Map Reveals States With Highest and Lowest Tax Rates

Illinois residents pay the highest overall state and local tax rates, while Alaska has the lowest.

Published on Mar. 4, 2026

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A new analysis by WalletHub found that residents of Illinois pay the highest overall state and local tax rates in the country, at 16.87% of their median household income of $81,211. In contrast, residents of Alaska pay the lowest overall tax rate at 6.94% of their median household income.

Why it matters

As debates over the high cost of living heat up across the political spectrum, the analysis highlights the significant variation in tax burdens faced by Americans depending on where they live. This information is particularly relevant during tax season, when many are reminded of how much of their income goes to state and local taxes.

The details

To make its rankings, WalletHub compared the 50 states and the District of Columbia across four types of taxation: real-estate tax, vehicle property tax, income tax, and sales & excise tax. The analysis found that New York had the second-highest tax burden, followed by Connecticut. At the other end of the spectrum, Delaware and Wyoming had the second and third lowest overall tax rates after Alaska.

  • Tax season for fiscal year 2025 is in full swing, with the federal filing deadline on April 15.
  • The analysis was conducted ahead of the 2025 tax year.

The players

WalletHub

A Washington-based think tank that conducted the analysis on state and local tax rates.

Frank J. Bisignano

IRS Chief Executive Officer, who encouraged taxpayers to use e-file and direct deposit to speed up the processing of their returns.

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What they’re saying

“Just as we did back in 1986, today the IRS encourages taxpayers to speed the processing of their returns by using e-file, instead of paper. And to speed the processing of any refund due, we also encourage the use of direct deposit.”

— Frank J. Bisignano, IRS Chief Executive Officer (IRS)

“Every year during tax season, Americans are reminded of just how much of their hard-earned income isn't theirs to keep. Living in the right state can ease the stress of tax time, though, as taxpayers in the least expensive states pay less than half as much as those in the most expensive states.”

— Chip Lupo, WalletHub analyst (WalletHub)

What’s next

The IRS expects about 164 million individual tax returns for tax year 2025 ahead of the April 15 deadline.

The takeaway

This analysis highlights the significant disparities in state and local tax burdens faced by Americans, with residents of high-tax states like Illinois paying over 50% more than the national average. As debates over the cost of living continue, this information can help inform discussions around tax policy and its impact on household finances.