New York Ranks Highest, Alaska Lowest, in State Taxes

You can’t escape death or taxes, the adage goes. But Alaska residents come closest to disproving the part about taxes.

Alaskans don’t pay state levies on income, sales or inheritance, so they enjoy the lowest taxes of any state, Money magazine says in its annual state-tax ranking. New Yorkers pay the most.

The ranking compares taxes in the 50 states and the District of Columbia on a typical two-income family of four that subscribes to Money. That family earned $72,385 in 1992, plus $4,709 in interest, dividends and capital gains, and had $35,112 in expenses.

Alaska, with no earned-income, statewide sales or inheritance taxes, would charge that household only $1,632 a year, the lowest in the country. Most of that is property taxes.

After Alaska, Wyoming would charge the typical Money magazine household $2,945, Nevada $3,539, Florida $3,846 and Tennessee $4,038 for the same family, Money says.

In addition to the five most affordable tax states, the next four also do not charge any personal income tax: South Dakota, New Hampshire, Texas and Washington.

California ranks 35th on the list, charging $7,605.

On the other end of the tax spectrum, New York, which has the nation’s highest combined state and local sales tax of 8.5%, would levy a total of $10,016 for the same family.

Following New York is the District of Columbia at $9,348, then Wisconsin and Massachusetts, each at $8,770, followed by Maine at $8,611.

All state income tax estimates were provided by the state and local tax group at Ernst & Young, the accounting and management consulting firm.

Money received property tax information from Citizens for Tax Justice, a Washington-based research and advocacy group. Money used sales tax information from Vertex Systems, Inc., a Berwyn, Pa.-based sales tax reporting service.