Tax Foundation Study: New Jersey Edges New York for Nation's Highest State-Local...

Thu Aug 7, 2008 12:01am EDT

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Tax Foundation Study: New Jersey Edges New York for Nation's Highest State-Local Tax Burden

         Burden Lowest in Alaska, Nevada, Wyoming and Florida
WASHINGTON--(Business Wire)--
New Jersey taxpayers bear the heaviest state-local tax burden in
2008, and Alaskans have the lightest tax burden, according to a new
report from the Tax Foundation.

   In Tax Foundation Special Report, No. 163, "State-Local Tax
Burdens Dip As Income Growth Outpaces Tax Growth," senior economist
Gerald Prante computes each state's combined state-local tax burden,
accounting for taxes paid out of state.

   The nation as a whole paid 9.7% of its income in state-local
taxes, down from 9.9% in 2007 primarily because income grew faster
than tax collections between 2007 and 2008.

   New Jersey residents paid 11.8%, topping the charts. New Yorkers
were close behind, paying 11.7%, and Connecticut was third at 11.1%.
The top ten were rounded out by Maryland (10.8%), Hawaii (10.6%),
California (10.5%), Ohio (10.4%), Vermont (10.3%), Wisconsin (10.2%)
and Rhode Island (10.2%).

   Alaskans pay the least, 6.4 percent in 2008, but Nevada is close
at 6.6 percent. In four states the residents pay between 7 and 8
percent of their income in state-local taxes: Wyoming (7.0%), Florida
(7.4%), New Hampshire (7.6%) and South Dakota (7.9%). Four other
states round out the bottom ten: Tennessee (8.3%), Texas (8.4%),
Louisiana (8.4%) and Arizona (8.5%).

   Tax Foundation rankings are sometimes confused with rankings based
on Census Bureau's tallies of state and local tax collections. The
difference is out-of-state tax payments. When state and local
governments collect large amounts from non-residents, whether as
tourists, commuters, businesses or property owners, Census counts
those payments in the collections of the taxing state; the Tax
Foundation study counts them in the residential state of the taxpayer.

   The most recent estimates are for fiscal year 2008 which ended
June 30, and the historical burden data cover the 32 years starting
with 1977.

   Historical data and rankings, sorted by year and by state, are
available to reporters on an embargoed basis. At 10 a.m. ET on
Thursday, they'll be posted at and The new report,
"State-Local Tax Burdens Dip As Income Growth Outpaces Tax Growth,"
will also be posted Thursday morning at 10 a.m. ET at

   The Tax Foundation is a nonpartisan, nonprofit organization that
has monitored fiscal policy at the federal, state and local levels
since 1937.

Tax Foundation
William Ahern, 202-464-5101

Copyright Business Wire 2008
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