Kiplinger’s Tax Map: About Our Methodology

Our maps and other tax content include data and state tax-policy details from a wide range of sources. To create our rankings, we created a metric to compare the tax burden in all 50 states and the District of Columbia.

Data sources:

Income tax

We looked at each state’s tax agency, plus this helpful document from the Tax Foundation. Effective tax rates represent the ratio of income tax due to state taxable income for our sample filers. See more about that calculation below under “Rankings.”

Property Tax

Values for median property tax paid and assessed home value in each state come from the U.S. Census American Community Survey and are 2017 data, the most recent available. We created a ratio of these: average taxes paid per $100,000 of home value.

Sales tax

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

Fuel taxes

The American Petroleum Institute prepares a quarterly update of state rates. We used July 2019 data but made several updates to reflect new rates in Arkansas and Alabama. Values include excise taxes, sales taxes (when applicable) and a variety of fees that states impose.

Sin taxes

Inheritance & gift taxes:

Each state’s tax agency.

Wireless taxes:

The Tax Foundation.

Ranking method

The “tax-friendliness” of a state depends on the sum of income, sales and property tax paid by our sample filers.

To determine income tax, we prepared returns for a married couple with two dependent children, an earned income of $150,000, and qualified dividends of $10,000. They paid $10,000 in mortgage interest. Since some states have local income taxes, we domiciled our filers in each state’s capital, from Juneau to Cheyenne. We calculated these 2018 returns using software from Credit Karma.

How much the sample filers paid (and deducted on their income tax return) in property taxes was calculated assuming a residence with $400,000 assessed value and each state’s average tax rate.

How much they paid in sales taxes was calculated using the IRS’ Sales Tax Calculator, which is localized to zip code. To determine those, we used Zillow to determine zip codes with housing inventory close to our sample assessed value.

We also calculated the effective tax rate for a single filer (earning $32,000 a year, with no dependents), but those returns were not used to calculate rankings.

• Cigarette & tobacco taxes: Individual state tax web sites and the Coalition for Tobacco-Free Kids.
• Vapor products: The Tax Foundation
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• Alcohol Taxes: The Tax Foundation (beer, wine, spirits)