several areas have an additional regional or local tax.
Maryland has relatively high property and income tax rates, but lower than DC. Virginia has relatively low property and income tax rates compared to DC and Maryland.
The income tax rate in Maryland is considerably higher compared to Virginia. However, Virginia imposes a personal property tax. If you happen to own multiple vehicles, an RV, or aircraft, Virginia’s personal property tax may offset the income tax advantages. Assessing your circumstances is important to determine the more advantageous state from a tax perspective.
Of the three states, Maryland has the lowest state income tax rates for most middle-income taxpayers which are roughly half of the taxes you’d pay living in DC proper. Virginia has a progressive income tax, with a top marginal rate that is slightly lower than the national average. The average sales tax in the state, combining state and average local rates, is the 10th-lowest in the country. Virginia’s property taxes are also below the national average.