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Which Ten States Rely Most on Property Taxes?

Which Ten States Rely Most on Property Taxes?

Some states rely on property taxes for their revenue far more than others. For instance, Washington State only receives 26.8% of its revenue from property taxes. Instead, Washington relies on Sales tax and other taxes for 61.1% of the their revenue.

What is the most "fair" method of taxation depends on your prospective. Most observers consider sales tax a regressive tax since it disproportionately effects those with less income. Some states like Alaska or Wyoming have such massive natural resources that they don't require much taxation to fund government activities. (Alaska actually pays a check every year to each resident out of its oil fund)

The Tax Foundation compiled the following information from census data collected in 2006 and 2007. How does your state stack up? Is it "fair"?

Which Ten States Rely Most on Property Taxes?

Fraction of Tax Revenue Coming from Property Taxes

New Hampshire 61.3%
Vermont 42.1%
New Jersey 41.7%
Texas 41.6%
Rhode Island 41.1%
Michigan 39.3%
Connecticut 38.2%
Illinois 37.1%
Florida 36.8%
Wyoming 36.8%

 

Note: Includes residential and commercial real estate (mostly local revenue) as well as personal property taxes on cars, boats, etc. (mostly state revenue).

Which Ten States Rely Most on General and Selective Sales Taxes?

Fraction of Tax Revenue Coming from Sales Taxes (General + Selective)

Washington 62.1%
Nevada 58.2%
Tennessee 56.8%
South Dakota 54.1%
Arkansas 53.2%
Louisiana 53.0%
Hawaii 51.7%
Florida 49.0%
Arizona 48.4%
Alabama 47.8%

 

Note: The major selective sales taxes are levied on motor fuel, tobacco, insurance premiums, public utilities (power, telephone service, etc.), amusements and alcoholic beverages.

Which Ten States Rely Most on Individual Income Taxes?

Fraction of Tax Revenue Coming from Individual Income Taxes

Oregon 44.1%
Maryland 39.7%
Massachusetts 35.6%
North Carolina 32.7%
New York 31.8%
Virginia 31.6%
California 30.8%
Minnesota 30.5%
Connecticut 30.0%
Ohio 29.9%

 

Note: States and localities generally lump wages, dividends, interest and capital gains together when applying their individual income taxes.

Which States Rely Most on Licenses and Other Taxes?

Fraction of Tax Revenue Coming from Licenses & Other Taxes

Alaska 52.6%
Delaware 34.1%
Wyoming 30.1%
North Dakota 20.7%
Montana 18.8%
Oklahoma 17.8%
New Mexico 17.5%
Nevada 14.3%
Oregon 12.6%
West Virginia 12.4%

 

Note: In license category, taxes are imposed on motor vehicle licenses, business or corporation licenses, and hunting or fishing licenses. In category of other taxes, major revenue sources are severance taxes (natural resources), stock transfer taxes, and estate/gift taxes.

Source: Tax Foundation calculations based on data from Census Bureau's government finance data for state and local governments during fiscal year 2007

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