See Where MA Ranks Among States With Lowest Tax Rates

Wednesday, March 13, 2019
GoLocalWorcester News Team

MA ranks 26th among states with lowest tax rates.
With the tax filing deadline of April 15 just around the corner, how much of a break do Massachusetts residents get when it comes to tax rates.

According to a recent study completed by WalletHub, Massachusetts ranks 26th when it comes to states with the lowest tax rates in the U.S.

“Every year, the average U.S. household pays more than $7,800 in federal income taxes, according to the Bureau of Labor Statistics. And while we’re all faced with that same obligation, there is significant difference when it comes to state and local taxes. Taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states,” said WalletHub.

MA’s Numbers

  • 48th - Highest State Cigarette Tax Rates
  • 10.81% - Effective Total State and Local Tax Rates on Median U.S. Household
  • $6,277 - Annual State & Local Taxes on Median U.S. Household
  • 0.47% - Difference Between State and U.S. Average
  • $9,175 - Annual State and Local Taxes on Median State Household

 

The Rankings

Massachusetts is ranked behind North Carolina and Virginia, who rank 24th and 25th respectively.

Massachusetts is ranked ahead of South Dakota and Vermont, who rank 27th and 28th respectively.

Alaska has the lowest tax rates, while Illinois has the highest.

See the full rankings in the map below

Source: WalletHub

The Method

In order to identify the states with the highest and lowest tax rates, WalletHub compared the 50 states and the District of Columbia across four types of taxation:

  • Real-Estate Tax: WalletHub first divided the “Median Real-Estate Tax Amount Paid” by the “Median Home Price” in each state. We then applied the resulting rates to a house worth $193,500, the median value for a home in the U.S., in order to obtain the dollar amount paid as real-estate tax per household.
  • Vehicle Property Tax: WalletHub examined data for cities and counties collectively accounting for at least 50 percent of the state’s population and extrapolated this to the state level using weighted averages based on population size. For each state, we assumed all residents own the same car: a Toyota Camry LE four-door sedan, 2018’s highest-selling car, valued at $24,350, as of March 2019.
  • Income Tax: WalletHub used the percentage of income (middle income rate) spent on income tax from WalletHub’s Best States to Be Rich or Poor from a Tax Perspective report. “Income” refers to the mean third quintile U.S. income amount of $58,082.
  • Sales & Excise Tax: WalletHub used the percentage of income (middle income rate) spent on sales and excise taxes from WalletHub’s Best States to Be Rich or Poor from a Tax Perspective report. “Income” refers to the mean third quintile U.S. income amount of $58,082.

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