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Tax Breaks

Kiplinger's Tax Map: About Our Methodology

The research behind our judgments.


To create our rankings, we evaluated data and state tax-policy details from a wide range of sources. These include:

Income tax

We looked at each state's tax agency, plus this helpful document from the Tax Foundation. To determine the effective tax rates in each state, we prepared sample tax returns in each state for two income scenarios, using Credit Karma's online tax filing software for 2016. Our single filer made $45,000 a year and took the standard deduction. Our joint filer was a married couple with two dependent children, an earned income of $150,000, qualified dividends of $5,000, and $10,000 of mortgage interest and $3,000 of property taxes to deduct. To include local income taxes, we domiciled each return in the state's most populous location, with one exception: New York State, in which New York City's exceptionally high local income tax would have skewed the outcome.

Property Tax

Median income tax paid and median home values come from U.S. Census' American Community Survey and are 2015 data.

Sales tax

Each state's tax agency. We also cite the Tax Foundation's figure for average sales tax, which is a a population-weighted average of local sales taxes. In states that let municipalities add sales taxes, this gives an estimate of what most people in a given state actually pay, as those rates can vary widely.

Fuel tax

The American Petroleum Institute prepares a monthly update of state rates. We used July 2017 data.

Sin taxes

For tobacco and marijuana, each state's tax agency. For beer, wine, and spirits taxes, we drew on Tax Foundation data, which itself cites information collected by the Distilled Spirits Council of the United States.

Inheritance & gift taxes:

Each state's tax agency.

Wireless taxes:

The Tax Foundation.

Travel taxes:

Each state's tax agency, plus a lodging tax study published in 2015 by HVS Convention Sports and Entertainment Consulting. For car rental pricing, we excluded location-specific taxes (often levied to pay for improvements at airports) and fees applied by rental car companies to cover the registration taxes/fees on their fleets.

Fiscal stability:

While this is not a category per se, each state's balance sheet gives an indication of what its tax future might look like. We drew on the study Ranking the States by Fiscal Condition by the Mercatus Center at George Mason University.