How Many States Tax an Individual’s Income?

by

States with No Income Tax

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

State Income Tax Overview

  • Forty-three states and Washington, D.C. have individual income taxes with varying rates and brackets.
  • States may make revenue through other taxes like property or sales tax rates.

Taxation and Revenue Generation

  • The variation in state tax rates stems from different approaches to funding public services.
  • States with no income tax often have higher property and sales taxes.

Individual Income Tax in the US

  • Forty-two states and many localities impose an income tax on individuals.
  • Some states do not collect income taxes, such as Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

The Role of State Income Tax

  • State income tax rates can impact the overall tax burden on income.
  • The Tax Foundation’s 2023 State Business Tax Climate Index provides insights into individual income tax rates.

Tax Revenue Composition

  • In 2020, individual income tax accounted for a significant portion of total state and local revenue.
  • Property taxes in some states contribute significantly to overall tax burdens.

Leave a Comment