Worst States for Taxes 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Worst States for Taxes 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
When evaluating state tax burdens, it is important to look beyond just income tax. The total tax burden includes income tax, sales tax, property tax, and excise taxes. Some states with no income tax compensate with high property or sales taxes, while others pile multiple tax types at above-average rates. This guide identifies the states with the highest overall tax burdens for 2026 and explains what drives those costs.
Top 10 Highest-Tax States (2026)
| Rank | State | Effective Total Tax Burden (% of Income) | Top Income Tax Rate | Avg. Sales Tax (Combined) | Avg. Property Tax Rate |
|---|---|---|---|---|---|
| 1 | New York | ~12.75% | ~10.90% | ~8.52% | ~1.62% |
| 2 | Connecticut | ~12.60% | ~6.99% | ~6.35% | ~1.96% |
| 3 | New Jersey | ~12.40% | ~10.75% | ~6.625% | ~2.23% |
| 4 | Illinois | ~12.30% | ~4.95% | ~8.81% | ~2.07% |
| 5 | California | ~11.50% | ~13.30% | ~8.68% | ~0.71% |
| 6 | Vermont | ~11.20% | ~8.75% | ~6.36% | ~1.83% |
| 7 | Minnesota | ~10.90% | ~9.85% | ~7.49% | ~1.02% |
| 8 | Maryland | ~10.80% | ~5.75% (+local) | ~6.00% | ~0.99% |
| 9 | Massachusetts | ~10.60% | ~9.00% | ~6.25% | ~1.15% |
| 10 | Oregon | ~10.20% | ~9.90% | None | ~0.87% |
What Drives High Tax Burdens
Income Tax
States with high graduated income tax rates create the largest tax burden for higher earners. California’s ~13.30% top rate and New York’s ~10.90% rate are the highest in the nation. However, even flat-tax states like Illinois (~4.95%) can produce high overall burdens when combined with steep property and sales taxes.
Property Tax
Property tax is often the largest annual tax expense for homeowners. New Jersey’s average effective rate of ~2.23% means a homeowner with a ~$400,000 home pays approximately ~$8,920 per year in property taxes alone. Illinois (~2.07%), Connecticut (~1.96%), and Vermont (~1.83%) also rank among the highest.
Sales Tax
Combined state and local sales tax rates push some states above ~9.00%:
| State | Combined Average Sales Tax |
|---|---|
| Tennessee | ~9.55% |
| Louisiana | ~9.56% |
| Arkansas | ~9.44% |
| Washington | ~9.29% |
| Alabama | ~9.24% |
While these states do not appear on the overall “worst” list because they lack income taxes or have low property taxes, their high sales tax rates significantly affect consumer purchasing power.
Excise and Other Taxes
Gas taxes, cigarette taxes, alcohol taxes, and transfer taxes vary widely and contribute to total burden. Notable examples:
- Pennsylvania: Gas tax of ~$0.614 per gallon, one of the highest nationally
- Connecticut: Cigarette tax of ~$4.35 per pack
- New York: Estate tax with an exemption of only ~$6,940,000 and a “cliff” that taxes the entire estate if it exceeds the exemption by more than ~5%
State-by-State Analysis
New York (#1)
New York’s top income tax rate of ~10.90% combines with NYC’s ~3.876% city income tax for residents, creating a combined rate above ~14.70%. Property taxes average ~1.62% statewide but reach ~3.00%+ in some downstate counties. The estate tax with its cliff provision further compounds the burden for high-net-worth residents.
Connecticut (#2)
Despite a top rate of only ~6.99%, Connecticut’s recapture mechanism effectively raises marginal rates above ~7.00% for certain income levels. Property taxes averaging ~1.96% are among the nation’s highest, and the state also imposes an estate tax with an exemption lower than the federal amount.
New Jersey (#3)
New Jersey combines the nation’s highest property taxes (~2.23%) with a top income tax rate of ~10.75% on income over ~$1,000,000. An inheritance tax and estate tax create additional costs for wealth transfer.
Illinois (#4)
Illinois’s flat ~4.95% income tax seems moderate, but combined sales tax rates averaging ~8.81% and property taxes averaging ~2.07% make it one of the most expensive states overall. Chicago residents face even higher effective rates.
Comparison to Lowest-Tax States
| Metric | Highest-Tax State | Rate | Lowest-Tax State | Rate |
|---|---|---|---|---|
| Income tax | California | ~13.30% | No-tax states | 0% |
| Property tax | New Jersey | ~2.23% | Hawaii | ~0.27% |
| Sales tax (combined) | Louisiana | ~9.56% | No-sales-tax states | 0% |
| Overall burden | New York | ~12.75% | Alaska | ~5.00% |
Tips for Managing a High-Tax State Burden
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Maximize deductions and credits. High-tax states typically offer generous deduction and credit programs. Ensure you claim every benefit available.
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Use tax-advantaged accounts. Maximizing 401(k), IRA, and HSA contributions reduces taxable income at both federal and state levels.
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Consider residency changes carefully. Moving from a high-tax to a low-tax state can save significantly, but establish clean domicile to avoid dual-state claims.
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Review property tax appeals. In high-property-tax states, appealing your assessment can yield meaningful annual savings.
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Track SALT deduction limits. The federal ~$10,000 SALT cap limits the federal benefit of state and local taxes, increasing the net cost.
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Plan for estate taxes. States with estate or inheritance taxes require separate estate planning beyond federal provisions.
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Evaluate the full picture. High-tax states often provide better public services, infrastructure, and education, which may justify the higher cost.
Key Takeaways
- New York, Connecticut, and New Jersey have the highest overall state tax burdens, driven by high income taxes, property taxes, or both.
- Illinois ranks highly due to steep property and sales taxes despite a moderate flat income tax.
- California and Oregon have among the highest income tax rates but offset some burden with lower property or no sales tax.
- Property tax is often a larger annual expense than income tax for middle-class homeowners.
- The federal SALT deduction cap of ~$10,000 amplifies the cost of living in high-tax states.
- Moving to a lower-tax state requires careful domicile planning to avoid continued taxation by the former state.
Next Steps
- Federal Income Tax Guide 2026 — How federal taxes interact with high state burdens.
- State Income Tax Rates Comparison 2026 — Compare all 50 states side by side.
- Tax Bracket Calculator — Estimate your combined federal and state burden.
- Self-Employment Tax Guide — Additional tax layers for self-employed in high-tax states.
- Find a CPA Near You — Get expert advice on reducing your state tax burden.