New York Has Second-Highest Tax Rate in US

WalletHub study finds New York ranks near the top for income, real estate, and sales taxes

Published on Mar. 4, 2026

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According to a new report from personal finance website WalletHub, New York State has the second-highest overall tax rate among all 50 states and Washington D.C. The state ranked 49th for income tax, 46th for real estate tax, and 23rd for sales and excise taxes.

Why it matters

High tax rates can be a significant burden on residents and businesses, potentially impacting economic growth and the ability of New Yorkers to afford the cost of living. This study provides important data on New York's competitiveness compared to other states.

The details

To determine the rankings, WalletHub compared all 50 states and D.C. against national medians to see where taxpayers pay the least and the most. The company calculated relative income tax obligations by applying the effective income tax rates in each state and locality to the average American's income. The report found that Illinois had the highest overall tax rate, while Alaska had the lowest.

  • The WalletHub report was released on Tuesday, March 4, 2026.

The players

WalletHub

A personal finance website that conducted the study on state tax rates.

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The takeaway

This study highlights the significant tax burden faced by New Yorkers, which could impact the state's economic competitiveness and cost of living. Policymakers may need to examine ways to reduce the tax load while still funding critical public services.