Tax Rates and Tax Burdens In the District of Columbia

Government of the

District of Columbia

Muriel Bowser

Mayor

Fitzroy Lee

Chief Financial Officer

Tax Rates and Tax Burdens

In the District of Columbia -

A Nationwide Comparison

2020

Issued April 2022

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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Table of Contents

Tax Rates and Tax Burdens in the District of Columbia:

A Nationwide Comparison

Table of Contents ......................................................................................................................... iii

Listing of Charts, Tables, and Maps .......................................................................................... iv

Executive Summary ..................................................................................................................... vi

Acknowledgment .......................................................................................................................... ix

Part I: Tax Burdens in Washington DC Compared with Those in the Largest City in Each

State, 2020..……………………………………………………………………………………….1

Overview………………………………………………………………………………………….2

Why Do Tax Burdens Differ From One City to Another?.………………………………………3

Chapter I: How Tax Burdens are Computed for the Largest City in each State ................... 5

Individual Income Tax ........................................................................................................ 6

Real Property Tax ................................................................................................................ 8

Sales and Use Tax ............................................................................................................. 11

Automobile Taxes ............................................................................................................. 12

Chapter II: Overall Tax Burdens for Hypothetical Families in the Largest City in Each

State .............................................................................................................................................. 13

Chapter III: Comparing Specific Tax Burdens for a Hypothetical Family of Three in the

Largest City in Each State ......................................................................................................... 25

Individual Income Tax ...................................................................................................... 25

Real Property Tax .............................................................................................................. 31

Sales and Use Tax ............................................................................................................. 38

Automobile Taxes ............................................................................................................. 42

Chapter IV: How Do Tax Burdens in Washington DC Compare with Those in the Largest

City in Each State?...................................................................................................................... 46

Individual Income Tax ...................................................................................................... 46

Real Property Tax .............................................................................................................. 47

Sales and Use Tax ............................................................................................................. 48

Automobile Taxes ............................................................................................................. 48

Summary ........................................................................................................................... 48

Part II: A Comparison of Selected Tax Rates in DC with Those in the 50 States ................ 51

Tax Rate Comparisons at a Glance……………………………………….…………….……..52

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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Appendix... ................................................................................................................................... 71

Office Locations and Telephone Numbers ............................................................................... 79

Listing of Charts, Tables, and Maps

Charts

Charts 1a-e: 2020 Estimated Burdens of Major Taxes for 5 Hypothetical Families……......14-22

Chart 2: 2020 Income Tax Burdens for All Income Levels, Sorted by Highest Income Level .. 27

Chart 3: Residential Property Tax Rates in the Largest City in Each State, 2020 ...................... 34

Chart 4: 2020 Property Tax Burdens for All Income Levels, Sorted by Lowest Income Level..37

Chart 5: Composition of State and Local General Sales Tax Rates in Each of the 51 Cities as of

December 31, 2020………………………………………………………………………………39

Chart 6: 2020 Auto Tax Burdens, Family Earning $75,000/year………………………...…….45

Chart 7: Combined 2020 Tax Burdens at Each Income Level; Comparison of DC and the

Average of the 50 Cities................................................................................................................50

Tables

Tables 1a-e: 2020 Estimated Burdens of Major Taxes for 5 Hypothetical Families………..15-23

Table 2: States That Index Some Part of Their Individual Income Tax, 2020……………..…...29

Table 3: State and Local Income Tax Burden as a Percent of Income in the Largest Cities by

Type of Income Tax for a Hypothetical Family of Three, 2020…………………………………30

Table 4: Residential Property Tax Rates in the Largest City in Each State 2020........................ 33

Table 5: Housing Value Assumptions, 2020 ............................................................................... 35

Table 6: Cities That Allow Exemptions or Reduced Rates in the Calculation of Real Estate

Taxes for Homeowners, 2020 ....................................................................................................... 36

Table 7: State and Local General Sales Tax Rates in Each of the 51 Cities as of December 31,

2020............................................................................................................................................... 40

Table 8: Cumulative Tax Rates on Gasoline in the 51 Cities as of December 31, 2020……..…43

Table 9: Summary of Types of Automobile Registration Taxes 2020 ........................................ 44

Table 10: Automobile Tax Assumptions 2020 ............................................................................ 44

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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Table 11: Tax Burdens in Washington, DC for a Hypothetical Family Compared with the

Average for the Largest City in Each State by Income Level, 2020 ............................................ 49

Table 12: Comparison of Selected State Tax Rates ..................................................................... 52

Table 13: Individual Income Tax Washington Metropolitan Area .............................................. 53

Table 14: Individual Income Tax 43 States and the District of Columbia .................................. 54

Table 15: Characteristics of State Individual Income Taxes ....................................................... 58

Table 16: State Corporate Income Tax Rates .............................................................................. 60

Table 17: State Gross Premiums Tax Rates on Foreign (Out-of-State) Life Insurers ................. 61

Table 18: State General Sales and Use Tax Rates ....................................................................... 62

Table 19: State Beer Tax Rates .................................................................................................... 63

Table 20: State Light Wine Tax Rates ......................................................................................... 64

Table 21: State Distilled Spirits Tax Rates .................................................................................. 65

Table 22: State Cigarette Tax Rates ............................................................................................. 66

Table 23: State Gasoline Excise Tax Rates ................................................................................. 67

Table 24: State Motor Vehicle Sales and Excise Taxes............................................................... 68

Table 25: State Motor Vehicle Annual Registration Fees ........................................................... 69

Table 26: State Real Estate Deed Recordation and Transfer Tax Rates …………………….….70

Table 27: Population Changes of the Largest City in Each State ............................................... 77

Maps

Map 1: Total 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income (Family

Earning $75,000/Year) ……………………………………………………...…………….……. 24

Map 2: 2020 Income Tax Burdens (Family Earning $75,000/Year)……...………………...…..28

Map 3: 2020 Property Tax Burdens ($) (Family Earning $75,000/Year)…. ............................... 32

Map 4: 2020 Sales Tax Burdens (Family Earning $75,000/Year)...…………………………….41

Maps 5-9: Combined 2020 Tax Burdens (Inc., Prop., Sales, & Auto) as a % of Income ...... 72-76

Map 10: Population of the Largest Cities as a % of the State’s Total Population, 2020………..78

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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EXECUTIVE SUMMARY

State and local tax systems in the United States are widely diverse. The District of

Columbia and governments in the 50 states employ a broad range of taxes and fees to fund state

and local government operations. The combination of taxes and fees used by a particular

jurisdiction is dependent upon many factors, including revenue needs, the tax base of the local

government, the fiscal relationship between the state and local governments, constitutional

limitations in some states, and the level of local government services demanded by residents.

The District’s tax structure employs taxes typically used by local governments, such as

real and personal property taxes, deed taxes, and others. At the same time, the District has taxes

usually associated with the state level of government, such as the income tax, estate tax, sales

and use taxes, excise taxes, gross receipts taxes, and motor vehicle taxes. About two-thirds of the

District’s generated revenues come from taxes usually administered by the states.

However, the District’s tax rates are often compared to either state rates, or other city

rates, and typically not a combination of both rates that would be applicable to residents living in

those locales. As such, this study aims to calculate the combined state and local tax burdens that

would apply to a hypothetical family of three at five different income levels living in DC as well

as the largest city in each state. The study includes four main tax types: income, property, sales,

and auto taxes. For these four tax types, tax burdens are calculated by applying the relevant state

and local tax rates to economic data on average and median costs of various consumer goods and

housing. The study assumes that the incidence of each tax is on the individual and makes other

assumptions that affect the findings. These assumptions, the sources of data, and the steps taken

to arrive at the tax burdens are laid out in the following pages.

The main findings are presented in Charts 1a-e and Tables 1a-e (pages 14-23), with

combined tax burdens broken out by tax type and income level. Readers may view the rankings

at five income levels: $25,000, $50,000, $75,000, $100,000, and $150,000. At the $25,000/year

income level, the lowest combined tax burden is on a family living in Burlington, Vermont,

while the highest combined tax burden falls on a family earning $150,000 and living in

Bridgeport, Connecticut. Washington, DC’s combined tax burdens are lower than the 50-city

average for all five income levels in the study.

Income tax: Residents in 44 of the 51 cities in this study are subject to some type of

individual income tax at the state and/or local levels (Table 3, page 30). There are several types

of individual income tax systems, including graduated state and local rates, graduated state and

flat local rates, flat state and local rates (or fees), graduated state tax rates, and flat state rates

with exemptions. Income tax burdens in jurisdictions levying an income tax ranged from a low

of negative $1,290 in Burlington, Vermont, for a family earning $25,000 (this negative amount

represents an income tax refund due to a refundable Earned Income Tax Credit, to a high of

$11,213 for a family earning $150,000 and living in New York, New York.

Executive Summary

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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The District’s 2020 income tax structure included six rates, with the highest rate of 8.95 percent

applying to income over $1,000,000. The District’s income tax burden was below the average for

the 44 states that levied an income tax at the first four income levels in the report, and the fifth

lowest overall at the $25,000 income level due to a refundable Earned Income Tax Credit. The

income tax burden in DC was higher than the 44-city average for the highest income level

($150,000), resulting from the progressive structure of the District’s income tax.

Property tax: All 51 cities in this study levy a tax on real property located within the city,

and effective tax rates range from a high of $3.26 per $100 of assessed value in Detroit,

Michigan, to a low of $0.35 per $100 of assessed value in Honolulu, Hawaii (Table 4, page 33).

In addition, several jurisdictions allow tax exemptions and credits in the calculation of the real

property tax liability (Table 6, page 36). Property tax burdens range from a low of $180 on a

family earning $50,000 a year and living in Boston, Massachusetts (which has a generous

homestead exemption/credit), to a high of $18,018 on a family earning $150,000/year and living

in Newark, New Jersey.

In 2020, the District taxed residential property at a rate of $0.85 per $100 of assessed

value; and offered a $75,700 homestead deduction for owner-occupied residences. DC’s property

tax burdens were below the 50-city average for the top four income levels (all of those assumed

to own homes). However, the District’s property tax burden for those earning $25,000 (who are

assumed to rent) was slightly higher than the 50-city average. This is due to the high cost of

rental housing, and the assumption that a portion of rental payments goes toward the property

tax; however, DC’s rent burden is alleviated by a refundable property tax credit available to

lower-income homeowners and renters, which is administered through the income tax and

reflected in the property tax burdens in this report (it has been presented with the income tax in

previous reports).

Sales tax: As shown in Table 7, page 40, residents in 46 of the 51 cities studied are

subject to some form of sales and use tax. In 2020, the highest combined (state + local) sales tax

rates were in Los Angeles, California (10.5 percent); Chicago, Illinois (10.25 percent); Seattle,

Washington (10.1 percent); Birmingham, Alabama (10.0 percent); and New Orleans, Louisiana

(9.45 percent). Residents of Honolulu, Hawaii; Milwaukee, Wisconsin; and Portland, Maine

have the lowest combined sales tax rates. These lowest rates range from 4.5 to 5.5 percent total.

Sales tax burdens in jurisdictions levying a general sales tax ranged from a low of $689 for a

family earning $25,000 in Newark, New Jersey; to a high of $2,721 for a family earning

$150,000 in Birmingham, Alabama.

The District’s general sales tax of six percent is the fourth lowest of the rates in all 51

cities (seven other jurisdictions have the same combined rate), when looking at total state and

local sales tax rates combined. Consequently, sales tax burdens in DC were lower than the 50-

city average at all five income levels.

Auto tax: Table 9, page 44, indicates that residents in all 51 cities in this study pay some

type of automobile registration fee or tax—usually either a flat rate per vehicle or by weight of

the vehicle. In addition, either state or local personal property taxes on automobiles are levied in

10 of the cities. Auto tax burdens ranged from a low of $105 for a family earning $50,000 in

New Orleans, Louisiana, to a high of $2,547 for a family earning $150,000 in Omaha, Nebraska.

The District’s annual auto registration fees range from $72 to $155, depending on vehicle

Executive Summary

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

viii

weight, and are among the highest in the study; however, DC does not charge an annual excise

tax or personal property tax on automobiles. District gas tax rates were 28.8 cents per gallon, and

DC auto tax burdens were below the 50-city average for all five income levels.

There is no single pattern that characterizes either a high or low tax burden city. Details

concerning the various taxes levied and why the tax burdens differ from one jurisdiction to

another are presented in this publication. Part I compares selected tax burdens in DC with those

of the most populous city in each state, through December 31, 2020. Part II contains tax rate

tables for DC and the 50 states for 12 different types of taxes as of January 1, 2021.

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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ACKNOWLEDGMENT

Each year the Government of the District of Columbia, Office of the Chief Financial

Officer, Office of Revenue Analysis publishes several reports to provide information to the

residents and taxpayers of the District of Columbia about the tax rates of states and large cities.

The reports contain information about the rates and burdens of major taxes in the District of

Columbia compared with states and the largest city in those states.

This publication contains two reports: (I) Tax Burdens in Washington, DC Compared

with Those in the Largest City in Each State, 2020 and (II) A Comparison of Selected Tax Rates

in the District of Columbia with Those in the 50 States as of January 1, 2021. This information is

requested annually by committees of the US Congress and the District of Columbia Council. It is

provided pursuant to Public Law 93-407.

Correspondence concerning “Tax Rates and Tax Burdens in the District of Columbia – A

Nationwide Comparison” should be addressed to Lori Metcalf, Fiscal Analyst, Economic Affairs

Administration, Office of Revenue Analysis, 1101 4

th

Street, SW, Suite W770, Washington, DC

20024, telephone (202) 727-7775.

Appreciation is extended to the many state and local officials in various state offices who

responded to our state survey and provided data in response to our follow up inquiries. Their

cooperation in providing information and their helpful suggestions make this publication

possible. I would also like to thank Lori Metcalf, who conducted the research and prepared this

document, and Farhad Niami and Bob Zuraski who offered editing assistance.

Norton Francis,

Chief Economist &

Deputy Chief Financial Officer (Interim)

April 2022

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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Part I

Tax Burdens in Washington, DC Compared with

Those in the Largest City in Each State

2020

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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Overview

There is a wide diversity in state and local tax systems in the United States. The fifty

states and the District of Columbia employ a broad range of taxes and fees to fund state and local

government operations. The combination of taxes and fees used by a particular jurisdiction is

dependent upon many factors, including its revenue needs, the local government tax base, the

fiscal relationships between the state and the local government, constitutional and legal

limitations on the powers of taxation, and the jurisdiction’s philosophy of government taxation.

The District’s tax structure includes taxes typically imposed by local governments, such

as real and personal property taxes, deed taxes, and others. At the same time, the District also

levies taxes usually associated with the state level of government, such as individual and

corporate income taxes, excise taxes, and motor vehicle related taxes. About two-thirds of the

District’s locally generated revenues come from taxes usually administered by a state.

The District is often compared to other cities, or states, independently, and without

considering its unique situation of having taxes that both a city and a state normally levy.

Therefore, a primary goal of this study is to add the nominal state and local tax rates in a

consistent way to provide a comparison of tax burdens across major taxes in the District and the

largest city in each state. Further, this study defines the term ‘tax burden’ as the dollar amount of

taxes owed if the final incidence of each major tax examined (income, property, sales, and auto)

is on the individual.

1

This study compares the income, property, sales, and auto tax burdens in 51 different

jurisdictions for a hypothetical family of three, at five different income levels. For context,

Appendix Table 27 presents data on population and recent changes in population in these

jurisdictions. Appendix Map 10 shows the population of the largest cities as a portion of total

state population and illustrates how many people, and what portion of each state are represented

by the combined tax rates presented in this study.

Useful information and insights can be gleaned from comparing the tax burdens in one

jurisdiction with the burdens in other jurisdictions. However, in evaluating or interpreting these

comparisons, consideration should be given to special circumstances within each jurisdiction that

may affect tax burdens. Further, these tax burden comparisons reflect the assumptions used in

their computation. For this reason, it is important to study the methodology used in the report

before drawing conclusions. The methodology used in this report is best suited to provide a

relative comparison of tax burdens, within a single tax type and within a single year, across each

of the 51 cities studied.

As in past years, readers are advised not to compare the hypothetical tax burdens across

years; any number of small changes in the assumptions of the study can result in misleading

information under such comparisons. The purpose of the study remains to compare tax burdens

on a hypothetical household in different jurisdictions in a specific year, and not over time.

Further, the report does not include all taxes levied in each jurisdiction, as there are state

and/or local taxes not captured in the calculations here. However, the report makes every effort

1

This approach differs from the use of the phrase ‘tax burden’ that may be more common in the field of economics, which includes an economic

analysis of which group bears the ‘burden’ of a tax by ultimately having to pay it, also known as the ‘incidence’ of a tax.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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to consistently capture and measure tax burdens across jurisdictions for the taxes we include,

making comparisons of the relative tax burdens presented a key feature of the report.

Why Do Tax Burdens Differ from One City to Another?

In the following chapters, the differences in tax burdens for the largest city in each state

in the United States will be discussed. The assumptions used to compute the various tax burdens

will affect the relative tax burdens for the 51 cities. This is especially true for the real estate tax,

because both the methodology used to derive housing values and the relative housing values

from one income level to another and from one city to another are important determinants of the

real property tax burden. However, no matter what set of assumptions is used in such a study;

there will be substantial tax burden differences from one city to another. Some of the reasons for

these differences are as follows:

1) This study only measures major state and local tax burdens for individuals.

Business tax burdens also differ substantially from one city to another. Many

cities, because of a large manufacturing base or because of a dominant

industry, can shift a large portion of the tax burden away from individuals to

businesses. Cities in natural resource states, for example, may shift a

substantial portion of the tax burden to industry, thus exporting, to some

extent, their local government tax burden. Convention and tourist activity in

cities such as Chicago, Las Vegas, New York City, and Washington, DC, can

help reduce local tax burdens by increasing sales tax, gasoline tax, and

parking tax revenues from non-residents, another form of tax exporting.

2) Service demands in each of the 51 cities may vary a great deal. Cold weather

services, such as snow removal, in northern cities may increase costs.

Furthermore, residents of some cities simply desire, or are accustomed to,

more government services than residents of other cities.

3) The costs of providing services may differ substantially from one city to

another. Wage levels, efficiency of the work force, and costs of overhead

items, such as utilities, may be very different.

4) The tax base of each city is different. Cities that have a relatively large

percentage of employed residents will normally have a broad tax base. This

type of city can levy taxes at lower rates than can those with low levels of

employment or high levels of exempt property. External forces, such as the

federal presence in Washington, DC, can restrict the tax base. The tax base

can also be defined by the scope of a tax. For example, it is desirable from a

social point of view to exempt groceries from the sales tax; however, such an

exemption can narrow the sales tax base and may require a higher sales tax

rate to raise enough revenues.

5) The proportion of public versus private services may differ from one city to

another. Some cities may provide services such as garbage collection and

hospital care, while in other cities the private sector may perform these

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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services for a fee.

As a result, a city in which the private sector performs such functions may

have a lower tax burden than one in which these functions are performed by

the city. In these instances, the fees charged by the private sector represent

payments by individuals for public services that are not reflected in tax

burdens.

6) Certain taxes that are not discussed in this study may affect state and local tax

burdens. Taxes which are levied on individuals, but not covered by the study,

include liquor and cigarette taxes and taxes on public utility bills. Rates for

some of these taxes are listed at the end of the report.

As noted above, the number and kind of public services each city provides necessarily

has a bearing on the amount of revenue that must be raised. The tax burden comparisons in this

report should be studied in the context of these differing conditions, in addition to the

assumptions and methodologies used.

In addition to these factors which may apply to any jurisdiction, the District’s

circumstances further set it apart from other state and local governments. The Government

Accountability Office (GAO) has documented in the past that the District has had a structural

imbalance, due primarily to two factors. First, the District has a higher service delivery cost than

the average state fiscal system—due to the higher rates of poverty and crime associated with an

urban area, as well as a higher cost of living.

2

Further, the District’s revenue capacity is restricted

by the federal presence—the District cannot tax the income of non-residents who work in the city,

and as of Tax Year 2020 property assessments, 31 percent of the land value in the District is tax

exempt.

3

In spite of these restrictions, GAO notes that the District has a high revenue capacity.

The city’s economic and fiscal situation has changed over the past two decades; however, these

factors remain relevant when considering the District’s tax structure and its tax burdens.

2

“Structural Imbalance and Management Issues.” GAO–03–666. Government Accountability Office. Washington, DC: 2003. p. 1.

3

“DC Tax Facts 2021.” 2020 Tax Exempt Land Value as a % of Total Taxable and Exempt Land Value. Government of the District of

Columbia, Office of the Chief Financial Officer, Office of Revenue Analysis. Washington, DC: 2021. p. 51.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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CHAPTER I

How Tax Burdens are Computed

for the Largest City in Each State

Many taxpayers in the United States are aware that the amount of state and local tax

liability of an individual taxpayer varies from one jurisdiction to another. The extent of these

differences in state and local tax burdens across the country, however, may not be fully

recognized.

The taxing systems of states and local jurisdictions differ in many aspects. The

relationship of state taxes to federal tax law is one of several factors causing differences in tax

burdens from one state to another. Other differences reflect decisions by state and local

governments on what should and should not be subject to tax. For example, several states do not

levy an individual income tax, although for many others it represents a major source of state

funding. Tax burdens also differ because some states can shift a larger portion of governmental

costs to business and may be able to “export” some of their tax burden. This has been true, for

example, for energy producing states and states specializing in tourism.

This report compares the major state and local tax burdens of hypothetical households in

Washington, DC, with the burden for the households in the largest city in each of the 50 states

for 2020. The four major taxes used in the comparison are the individual income tax, the real

property tax on residential property, the general sales and use tax, and automobile taxes,

including the gasoline tax, registration fees, excise tax, and the personal property tax. This study

does not incorporate the effects of differing local tax burdens on the federal individual income

tax burden. Income and property taxes are deductible in computing federal income taxes and the

effect of federal deductibility is to reduce the overall difference in tax burdens between

jurisdictions.

All tax burdens reflect state and local tax rates. Tax burdens are compared for a

hypothetical family that consists of two wage-earning spouses and one school-age child. The

gross family annual income levels used are: $25,000, $50,000, $75,000, $100,000, and $150,000,

and income is assumed to have been earned in the city. The wage and salary split is assumed to

be 70-30 between the two spouses. The families at the top four income levels are assumed to

own a single-family home and to reside within the confines of the city. At the $25,000 income

level, the study assumes that the household rents and does not own its housing unit. The

assumptions used in the calculation of each major tax type are indicated on the following pages.

• Housing Values. The Census data typically used to arrive at a house value for each

income level were not released for 2020 due to disruptions in data collection caused by

the pandemic. To determine a median house value by metropolitan statistical area (MSA)

for the current report, data on median house values by MSA from the National

Association of Realtors (NAR) for both 2019 and 2020 were used to calculate a percent

growth figure. Next, median income levels by MSA from the Bureau of Economic

Analysis for 2019 and 2020 were used to calculate percent growth in median income

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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from 2019 to 2020. These two measures of growth from a consistent data series were

applied to the 2019 ACS data on median house value and median household income to

grow them to 2020. From there, we proceed with the standard methodology of creating a

linear multiplier from the median house value and median income within each MSA to

assign a house value at each income level for the MSA, as in previous reports.

4

• Mortgage Interest. The mortgage interest amount (for use as an itemized deduction in

the income tax) in the 2020 study is derived by calculating an amortization schedule for

the estimated home value for each income level in each city. Home values for calculating

the Mortgage Interest Deduction (MID) at each income level are calculated based on

median house values and median incomes for mortgage holders for a house purchased in

2015. A linear multiplier created from these two figures is used to derive a house value

for each income level at which home ownership is assumed.

• Renters versus Owners. The hypothetical family at the $25,000 income level in this

year’s study is assumed to rent, rather than own a home. Given the real estate values in

most cities around the country, the assumption that families earning $25,000 per year rent

may be more realistic than the assumption that they own a home.

Individual Income Tax

The five income levels used in this study are divided between wage and salary income. In

previous versions of this report, capital gains and interest income were included, as well as the

assumptions of major itemized deductions on the following page. However, capital gains and

interest income are not included in the current report to remove some of the variation that

inconsistently changed the original income levels used, with little methodological benefit. (See

the following page for more information on the itemized deductions that continue to be included

in this report.) The following income levels are used for the income tax starting point in each

state and the District of Columbia, where Spouse 1 is assumed to earn 70 percent of the total

income and Spouse 2 is assumed to earn 30 percent.

5

Gross

Income:

$25,000

$50,000

$75,000

$100,000

$150,000

Spouse 1:

$17,500

$35,000

$52,500

$70,000

$105,000

Spouse 2:

7,500

15,000

22,500

30,000

45,000

Total itemized deductions used for calculating state and local income taxes, which are

also used in the federal tax computation, are shown below. The methodology for two of the

itemized deductions—the medical and dental expenses deduction and the charitable contribution

deduction—are consistent with the 2019 report, when the methodology changed from that used

in prior reports. In the past, the amounts for these deductions were based on actual average

deduction amounts for taxpayers within a range around each income level for Washington, DC,

4

This method may lead to lower house values than would be expected for some areas given the large jump in home values reported in DC and

other major cities in 2020. Because the data source takes the entire MSA into account and assigns a median house value by income level, the

values tend to be lower than they would be for the central cities alone. However, this method continues to be the best approach identified to allow

for the use of a consistent data source across each city in the report.

5

DC and various states allow married couples to file separately on the same return, even when filing jointly on the federal return. The tax

software used for calculating income tax burdens for this report automatically selects the most advantageous filing status.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

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taxpayers who were married filing jointly and had itemized deductions. However, in recent years

the pool of married taxpayers filing jointly that also itemized was insufficient at the lower

income levels to produce representative deduction amounts (perhaps resulting from the Tax Cuts

and Jobs Act of 2017 (TCJA) leading more taxpayers to take the standard deduction). Therefore,

beginning in the 2019 report, Internal Revenue Service (IRS) data for all itemizers in tax year

2019 were used to calculate the average percent of AGI reflected by the medical deduction,

which is eight percent of AGI. For charitable contributions, the level of four percent of AGI is

applied across incomes.

6

These changes in the methodology make the inputs in the income tax

calculations more consistent across incomes and conform more closely to the methodology

across the other tax types (which do not rely on DC-specific data).

Gross Income Level

Deduction $ 25,000 $ 50,000 $ 75,000 $100,000 $150,000

Medical (Gross) 1/ 2,000 4,000 6,000 8,000 12,000

Nondeductible Medical 2/ -1,875 -3,750 -5,625 -7,500 -11,250

Net Medical Deduction 125 250 375 500 750

Deductible Taxes 3/ 3/ 3/ 3/ 3/

Mortgage Interest 4/ 4/ 4/ 4/ 4/

Contribution Deduction 2/, 5/ 1,000 2,000 3,000 4,000 6,000

Total Deductions-without taxes

And mortgage interest 6/ 1,125 2,250 3,375 4,500 6,750

1/ Medical deductions above 7.5 percent of federal AGI are allowed. All or part of medical deduction

may be allowed in some states.

2/ Beginning with the 2019 Study, a new methodology was used for assumptions of medical and contribution deductions.

8% of AGI for medical (minus the 7.5% of AGI limit); 4% for charitable contribution. Based on analysis of data from:

IRS. Table 2.1. Returns with Itemized Deductions: Sources of Income, Adjustments, Itemized Deductions by Type,

Exemptions, and Tax Items, by Size of Adjusted Gross Income, Tax Year 2019, and Tax Policy Center analysis of IRS

data on charitable giving (average % of AGI for all returns used for all incomes in this study).

3/The tax deduction varies from city to city and is based on real and personal property taxes computed in the current 2020

Study and individual income taxes computed in the 2019 study for tax year 2019.

4/ Assumed mortgage interest varies from city to city and is based on 5th year interest paid on a home purchased in 2015

at an interest rate of 3.85%.

5/ Contribution Deduction represents charitable contributions claimed.

6/ Note: the current report does not include miscellaneous deductions, taxable interest income or capital gains which have

been included in previous reports. Further, if all itemized deductions do not exceed the amount of the standard deduction,

the standard deduction amount will be automatically used.

Because the Federal Earned Income Tax credit (EITC) at the $25,000 income level in

some states will determine the state’s EITC, and because several states (such as Alabama, Iowa,

Louisiana, Missouri, Montana, and Oregon) allow the deduction of all or part of an individual’s

federal income tax liability in computing the state income tax, it is necessary to compute the

2020 federal individual income tax at each income level using the above assumptions. Many

states in 2020 allowed taxpayers to begin their state income tax computations with federal

adjusted gross income (AGI) or federal taxable income. Other states do not use either of these

two measures of federal income as a starting point.

6

Tax Policy Center analysis of IRS data on charitable giving (average % of AGI for all returns used for all incomes in this study)

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

8

Further, depending on levels of deductions used in each state, the standard deduction may

be more advantageous for certain taxpayers. In 2020, the federal standard deduction was $24,800

for married taxpayers filing jointly; and state level standard deductions varies by state (see Table

14 for more detail on state income tax parameters). Because the federal standard deduction was

significantly increased in the TCJA of 2017, more of the families included will now take the

standard deduction. For the current study of tax year 2020, all families earning $75,000 per year

and below, and most of the families earning $100,000, would take the federal standard deduction

as it was higher than the itemized deductions assumed for these income levels in the report.

7

The 2020 deductible real and personal property taxes computed in the current year’s 51-

city study are used for the 2020 property tax deduction. For the 2020 state and local individual

income tax deduction, 2019 income tax burdens from the previous year’s study were used

(unless the calculated sales tax burdens were higher, which was often the case for the lower two

income levels). Each of these figures was used in computing the 2020 federal income tax burden,

which is the starting point for the state income tax burden calculations.

Real Property Tax

Real property tax burdens in the 51 cities are a function of residential real estate market

values, assessed values and the ratio of the two, and the tax rate. Some jurisdictions allow certain

deductions from the value of residential property before the tax is calculated while others allow

credits against the calculated real estate tax. These deductions and/or credits are normally limited

to owner-occupied properties.

The nominal property tax rates for each of the 51 cities, presented in Table 4 (page 33)

indicate a wide range in these rates. This information is based upon survey data received from

various state agencies and/or local assessors and is intended to represent the total rate applicable

to a homeowner in each city, inclusive of any state, city, and other local property taxes. In

addition to tax rate differences, data presented in Table 5 (page 35) indicate that the assumed

market value of a residence for purposes of this study varies widely from one city to another at

all income levels. For example, based on extrapolations of 2019 Census’ American Community

Survey (ACS) data and growth rates from two other consistent data series (see more below), the

estimated house value at the $75,000 income level ranges from a high of $433,527 in Honolulu,

Hawaii, to a low of $124,118 in Charleston, West Virginia.

The housing values for each income level (except the $25,000 income level) shown in

Table 5 were derived in a new way for the current study. Typically, house values are derived

from Census ACS data, using a median house value and median household incomes of mortgage

holders for each Metropolitan Statistical Area (MSA) within which the largest city in each state

falls. These two figures were then used to create a multiplier to assign a house value for each of

the income levels in the report which are assumed to own their own home ($50,000, $75,000,

$100,000, and $150,000). This year, the Census released 2020 ACS data in an experimental

format, which did not include MSA level house value data, and did not include any median

income data.

7

In some states, taxpayers taking the federal standard deduction are required to take the state’s standard deduction, even if itemizing would be

more advantageous at the state level. For the purposes of this report taxpayers eligible to take the federal standard deduction are assumed to have

done so.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

9

To determine a median house value by MSA for the current report, data on median house

values by MSA from the National Association of Realtors (NAR) for both 2019 and 2020 were

used to calculate a percent growth figure. Next, median income levels by MSA from the Bureau

of Economic Analysis for 2019 and 2020 were similarly used to calculate percent growth in

median income from 2019 to 2020. Using these two measures of growth within a consistent data

series, we then applied the growth measure to the 2019 ACS data on median house value and

median household income to grow them to 2020. From there, we proceed with the standard

methodology of creating a linear multiplier to assign a house value at each income level, as in

previous reports.

8

The use of the above methodology is an attempt to reflect the different values of housing

in different parts of the country and at different income levels. These are hypothetical values

based on income levels and do not represent average values for a particular jurisdiction.

For the present 2020 Study (just as in the 2018 and 2019 Studies), median sales ratio

statistics have been included where available to derive an “effective assessment level.”

9

A sales

ratio (or assessment sales ratio) is the ratio of the assessed value of the property to the sales

price, or market value of the property; the median is the median ratio value of all the properties

included in the study.

10

Median sales ratios are a measure of the property valuation and

assessment practices within a jurisdiction. If property assessments do not keep up with market

value, residents’ property taxes will be lower than they would otherwise be if taxed at the full

market value of the property. Including the available median sales ratio statistic into the property

tax burden calculations is an attempt to reflect how property tax systems in each jurisdiction are

administered in practice.

In computing property tax burdens, it is also necessary to consider the various

exemptions and credits noted in Table 6 (page 36). The variety of real property tax exemptions,

most of which apply only to residential real property, is very broad. Table 6 does not include

widely available exemptions that are not available to all homeowners, such as senior citizen

exemptions or credits for disabled persons, nor can it adjust for “caps” on the growth of assessed

values or limitations on tax liability over time. Some states have a type of assessment limitation

or valuation freeze. For example, strict limits in California mean many families’ assessments

would be much lower than those assumed here, particularly if they have owned their home for

many years.

Table 4 (page 33), which compares residential real estate tax rates for each city, does not

reflect the various exemptions and credits noted in Table 6 (unless the homestead exemption is

included in the assessment level or nominal rate, as is the case in a few states). Other exemptions

and credits may be available, such as those mentioned above for senior citizens, but are also not

reflected in Table 4 because seniors are not included in the hypothetical households of this study.

However, the property tax burdens computed and shown in Tables 1a-e of this study reflect the

8

Newark, New Jersey, falls in the New York City MSA and Wilmington, Delaware, falls in the Philadelphia MSA, thus those MSA data are

used for both cities. And as previously noted, this method may lead to lower house values than would be expected for some areas given the large

jump in home values reported in DC and other major cities in 2020. Because the data source takes the entire MSA into account and

assigns a median house value by income level, the values tend to be lower than they would be for the central cities alone. However, this method

continues to be the best approach identified to allow for the use of a consistent data source across each city in the report.

9

For Vermont, the Common Level of Appraisal value that is used for school funding equalization is used in lieu of a sales ratio statistic.

Similarly, an equalization statistic is used for Illinois.

10

“Glossary for Property Appraisal and Assessment,” International Association of Assessing Officers. 2013. Page 150.

https://www.iaao.org/media/Pubs/IAAO_GLOSSARY.pdf.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

10

provisions in Table 6 applicable to families owning and residing in their homes. In certain

jurisdictions, such as DC, MN, and VT, renter or property tax credits are provided as refunds

through the income tax and in previous years’ reports they were accounted for within the income

tax burdens. However, this year marks the first time this report has accounted for these refunds in

the property tax burdens presented. Various states offer income tax deductions and

nonrefundable credits for rent or property taxes paid; however, the distinguishing factor in our

presentation is that those included in the property tax burdens are refundable, regardless of

income tax owed.

Property Tax Equivalent of Rent

As previously noted, the study assumes that the family with an annual income of $25,000

does not own a home (and as a result does not pay property tax directly), but instead rents.

Because renters indirectly pay property taxes through their rent,

11

this study computes a

percentage of said rent constituting property taxes. This concept is called the property tax

equivalent of rent (PTER) and is an important tool in comparing the incidence of the property tax

on renters versus homeowners. In a 2021 50-State Property Tax Comparison report, the Lincoln

Institute of Land Policy and the Minnesota Center for Fiscal Excellence note that states vary in

how they tax rental properties in comparison to homesteads; on average, cities tax apartments 33

percent more than homesteads.

12

Their report presents a table illustrating this information for the

largest city in each state; Charleston, South Carolina, has the largest difference in effective rates

between apartment buildings and homesteads, taxing apartments almost four times the effective

rate of that levied on homesteads.

13

Conversely, in six of the largest cities in each state (and DC),

apartments are given preferential treatment over homesteads with the most preference toward

apartments given in Bridgeport, Connecticut.

14

In eight cities, apartments are given the same

treatment as homesteads.

To relieve the implicit tax burden on renters that exists in various locations, some states

have a property tax circuit breaker program that offsets renters’ tax burdens (often through the

income tax since they do not pay property taxes directly). These programs must make

assumptions of the PTER to calculate the amount that renters are paying in property taxes, and

the amount of relief they will receive through the circuit breaker program. Of the states that offer

circuit breaker programs, the PTER assumptions generally range from six to 25 percent (New

Mexico has a low of six percent while Massachusetts uses a 25 percent assumption); on average,

states assume that 17 percent of rent goes toward paying property taxes.

15

DC’s circuit breaker

program assumes 20 percent.

Prior to the 2016 Tax Burden Study, a 20 percent assumption was used with some

reservation given that it has a large impact on the calculated tax burdens of the families earning

$25,000 per year. The assumption often seemed unrealistic in cities with higher rental prices in

which calculated PTERs would be the highest, especially given that rental buildings in more

competitive markets may not be able to pass on all taxes paid since prices are set by the local

11

“50-State Property Tax Comparison Study for Taxes Paid in 2020.” The Lincoln Institute of Land Policy and the

Minnesota Center for Fiscal Excellence. June 2021: pg. 4.

12

Ibid.

13

Ibid, pg. 104-5.

14

Ibid. The study found that in Washington, DC, the classification ratio between apartments and homesteads is 1.069, indicating

that homesteads are treated slightly preferentially to rental buildings by the property tax rates (exclusive of credits) in DC.

15

Based on analysis of state programs in the Lincoln Institute of Land Policy’s Significant Features of the Property Tax

Database for 2017.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

11

market. And as the Lincoln report illustrates, the specific PTER level in a city is primarily based

on the tax system in each jurisdiction. It is not clear whether states with higher PTER

percentages in their circuit breakers have data leading to the choice of PTER percentage in their

state, or if these states are using the circuit breaker to provide a subsidy to lower income renters

hit hardest by higher rental markets.

16

In a January 2016 report, the Minnesota Department of

Revenue (MN DOR) used several techniques based on both ACS and internal tax data to assess

the percentage of rent that constitutes property taxes throughout Minnesota. MN DOR found the

statewide PTER hovered around 15 percent each year from 2009 to 2014, though in Minneapolis

it was often up to 16.9 percent.

17

After considering the available information we decided to use a level of 15 percent for

PTER in the 2016 Study and have continued to do so through the current 2020 Study to attempt

to be more realistic in the property tax burden on renters, particularly in cities with more

expensive rental markets. Future refinements may be made as new information and data become

available. The PTER in each city was calculated as 15 percent of median rents in each MSA.

These data were obtained from the US Department of Housing and Urban Development.

18

This

flat assumption means that any variation in the property tax burden for renters (families earning

$25,000) is driven by the housing market in each jurisdiction, and not the tax system in place.

Even with the lower assumption of PTER in the current study, this number still implies

that the lowest income families in the report are spending, on average, 45 percent of their

incomes on rent, with that portion being as high as 87 percent in Boston and New York City and

76 percent in Washington, DC. However, viewed in the context of some DC metro area statistics

it may not be that unrealistic. In 2017, of renters earning less than $50,000/year, more than 80

percent were spending over 30 percent of their income on rent.

19

A 2017 DC Fiscal Policy

Institute (DCFPI) analysis of 2014 Census data found that 42 percent of extremely low-income

renters (earning between $16,100 - $32,100/year for a family of four) in DC paid 80 percent of

their income or more in rent.

20

Further, a 2018 DCFPI analysis of 2016 Census data found that

63 percent of renters at this income level paid more than half of their income in rent.

21

Sales and Use Tax

The sales tax burdens included in this study are based on information from the 2020

Bureau of Labor Statistics’ Consumer Expenditure Survey (CES), and local and state sales tax

rates. The CES provides data on average consumer expenditures by income level. The average

expenditures by income level have been adjusted for a 3-person household. The same CES

categories have been included since the 2013 Tax Burden Study and include: food (at home);

food (away from home); over the counter drugs; housekeeping supplies, household furnishings,

and equipment; apparel and footwear; new and used cars and trucks; vehicle finance charges,

16

This discussion does not intend to assess appropriate levels of PTER used in circuit breaker programs. It is intended solely to consider whether

and how these levels are used as an input for the Tax Burden Study’s calculation of renter’s tax burdens as compared to homeowner’s tax burdens

across the 50 states.

17

The MN Renter’s Property Tax Refund program allowed renters to qualify for a refund on their rent of up to 17% of rent paid

(dependent on the renter’s income level) in 2019.

18

US Department of Housing and Urban Development, “2019 50th Percentile Rent Estimates.” Data for studio apartments used. HUD provides

data for Newark, NJ, but not for Wilmington, DE (thus the value for Philadelphia, PA, is used).

19

Analysis of US Census Bureau, 2013-2017 American Community Survey 5-Year Estimates.

20

Zippel, Claire. “A Broken Foundation: Affordable Housing Crisis Threatens DC’s Lowest-Income Residents.”

DC Fiscal Policy Institute. December 8, 2016.

21

Zippel, Claire. “Building the Foundation: A Blueprint for Creating Affordable Housing for DC’s Lowest-Income Residents.”

DC Fiscal Policy Institute. April 4, 2018.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

12

maintenance and repairs, and insurance; vehicle rentals, leases, and licenses and other charges;

public and other transportation; entertainment: fees and admissions, audio visual equipment and

services, and reading; and personal care products and services.

22

The CES expenditure data and the specific state and local tax rates on each type of item are used

to determine the sales tax that these expenditures would generate.

23

The state and local general

sales tax rates in each city are reported in Table 7, page 40. It is important to note that the sales

tax burdens will be a function of the size of the sales tax base in a particular jurisdiction and the

specific sales tax rates that apply to the consumer items included.

Automobile Taxes

Automobile taxes included in this study are gasoline taxes, motor vehicle registration fees

(state and local), excise taxes, and personal property taxes levied on automobiles. Table 10 (page

44) summarizes automobile ownership assumptions for each income level, including types of

vehicles, weight, value, and annual gasoline consumption.

22

In cases where a category includes items that are both taxed and not taxed, such as “drugs” which includes both prescription and over the

counter (OTC) drugs, the expenditure amount is divided by two before applying the tax rate of the item that is taxed (For example, states often

tax OTC drugs but not prescription drugs. Similarly, states often tax personal care products, but not personal care services.)

23

The consumer expenditure data between 2020 and 2019 shows more change in several categories than in previous years, presumably due to

the 2020 pandemic and subsequent economic recession. For example, the most noticeable change is that families at all five income levels in the

report spent considerably less in 2020 than in 2019 on food away from home, public transportation, and personal care products and services.

While families at all incomes in our study spend less on food away from home, the lower two income levels also spent less on food at home in

2020 than in 2019, while the three highest income levels spent more on food at home in 2020 than in 2019. Similarly, the highest income family

on average spent more in 2020 than 2019 on new cars and trucks and household furnishings, while the lowest income family spent less in both

categories in 2020 than in 2019.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

13

CHAPTER II

Overall Tax Burdens for

Hypothetical Families in the

Largest City in Each State

The major state and local tax burdens by tax type for the five different income levels used

in this study are presented in Tables 1a-e (pages 14-23). As reflected in Table 1, tax burdens

across the 51 cities vary widely at all income levels. At the $25,000 income level, the $4,933

combined burden of all four taxes added together for Seattle, Washington, is significantly greater

than the refund of $45 that a similar taxpayer in Burlington, Vermont, would receive (or the $433

tax that would be owed in Minneapolis, Minnesota). At the $150,000 income level, the

Bridgeport, Connecticut, tax burden of $25,638 is almost four times the Anchorage, Alaska, tax

burden of $6,491. Differences in state and local tax structures, as well as housing markets and

costs-of-living, contribute to the variation.

The highest combined tax burdens at the $25,000 income level occur in Seattle,

Washington; Philadelphia, Pennsylvania; Birmingham, Alabama; Los Angeles, California; and

Honolulu, Hawaii. Seattle’s high rental costs and sales taxes, coupled with a higher auto tax

burden put it at the top of the list. Philadelphia’s local wage tax adds to the state income tax to

make it the highest income tax burden at this income level, with the second highest combined

burden. The high property tax burdens (which are assumed to be a portion of rent) due to

expensive real estate markets in Los Angeles and Honolulu also put them on this list, while

Birmingham’s high sales tax burden contributes to its ranking. The lowest combined tax burdens

of all four taxes added together at the $25,000 income level occur in Burlington, Vermont;

Minneapolis, Minnesota; Washington, DC; Albuquerque, New Mexico; and Baltimore,

Maryland. Each of these has a refundable EITC, and Burlington, Vermont; Washington, DC; and

Minneapolis, Minnesota, each offer a renter’s refund through the income tax, which contributes

to their low rankings.

The highest combined tax burdens of all four taxes added together at the $150,000

income level occur in Bridgeport, Connecticut; Newark, New Jersey; Detroit, Michigan;

Baltimore, Maryland; and New York City, New York. The lowest combined tax burdens at this

income level are Anchorage, Alaska; Cheyenne, Wyoming; Sioux Falls, South Dakota;

Nashville, Tennessee; and Fargo, North Dakota. These lower tax burdens are primarily a result

of the lack of an income tax in all but one (ND) of these jurisdictions. Map 1 (page 24) illustrates

the combined burden of all four taxes for a family earning $75,000/year.

24

No single pattern characterizes a high or a low tax burden city. High tax burden cities

generally have a graduated individual income tax rate and/or high real estate tax rates and

moderate to high housing values. Low tax burden cities generally have a low or no individual

income tax and average or below average property tax rates.

24

See the Appendix (page 72) for maps showing the combined burdens by state for the other income levels.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

14

Chart 1a: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $25,000/Year

Source: ORA. Cities are ranked by total estimated tax burden as a percentage of income (highest at the top).

Note: Negative bars represent income tax refunds due to state EITC refunds (or refundable renter’s credits). See Table 1a on the following page for

totals and tax burdens as a percent of income and additional notes.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

15

Table 1a: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $25,000/Year

RANK

CITY

ST

TAXES

BURDEN

INCOME 2/

PROPERTY 3/

SALES 4/

AUTO

AMOUNT

PERCENT

1

Seattle

WA

-

3,128

1,267

538

4,933

19.7%

2

Philadelphia

PA

1,736

1,676

856

305

4,572

18.3%

3

Birmingham

AL

908

1,575

1,607

172

4,263

17.1%

4

Los Angeles

CA

(125)

2,488

1,208

516

4,086

16.3%

5

Honolulu

HI

0

2,842

787

314

3,943

15.8%

6

Chicago

IL

247

1,881

1,190

528

3,846

15.4%

7

Boston

MA

(591)

3,263

697

242

3,612

14.4%

8

Atlanta

GA

273

1,917

1,225

179

3,594

14.4%

9

New York

NY

(1,159)

3,278

1,097

268

3,484

13.9%

10

Nashville

TN

-

1,741

1,499

209

3,449

13.8%

11

Indianapolis

IN

835

1,292

940

330

3,398

13.6%

12

Kansas City

MO

252

1,309

1,346

425

3,332

13.3%

13

Denver

CO

(282)

2,178

1,074

289

3,260

13.0%

14

Louisville

KY

991

1,177

731

282

3,181

12.7%

15

New Orleans

LA

126

1,490

1,427

107

3,151

12.6%

16

Virginia Beach

VA

0

1,845

863

427

3,136

12.5%

17

Charleston

WV

818

1,039

823

440

3,119

12.5%

18

Portland

OR

515

2,264

-

331

3,111

12.4%

19

Charlotte

NC

53

1,757

885

384

3,079

12.3%

20

Charleston

SC

0

1,764

1,119

183

3,066

12.3%

21

Columbus

OH

625

1,307

888

240

3,059

12.2%

22

Jackson

MS

27

1,382

1,287

282

2,978

11.9%

23

Detroit

MI

799

1,237

719

203

2,957

11.8%

24

Salt Lake City

UT

0

1,510

1,125

300

2,935

11.7%

25

Phoenix

AZ

(75)

1,640

1,110

247

2,922

11.7%

26

Little Rock

AR

206

1,226

1,238

177

2,847

11.4%

27

Las Vegas

NV

-

1,393

1,040

372

2,805

11.2%

28

Oklahoma City

OK

(120)

1,312

1,299

187

2,678

10.7%

29

Houston

TX

-

1,598

893

167

2,658

10.6%

30

Sioux Falls

SD

-

1,141

1,119

234

2,494

10.0%

31

Portland

ME

(635)

2,047

715

322

2,449

9.8%

32

Cheyenne

WY

-

1,364

755

286

2,405

9.6%

33

Jacksonville

FL

-

1,350

835

192

2,377

9.5%

34

Providence

RI

(538)

1,525

857

491

2,335

9.3%

35

Omaha

NE

(358)

1,246

897

542

2,326

9.3%

36

Wichita

KS

(277)

1,022

1,306

151

2,203

8.8%

37

Wilmington

DE

313

1,676

10

145

2,143

8.6%

38

Des Moines

IA

(137)

1,156

832

267

2,117

8.5%

39

Newark

NJ

(877)

2,005

689

277

2,094

8.4%

40

Boise

ID

(290)

1,161

995

207

2,073

8.3%

41

Anchorage

AK

-

1,789

87

191

2,067

8.3%

42

Fargo

ND

0

1,057

811

198

2,066

8.3%

43

Milwaukee

WI

(143)

1,195

712

265

2,029

8.1%

44

Bridgeport

CT

(817)

1,706

773

329

1,992

8.0%

45

Manchester

NH

-

1,530

206

209

1,945

7.8%

46

Billings

MT

225

1,111

19

415

1,770

7.1%

47

Baltimore

MD

(1,161)

1,746

736

234

1,555

6.2%

48

Albuquerque

NM

(609)

1,102

936

124

1,553

6.2%

49

Washington

DC

(1,133)

1,667

811

203

1,548

6.2%

50

Minneapolis

MN

(1,136)

360

956

253

433

1.7%

51

Burlington

VT

(1,290)

251

782

212

(45)

-0.2%

AVERAGE

1/

(67)

1,602

922

282

2,733

10.9%

MEDIAN

0

1,525

890

265

2,847

11.4%

1/ Based on jurisdictions levying tax.

2/ Amounts in parentheses represent refundable State Earned Income Tax Credits. States with dashes do not have an income tax. Tennessee and

New Hampshire tax interest and dividend income but the exemptions are high enough to eliminate individual income taxes at all income levels

used in the study.

3/ Based on 15 percent of estimated annual rent.

4/ States with dashes do not have a sales tax. For states with no state sales tax where there is a small sales tax burden listed, such as AK, DE,

MT, and NH, some selective sales taxes apply to consumption items included.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

16

Chart 1b: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning 50,000/Year

Source: ORA. See Table 1b on the following page for totals and tax burdens as a percent of income and additional notes.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

17

Table 1b: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $50,000/Year

RANK

CITY

ST

TAXES

BURDEN

INCOME

2/

PROPERTY

3/

SALES

4/

AUTO

AMOUNT

PERCENT

1

Newark

NJ

1,086

6,006

908

283

8,283

16.6%

2

Bridgeport

CT

636

5,216

1,010

326

7,188

14.4%

3

Baltimore

MD

2,672

3,119

965

228

6,984

14.0%

4

Detroit

MI

2,664

2,524

928

206

6,322

12.6%

5

Louisville

KY

3,305

1,672

934

289

6,200

12.4%

6

Chicago

IL

2,012

2,058

1,476

519

6,065

12.1%

7

Philadelphia

PA

3,471

1,114

1,112

297

5,994

12.0%

8

Portland

OR

2,686

2,396

-

325

5,407

10.8%

9

Des Moines

IA

1,339

2,663

1,053

272

5,327

10.7%

10

Los Angeles

CA

0

3,255

1,541

513

5,309

10.6%

11

Indianapolis

IN

2,321

1,290

1,218

356

5,185

10.4%

12

New Orlean

LA

1,265

1,950

1,751

105

5,071

10.1%

13

Kansas City

MO

1,472

1,509

1,639

448

5,069

10.1%

14

New York

NY

2,076

1,255

1,429

262

5,022

10.0%

15

Providence

RI

730

2,649

1,101

515

4,996

10.0%

16

Birmingham

AL

2,088

843

1,883

170

4,984

10.0%

17

Columbus

OH

2,030

1,536

1,134

234

4,934

9.9%

18

Atlanta

GA

1,683

1,593

1,472

174

4,922

9.8%

19

Phoenix

AZ

534

2,593

1,428

318

4,874

9.7%

20

Jackson

MS

923

2,014

1,517

342

4,797

9.6%

21

Milwaukee

WI

591

2,940

913

260

4,705

9.4%

22

Virginia Beach

VA

1,687

1,376

1,063

442

4,567

9.1%

23

Omaha

NE

764

2,068

1,158

573

4,563

9.1%

24

Portland

ME

584

2,516

924

379

4,402

8.8%

25

Oklahoma City

OK

1,126

1,339

1,526

184

4,175

8.3%

26

Charleston

WV

1,955

706

1,042

453

4,156

8.3%

27

Salt Lake City

UT

1,196

1,160

1,396

336

4,089

8.2%

28

Wichita

KS

1,215

1,142

1,563

148

4,067

8.1%

29

Charlotte

NC

1,371

1,216

1,066

389

4,042

8.1%

30

Albuquerque

NM

737

1,895

1,176

121

3,930

7.9%

31

Seattle

WA

-

1,741

1,631

548

3,919

7.8%

32

Las Vegas

NV

-

2,122

1,350

431

3,903

7.8%

33

Denver

CO

1,131

1,017

1,374

370

3,893

7.8%

34

Little Rock

AR

1,201

1,013

1,502

175

3,891

7.8%

35

Burlington

VT

709

1,929

1,017

208

3,863

7.7%

36

Wilmington

DE

1,544

2,144

16

141

3,845

7.7%

37

Minneapolis

MN

1,078

1,036

1,237

274

3,625

7.2%

38

Billings

MT

1,642

1,409

32

421

3,504

7.0%

39

Nashville

TN

-

1,450

1,825

205

3,479

7.0%

40

Honolulu

HI

1,494

662

936

308

3,399

6.8%

41

Jacksonville

FL

-

2,020

1,075

187

3,282

6.6%

42

Charleston

SC

839

860

1,367

179

3,245

6.5%

43

Sioux Falls

SD

-

1,635

1,318

229

3,182

6.4%

44

Houston

TX

-

1,869

1,139

164

3,172

6.3%

45

Boise

ID

690

1,080

1,182

215

3,167

6.3%

46

Washington

DC

1,099

710

1,057

199

3,065

6.1%

47

Boston

MA

1,673

180

903

301

3,057

6.1%

48

Manchester

NH

-

2,488

281

206

2,974

5.9%

49

Fargo

ND

274

1,394

1,015

195

2,878

5.8%

50

Cheyenne

WY

-

1,380

971

333

2,684

5.4%

51

Anchorage

AK

-

1,784

143

194

2,121

4.2%

AVERAGE

1/

1,419

1,834

1,154

293

4,427

8.9%

MEDIAN

1,240

1,635

1,136

274

4,156

8.3%

1/ Based on jurisdictions levying tax.

2/ States with dashes do not have an income tax. Tennessee and New Hampshire tax interest and dividend income but the exemptions are

high enough to eliminate individual income taxes at all income levels used in the study.

3/ Some jurisdictions, including MN and VT offer a property tax credit of property taxes paid through the income tax and those refunds are

reflected in the income tax burdens.

4/ States with dashes do not have a sales tax. For states with no state sales tax where there is a small sales tax burden listed, such as AK, DE,

MT, and NH, some selective sales taxes apply to consumption items included.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

18

Chart 1c: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $75,000/Year

Source: ORA. See Table 1c on the following page for totals and tax burdens as a percent of income and additional notes.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

19

Table 1c: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $75,000/Year

RANK

CITY

ST

TAXES

BURDEN

INCOME 2/

PROPERTY 3/

SALES 4/

AUTO

AMOUNT

PERCENT

1

Bridgeport

CT

2,830

7,824

1,143

679

12,476

16.6%

2

Newark

NJ

1,750

9,009

1,051

543

12,353

16.5%

3

Detroit

MI

4,326

5,888

1,041

476

11,731

15.6%

4

Baltimore

MD

4,659

4,678

1,083

457

10,878

14.5%

5

Chicago

IL

3,180

3,432

1,654

1,047

9,313

12.4%

6

Louisville

KY

4,965

2,507

1,049

774

9,296

12.4%

7

Philadelphia

PA

5,206

1,965

1,280

553

9,004

12.0%

8

Portland

OR

4,586

3,594

-

618

8,798

11.7%

9

New York

NY

4,471

2,003

1,635

512

8,621

11.5%

10

Kansas City

MO

3,046

2,264

1,842

1,366

8,519

11.4%

11

Milwaukee

WI

2,435

4,528

1,027

497

8,487

11.3%

12

Des Moines

IA

2,522

4,058

1,181

709

8,470

11.3%

13

Providence

RI

1,668

3,974

1,234

1,530

8,406

11.2%

14

Los Angeles

CA

435

4,924

1,728

1,096

8,184

10.9%

15

Omaha

NE

1,961

3,103

1,301

1,744

8,108

10.8%

16

Portland

ME

2,095

3,953

1,038

859

7,945

10.6%

17

Indianapolis

IN

3,597

1,981

1,365

777

7,720

10.3%

18

Atlanta

GA

3,120

2,620

1,652

324

7,716

10.3%

19

Virginia Beach

VA

3,101

2,064

1,199

1,292

7,656

10.2%

20

Jackson

MS

2,009

3,093

1,708

818

7,628

10.2%

21

Columbus

OH

3,445

2,304

1,276

442

7,466

10.0%

22

Phoenix

AZ

1,175

3,890

1,602

689

7,356

9.8%

23

New Orleans

LA

2,145

2,925

1,968

213

7,252

9.7%

24

Charleston

WV

3,498

1,059

1,169

1,220

6,947

9.3%

25

Birmingham

AL

3,123

1,247

2,117

345

6,832

9.1%

26

Charlotte

NC

2,730

1,824

1,191

923

6,669

8.9%

27

Salt Lake City

UT

2,759

1,741

1,572

580

6,652

8.9%

28

Oklahoma City

OK

2,496

2,015

1,718

344

6,573

8.8%

29

Burlington

VT

1,497

3,450

1,173

394

6,513

8.7%

30

Albuquerque

NM

2,035

2,857

1,313

245

6,451

8.6%

31

Wilmington

DE

2,876

3,216

18

267

6,376

8.5%

32

Wichita

KS

2,529

1,736

1,763

278

6,305

8.4%

33

Boise

ID

2,421

2,118

1,332

394

6,265

8.4%

34

Minneapolis

MN

2,465

1,729

1,393

624

6,212

8.3%

35

Denver

CO

2,223

1,526

1,541

759

6,050

8.1%

36

Little Rock

AR

2,225

1,706

1,695

397

6,024

8.0%

37

Billings

MT

3,094

2,114

36

749

5,993

8.0%

38

Honolulu

HI

2,812

1,167

1,055

628

5,663

7.6%

39

Charleston

SC

2,536

1,240

1,530

351

5,657

7.5%

40

Seattle

WA

-

2,611

1,832

1,194

5,637

7.5%

41

Washington

DC

2,598

1,380

1,195

421

5,595

7.5%

42

Las Vegas

NV

-

3,183

1,515

808

5,506

7.3%

43

Jacksonville

FL

-

3,415

1,211

361

4,987

6.6%

44

Boston

MA

2,894

270

1,015

713

4,893

6.5%

45

Nashville

TN

-

2,175

2,051

390

4,617

6.2%

46

Manchester

NH

-

3,731

324

442

4,497

6.0%

47

Houston

TX

-

2,889

1,279

313

4,482

6.0%

48

Sioux Falls

SD

-

2,453

1,481

474

4,407

5.9%

49

Fargo

ND

549

2,091

1,135

373

4,147

5.5%

50

Cheyenne

WY

-

2,070

1,086

804

3,960

5.3%

51

Anchorage

AK

-

2,676

161

354

3,190

4.3%

AVERAGE

1/

2,764

2,868

1,299

650

7,068

9.4%

MEDIAN

2,664

2,507

1,280

553

6,669

8.9%

1/ Based on jurisdictions levying tax.

2/ States with dashes do not have an income tax. Tennessee and New Hampshire tax interest and dividend income but the exemptions are high

enough to eliminate individual income taxes at all income levels used in the study. 3/ Some jurisdictions, including MN and VT offer a property

tax credit of property taxes paid through the income tax and those refunds are reflected in the income tax burdens.

4/ States with dashes do not have a sales tax. For states with no state sales tax where there is a small sales tax burden listed, such as AK, DE,

MT, and NH, some selective sales taxes apply to consumption items included.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

20

Chart 1d: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $100,000/Year

Source: ORA. See Table 1d on the following page for totals and tax burdens as a percent of income and additional notes.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

21

Table 1d: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family Earning

$100,000/Year

RANK

CITY

ST

TAXES

BURDEN

INCOME 2/

PROPERTY

SALES 3/

AUTO

AMOUNT

PERCENT

1

Bridgeport

CT

4,382

10,431

1,441

701

16,955

17.0%

2

Newark

NJ

2,592

12,012

1,293

600

16,496

16.5%

3

Detroit

MI

5,989

7,850

1,310

498

15,647

15.6%

4

Baltimore

MD

6,647

6,238

1,375

480

14,740

14.7%

5

Chicago

IL

4,350

4,806

2,080

1,087

12,323

12.3%

6

Louisville

KY

6,625

3,343

1,317

774

12,060

12.1%

7

Philadelphia

PA

6,941

2,816

1,569

590

11,915

11.9%

8

Milwaukee

WI

3,985

6,115

1,287

518

11,905

11.9%

9

New York

NY

6,535

2,750

2,017

544

11,847

11.8%

10

Portland

OR

6,327

4,792

-

647

11,765

11.8%

11

Des Moines

IA

3,889

5,452

1,469

715

11,526

11.5%

12

Portland

ME

3,753

5,391

1,312

917

11,373

11.4%

13

Kansas City

MO

4,622

3,019

2,300

1,343

11,284

11.3%

14

Los Angeles

CA

1,195

6,594

2,178

1,183

11,150

11.2%

15

Omaha

NE

3,620

4,137

1,643

1,732

11,133

11.1%

16

Providence

RI

2,648

5,298

1,539

1,511

10,996

11.0%

17

Atlanta

GA

4,558

3,646

2,049

346

10,599

10.6%

18

Columbus

OH

5,049

3,071

1,595

466

10,181

10.2%

19

Jackson

MS

2,985

4,172

2,088

869

10,113

10.1%

20

Indianapolis

IN

4,883

2,672

1,723

831

10,109

10.1%

21

Virginia Beach

VA

4,538

2,751

1,484

1,321

10,095

10.1%

22

Burlington

VT

2,502

5,710

1,448

413

10,073

10.1%

23

Phoenix

AZ

1,826

5,186

1,993

721

9,726

9.7%

24

New Orleans

LA

3,025

3,900

2,447

225

9,597

9.6%

25

Boise

ID

4,153

3,198

1,657

415

9,423

9.4%

26

Charleston

WV

5,123

1,412

1,461

1,216

9,213

9.2%

27

Salt Lake City

UT

4,321

2,321

1,959

600

9,201

9.2%

28

Minneapolis

MN

4,056

2,568

1,742

657

9,023

9.0%

29

Albuquerque

NM

3,260

3,820

1,629

273

8,982

9.0%

30

Charlotte

NC

4,069

2,433

1,468

933

8,902

8.9%

31

Oklahoma City

OK

3,746

2,691

2,106

357

8,899

8.9%

32

Birmingham

AL

4,163

1,676

2,636

361

8,837

8.8%

33

Wilmington

DE

4,241

4,288

22

281

8,832

8.8%

34

Wichita

KS

3,954

2,329

2,176

294

8,752

8.8%

35

Little Rock

AR

3,559

2,400

2,062

411

8,432

8.4%

36

Billings

MT

4,511

2,819

44

787

8,160

8.2%

37

Washington

DC

4,122

2,050

1,505

482

8,159

8.2%

38

Charleston

SC

4,234

1,620

1,893

367

8,114

8.1%

39

Denver

CO

3,318

2,035

1,951

798

8,102

8.1%

40

Honolulu

HI

4,119

1,673

1,303

665

7,760

7.8%

41

Las Vegas

NV

-

4,244

1,915

978

7,137

7.1%

42

Seattle

WA

-

3,482

2,296

1,232

7,010

7.0%

43

Jacksonville

FL

-

4,811

1,530

392

6,733

6.7%

44

Boston

MA

4,130

451

1,286

768

6,634

6.6%

45

Nashville

TN

-

2,900

2,546

408

5,854

5.9%

46

Houston

TX

-

3,909

1,609

326

5,843

5.8%

47

Manchester

NH

-

4,975

401

457

5,834

5.8%

48

Sioux Falls

SD

-

3,270

1,809

493

5,571

5.6%

49

Fargo

ND

898

2,788

1,420

388

5,493

5.5%

50

Cheyenne

WY

-

2,760

1,374

838

4,972

5.0%

51

Anchorage

AK

-

3,699

197

366

4,262

4.3%

AVERAGE

1/

4,130

3,898

1,619

678

9,564

9.6%

MEDIAN

4,126

3,343

1,602

600

9,213

9.2%

1/ Based on jurisdictions levying tax.

2/ States with dashes do not have an income tax. Tennessee and New Hampshire tax interest and dividend income but the exemptions are high

enough to eliminate individual income taxes at all income levels used in the study.

3/ States with dashes do not have a sales tax. For states with no state sales tax where there is a small sales tax burden listed, such as AK, DE, MT,

and NH, some selective sales taxes apply to consumption items included.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

22

Chart 1e: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $150,000/Year

Source: ORA. See Table 1e on the following page for tax burdens as a percent of income and additional notes.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

23

Table 1e: 2020 Estimated Burdens of Major Taxes for a Hypothetical Family

Earning $150,000/Year

RANK

CITY

ST

TAXES

BURDEN

INCOME 2/

PROPERTY

SALES 3/

AUTO

AMOUNT

PERCENT

1

Bridgeport

CT

7,732

15,647

1,490

769

25,638

17.1%

2

Newark

NJ

5,493

18,018

1,322

597

25,430

17.0%

3

Detroit

MI

9,314

11,775

1,315

674

23,078

15.4%

4

Baltimore

MD

8,484

9,356

1,439

478

19,757

13.2%

5

New York

NY

11,213

4,244

2,043

537

18,037

12.0%

6

Portland

ME

6,742

8,266

1,355

1,649

18,011

12.0%

7

Milwaukee

WI

6,880

9,291

1,316

516

18,002

12.0%

8

Des Moines

IA

7,032

8,242

1,537

934

17,745

11.8%

9

Burlington

VT

5,702

9,915

1,508

411

17,536

11.7%

10

Portland

OR

9,697

7,188

-

644

17,528

11.7%

11

Louisville

KY

10,011

5,015

1,359

1,040

17,425

11.6%

12

Chicago

IL

6,687

7,555

2,119

1,029

17,391

11.6%

13

Omaha

NE

6,652

6,205

1,693

2,547

17,097

11.4%

14

Philadelphia

PA

10,412

4,517

1,568

586

17,083

11.4%

15

Los Angeles

CA

3,528

9,933

2,198

1,379

17,038

11.4%

16

Providence

RI

5,021

7,947

1,569

2,178

16,715

11.1%

17

Kansas City

MO

7,547

4,528

2,385

1,941

16,401

10.9%

18

Minneapolis

MN

7,384

4,985

1,816

999

15,184

10.1%

19

Jackson

MS

5,033

6,330

2,192

1,617

15,172

10.1%

20

Boise

ID

7,472

5,358

1,697

413

14,939

10.0%

21

Columbus

OH

8,245

4,607

1,609

464

14,925

9.9%

22

Indianapolis

IN

7,508

4,053

1,776

1,094

14,431

9.6%

23

Atlanta

GA

6,155

5,699

2,141

344

14,340

9.6%

24

Virginia Beach

VA

6,379

4,127

1,537

2,185

14,229

9.5%

25

Wilmington

DE

7,458

6,433

20

280

14,190

9.5%

26

Phoenix

AZ

3,047

7,780

2,067

1,186

14,080

9.4%

27

Charleston

WV

8,372

2,118

1,524

1,638

13,653

9.1%

28

New Orleans

LA

4,999

5,850

2,510

246

13,605

9.1%

29

Salt Lake City

UT

7,385

3,481

2,014

628

13,509

9.0%

30

Albuquerque

NM

5,647

5,744

1,736

280

13,407

8.9%

31

Charlotte

NC

6,695

3,649

1,575

1,146

13,065

8.7%

32

Washington

DC

7,533

3,390

1,570

480

12,973

8.6%

33

Little Rock

AR

6,556

3,788

2,138

472

12,953

8.6%

34

Oklahoma City

OK

5,898

4,042

2,211

366

12,517

8.3%

35

Billings

MT

7,339

4,228

39

895

12,502

8.3%

36

Charleston

SC

7,663

2,381

1,994

365

12,403

8.3%

37

Wichita

KS

6,102

3,517

2,225

292

12,136

8.1%

38

Denver

CO

5,599

3,052

2,005

1,303

11,959

8.0%

39

Birmingham

AL

6,043

2,535

2,721

392

11,691

7.8%

40

Boston

MA

6,591

2,253

1,298

1,446

11,587

7.7%

41

Honolulu

HI

6,798

2,685

1,335

653

11,470

7.6%

42

Las Vegas

NV

-

6,367

1,966

1,436

9,769

6.5%

43

Jacksonville

FL

-

7,601

1,570

390

9,561

6.4%

44

Seattle

WA

-

5,222

2,332

1,512

9,066

6.0%

45

Manchester

NH

-

7,463

427

958

8,847

5.9%

46

Houston

TX

-

5,948

1,683

325

7,956

5.3%

47

Fargo

ND

1,865

4,182

1,504

386

7,937

5.3%

48

Nashville

TN

-

4,349

2,628

406

7,383

4.9%

49

Sioux Falls

SD

-

4,905

1,903

491

7,299

4.9%

50

Cheyenne

WY

-

4,141

1,422

1,234

6,796

4.5%

51

Anchorage

AK

-

5,929

178

385

6,491

4.3%

AVERAGE

1/

6,855

5,997

1,672

875

14,156

9.4%

MEDIAN

6,770

5,222

1,646

644

14,080

9.4%

1/ Based on jurisdictions levying tax.

2/ States with dashes do not have an income tax. Tennessee and New Hampshire tax interest and dividend income but the exemptions are high

enough to eliminate individual income taxes at all income levels used in the study.

3/ States with dashes do not have a sales tax. For states with no state sales tax where there is a small sales tax burden listed, such as AK, DE, MT,

and NH, some selective sales taxes apply to consumption items included.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

24

Map 1: Total 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $75,000/Year)

Source: ORA. The lighter blue shading represents a lower tax burden.

AK: 4.3%

HI: 7.6%

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

25

CHAPTER III

Comparing Specific Tax Burdens

for a Hypothetical Family of

Three in the Largest City in Each

State

Individual Income Tax

Residents of 44 of the 51 cities in the study are subject to some type of an individual

income tax at the state and/or local levels (In NH and TN only interest and dividends are subject

to the income tax, but they are included in this count). Individual income tax burdens vary

widely due to factors such as differences in tax base, tax rates, exemptions, deductions, and

treatment of federal taxes. These variations are reflected in the individual income tax burdens

shown in Table 3 (page 30) and Chart 2 (page 27).

In twenty-five of the cities that are in states that levy an income tax, the percentage of

income paid in individual income taxes by the family earning $25,000 per year is zero percent

(or less than zero due to refundable credits). Notably, residents of Burlington, Vermont would

receive a refund of $1,290, making it the lowest income tax burden on a family earning $25,000

per year.

25

The highest income tax burden at this lower income level is $1,736, or 6.9 percent in

Philadelphia, Pennsylvania, and next at $991, or 4.0 percent in Louisville, Kentucky. At the

$150,000 income level, the burden ranges from a low of $1,865, or 1.2 percent of income in

Fargo, North Dakota, to $11,213 or 7.5 percent in New York City, New York. (New Hampshire

and Tennessee income taxes are applicable only to interest and dividend income and the

exemptions are high enough to eliminate individual income taxes at all income levels used in the

study).

Chart 2 on page 27 provides the income tax burdens on each hypothetical family, sorted

by the family earning $150,000 per year. Viewing the data this way allows an assessment of how

income tax burdens differ between the low- and high-income families in a city and state. Map 2

on page 28 presents the income tax burdens for the family earning $75,000/year.

Several state individual income tax systems are indexed for inflation either for their rate

brackets or credits or both. Indexing allows dollar amounts imbedded in the tax code to retain

their value and not erode. For example, a $10,000 bracket, the level at which income is taxed at a

certain rate, established in 2010 would have a “real” value of just over $12,000 now and

indexing would keep that value up to date. Absent indexing, a taxpayer would have more of their

income—which presumably is growing with inflation—exposed to the next bracket and a higher

rate. States that tax a percentage of federal net taxable income or a percentage of the federal

liability implicitly accept the federal indexing of tax brackets, exemptions, and the standard

deduction. Table 2 (page 29) lists the various portions that are indexed.

25

For the current 2020 Study, a Vermont renters refund is included in the property tax burdens.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

26

As Table 3 indicates, there are several types of individual income tax systems including

graduated state and local rates, graduated state and flat local rates, flat state and local rates (or

fees), graduated state tax rates and flat state rates with exemptions. The most common system is

the graduated state tax rate, which applies to taxpayers in 24 of the cities (this count includes

DC). Taxpayers in six cities are subject to a flat state tax rate with exemptions. Thirteen states

have either graduated or flat state rates and flat local rates (or fees). New York City residents are

subject to separate state and local income taxes, both of which are characterized by graduated

rate schedules. Fourteen cities in the current study apply a local income tax or fee on wages (see

table below).

Local Income Tax Rates, 2020

City

State

Tax

Rate

Birmingham

AL

Income Tax

1.0%

Denver

CO

Occupational Privilege Tax

$5.75/month

Wilmington

DE

Income Tax

1.25%

Indianapolis

IN

(County) Income Tax

2.02%

Louisville

KY

Income Tax

2.2%

Baltimore

MD

Income Tax

3.2%

Detroit

MI

Income Tax

2.4%

Kansas City

MO

Earnings Tax

1.0%

Newark

NJ

Payroll Tax

1.0%

New York

NY

Income Tax

3.078 - 3.876% (graduated rates)

Columbus

OH

Income Tax

2.5%

Portland

OR

(Tri-Met Transit District) Payroll Tax

0.77%

Philadelphia

PA

Wage Tax

3.87%

Charleston

WV

City Service Fee

$13/month

Sources: ORA analysis of City and State web pages.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

27

Chart 2: 2020 Income Tax Burdens for All Income Levels

Source: ORA; see description on page 6-8 for data sources and methodology.

Note: All data are sorted by the $150,000/year income level. Negative bars under the $25,000/year category represent tax refunds due to

state EITC or other refundable credits. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not have an

income tax. Tennessee and New Hampshire tax interest and dividend income but the exemptions are high enough to eliminate individual

income taxes at all income levels used in the study.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

28

Map 2: 2020 Income Tax Burdens (Family Earning $75,000/Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden. States with no label do not have an income tax.

AK: n/a

HI: 2,812

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

29

Table 2: States That Index Some Part of Their Individual Income Tax, 2020

STATE

INDEXED PORTION

Arizona

Tax brackets, standard deduction, personal exemption

Arkansas

Tax brackets, personal exemption

California

Tax brackets (partial), exemption (credit), standard deduction

Colorado

Standard deduction

Idaho

Tax brackets, standard deduction,

Illinois

Tax brackets, standard deduction, personal exemption

Iowa

Tax brackets, standard deduction

Kentucky

Standard deduction

Maine

Tax brackets, standard deduction

Michigan

Personal exemption

Minnesota

Tax brackets, exemptions, standard deduction

Missouri

Tax brackets, standard deduction

Montana

Tax brackets, exemptions, standard deduction

Nebraska

Tax brackets, Personal exemption, standard deduction

New Mexico

Standard deduction

New York

Tax brackets, standard deduction, personal exemption

North Dakota

Tax brackets, standard deduction

Ohio

Tax brackets (temporary freeze until 2022), personal exemption

Oregon

Tax brackets (up to $125,000), standard deduction credit, personal exemption

Rhode Island

Tax brackets, standard deduction, personal exemption

South Carolina

Tax brackets, standard deduction, personal exemption

Utah

Standard deduction

Vermont

Tax brackets, standard deduction, personal exemption

Washington, DC

Standard deduction

Wisconsin

Tax brackets, standard deduction

Sources: State Web Pages; Federation of Tax Administrators, "State Individual Income Tax Rates (as of January 1, 2020)"; Federation of Tax

Administrators, “State Individual Income Taxes: Federal Starting Points (as of July 1, 2020).” Tax Foundation, “Inflation Adjusting State Tax

Codes: A Primer,” October 29, 2019. Tax Foundation, “State Individual Income Tax Rates and Brackets for 2020.” February 4, 2020.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

30

Table 3: State and Local Income Tax Burden as a Percent of Income in the

Largest Cities by Type of Income Tax for a Hypothetical Family of Three,

2020

INCOME LEVELS:

CITIES WITH:

ST

$25,000

$50,000

$75,000

$100,000

$150,000

GRADUATED STATE AND LOCAL TAX RATES

New York City

NY

-4.6%

4.2%

6.0%

6.5%

7.5%

GRADUATED STATE AND FLAT LOCAL RATES

Birmingham

AL

3.6%

4.2%

4.0%

Wilmington

DE

1.3%

3.1%

3.8%

4.2%

5.0%

Baltimore

MD

-4.6%

5.3%

6.2%

6.6%

5.7%

Kansas City

MO

1.0%

2.9%

4.1%

4.6%

5.0%

Newark 1/

NJ

-3.5%

2.2%

2.3%

2.6%

3.7%

Columbus

OH

2.5%

4.1%

4.6%

5.0%

5.5%

Portland 1/

OR

2.1%

5.4%

6.1%

6.3%

6.5%

GRADUATED STATE RATE AND LOCAL FLAT FEE

Charleston 1/

WV

3.3%

3.9%

4.7%

5.1%

5.6%

FLAT STATE AND LOCAL TAX RATES 5/

Indianapolis 6/

IN

3.3%

4.6%

4.8%

4.9%

5.0%

Louisville

KY

4.0%

6.6%

6.7%

Detroit

MI

3.2%

5.3%

5.8%

6.0%

6.2%

Philadelphia

PA

6.9%

FLAT STATE RATE AND LOCAL FLAT FEE

Denver

CO

-1.1%

2.3%

3.0%

3.3%

3.7%

GRADUATED STATE TAX RATE

Little Rock

AR

0.8%

2.4%

3.0%

3.6%

4.4%

Phoenix

AZ

-0.3%

1.1%

1.6%

1.8%

2.0%

Los Angeles

CA

-0.5%

0.0%

0.6%

1.2%

2.4%

Bridgeport

CT

-3.3%

1.3%

3.8%

4.4%

5.2%

WASHINGTON

DC

-4.5%

2.2%

3.5%

4.1%

5.0%

Atlanta

GA

1.1%

3.4%

4.2%

4.6%

4.1%

Honolulu

HI

0.0%

3.0%

3.7%

4.1%

4.5%

Des Moines

IA

-0.5%

2.7%

3.4%

3.9%

4.7%

Boise

ID

-1.2%

1.4%

3.2%

4.2%

5.0%

Wichita

KS

-1.1%

2.4%

3.4%

4.0%

4.1%

New Orleans

LA

0.5%

2.5%

2.9%

3.0%

3.3%

Portland

ME

-2.5%

1.2%

2.8%

3.8%

4.5%

Minneapolis

MN

-4.5%

2.2%

3.3%

4.1%

4.9%

Jackson

MS

0.1%

1.8%

2.7%

3.0%

3.4%

Billings

MT

0.9%

3.3%

4.1%

4.5%

4.9%

Fargo

ND

0.0%

0.5%

0.7%

0.9%

1.2%

Omaha

NE

-1.4%

1.5%

2.6%

3.6%

4.4%

Albuquerque

NM

-2.4%

1.5%

2.7%

3.3%

3.8%

Oklahoma City

OK

-0.5%

2.3%

3.3%

3.7%

3.9%

Providence

RI

-2.2%

1.5%

2.2%

2.6%

3.3%

Charleston

SC

0.0%

1.7%

3.4%

4.2%

5.1%

Virginia Beach

VA

0.0%

3.4%

4.1%

4.5%

4.3%

Burlington

VT

-5.2%

1.4%

2.0%

2.5%

3.8%

Milwaukee

WI

-0.6%

1.2%

3.2%

4.0%

4.6%

FLAT STATE TAX RATE WITH EXEMPTIONS

Chicago

IL

1.0%

4.0%

4.2%

4.4%

4.5%

Boston

MA

-2.4%

3.3%

3.9%

4.1%

4.4%

Charlotte 2/

NC

0.2%

2.7%

3.6%

4.1%

4.5%

Manchester 3/

NH

0.0%

Nashville 3/

TN

0.0%

Salt Lake City

UT

0.0%

2.4%

3.7%

4.3%

4.9%

AVERAGE

4/

-0.3%

2.8%

3.7%

4.1%

4.6%

Note: Negative numbers result from refundable credits. AK, FL, NV, SD, TX, WA, and WY do not have an income tax.

Source: ORA Analysis; percentages are effective tax rates calculated using the assumptions and methodologies in this report.

1/ Imposed on employers.

2/ North Carolina has a flat rate, but no personal exemption.

3/ New Hampshire and Tennessee have a flat 5 percent income tax on dividends and interest income only, above personal exemptions.

4/ Based on jurisdictions levying tax and presented here.

5/ Because local income tax liabilities are included in this chart, the percentage of income exceeds the flat state tax rates for these states.

6/ Indiana allows for personal exemptions.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

31

Real Property Tax

All 51 cities in the study levy a property tax on residential property located within the

city. The real property tax is a function of housing values, real estate tax rates, assessment

practice, homeowner exemptions, and credits. Nominal rates used in Table 4 (page 33) represent

the “announced” rates levied by the jurisdiction, while effective rates consider how the assessed

value differs from market value in each city. Effective rates range from a high of $3.26 per $100

of assessed value in Detroit, Michigan to $0.35 per $100 of assessed value in Honolulu, Hawaii.

Statutory assessment levels vary dramatically from 1.35 percent of assessed value in Billings,

Montana, to 100 percent of assessed value in twenty cities, including the District of Columbia.

As previously mentioned, the current 2020 report includes median sales ratio statistics

where available to derive an “effective assessment level” that results from multiplying the

statutory assessment level times the median sales ratio statistic (see Table 4, page 33).

Local assessors, state tax and county officials provided the nominal rates, assessment

levels, and median sales ratios of each city and state. Research of government web sites was

performed to fill in any gaps to present the most accurate and updated information. The District’s

effective property tax rate (net of assessment value and median sales ratio) is among the lowest

of the 51 cities, ranking 45th. Chart 3 (page 34) provides a graphic of these rates.

The assumed housing values in the 51 cities at each of the five income levels are

presented in Table 5 (page 35). Housing values at the same income level vary a great deal based

on housing markets in each city. As previously mentioned, these housing values are extrapolated

from Census data and represent a hypothetical house value for each income level.

26

In addition,

several jurisdictions allow tax exemptions and credits in the calculation of the property tax.

These exemptions and credits are noted in Table 6 (page 36). This study does not consider the

impact of property tax caps that are available in some jurisdictions.

At all four of the income levels for which home ownership is assumed ($50,000 to

$150,000), Newark, New Jersey;

27

Bridgeport, Connecticut; and Los Angeles, California

consistently are among those with the highest property tax burdens for each income level. Other

locations that show up in the top five for at least four of the income levels include: Baltimore,

Maryland and Detroit, Michigan. For these cities, high property tax burdens primarily result from

a combination of high real estate tax rates and high housing values, as can be seen in Table 4

(page 33) and Table 5 (page 35).

At all four income levels, the lowest property tax burdens can be found in Boston,

Massachusetts; Charleston, West Virginia; Honolulu, Hawaii; and Birmingham, Alabama. These

low real estate tax burdens result from a combination of low effective real estate tax rates, below

average housing values, or an exemption program (as is the case with Boston, Massachusetts). At

the $50,000 level, Washington, DC is also among the lowest five tax burdens due to a refundable

property tax credit at this income level.

26

See page 9 for notes on methodology used for this year.

27

Newark, NJ, is in the New York City Metropolitan Statistical Area, thus the data used for Newark are the same as for NYC. See page 55 of the

2013 Tax Rates and Tax Burdens Study for a sensitivity analysis of how several cities’ (including Newark’s) property tax burdens would change

using city-level data.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

32

At the $25,000-income level, it is assumed that the families rent rather than own a home.

At this income level, New York, New York; Boston, Massachusetts; Seattle, Washington;

Washington, DC; and Honolulu, Hawaii, have the highest property tax burdens (assumed as a

portion of rent). This trend is solely due to the high cost of housing in these metropolitan areas,

as actual property tax rates are not applied in the case of rental housing (as previously

mentioned, 15 percent of the annual rent is assumed to go toward paying the property tax). A

refundable tax credit for renters in Washington, DC offsets this high tax burden to move the

renters’ burden at this level down to 21st among all the jurisdictions included. (Massachusetts

does offer an income tax deduction for 50 percent of rent paid).

Map 3 below illustrates the range of property tax burdens for a family earning $75,000 a

year. The darker the green shading in a state, the higher the tax burden. Chart 4 (page 37)

presents property tax burdens at each income level on one chart, sorted by the (rental) tax burden

on the family earning $25,000 per year. Viewing the data this way illustrates the differing

burdens on renters versus homeowners (however, as noted, the methodology for calculating the

property tax burdens on the lowest income group—using the property tax equivalent of rent—is

different than the property tax burden calculations for the other four income groups).

Map 3: 2020 Property Tax Burdens ($)

(Family earning $75,000/year)

Source: ORA Analysis. The lighter green shading represents a lower tax burden.

AK: $2,676

HI: $1,167

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

33

Table 4: Residential Property Tax Rates in the Largest City in Each State

2020

NOMINAL RATE

EFFECTIVE ASSESSMENT LEVEL

EFFECTIVE RATE

RANK

CITY

ST

PER $100 of Assessed

Value

(Incl. Median Sales Ratio) *

PER $100 of Assessed

Value

1

Detroit

MI

6.96

46.90%

3.26

2

Newark

NJ

3.80

84.18%

3.20

3

Indianapolis

IN

0.03

99.50%

2.95

4

Bridgeport

CT

5.39

52.08%

2.81

5

Milwaukee

WI

2.76

101.72%

2.81

6

Des Moines

IA

4.84

53.75%

2.60

7

Houston

TX

2.40

98.00%

2.35

8

Chicago

IL

6.91

10.00%

2.23

9

Baltimore

MD

2.36

94.40%

2.23

10

Burlington

VT

2.96

74.77%

2.21

11

Omaha

NE

2.24

94.00%

2.11

12

Manchester

NH

2.47

79.40%

1.96

13

Jackson

MS

19.13

10.00%

1.91

14

Providence

RI

2.46

74.53%

1.83

15

Portland

ME

2.33

77.00%

1.79

16

Jacksonville

FL

18.87

94.40%

1.78

17

Wilmington

DE

5.86

28.05%

1.64

18

Phoenix

AZ

15.54

10.00%

1.55

19

Atlanta

GA

4.10

37.42%

1.53

20

Columbus

OH

5.85

26.11%

1.53

21

Anchorage

AK

1.71

89.00%

1.52

22

New Orleans

LA

15.11

10.00%

1.51

23

Albuquerque

NM

4.80

29.97%

1.44

24

Louisville

KY

1.43

100.00%

1.43

25

Little Rock

AR

7.00

19.00%

1.33

26

Oklahoma City

OK

11.91

11.00%

1.31

27

Kansas City

MO

8.12

16.13%

1.31

28

Philadelphia

PA

1.40

93.20%

1.30

29

Sioux Falls

SD

1.62

79.99%

1.30

30

Minneapolis

MN

1.28

97.52%

1.25

31

Portland

OR

2.49

50.10%

1.25

32

Wichita

KS

11.68

10.56%

1.23

33

Los Angeles

CA

1.20

100.00%

1.20

34

Fargo

ND

29.21

4.06%

1.19

35

Charleston

SC

28.2

4.00%

1.13

36

Boise City

ID

1.20

93.50%

1.12

37

Las Vegas

NV

3.28

34.10%

1.12

38

Billings

MT

73.23

1.35%

0.99

39

Boston

MA

1.07

89.00%

0.95

40

Virginia Beach

VA

1.02

89.68%

0.91

41

Nashville

TN

4.22

21.19%

0.89

42

Cheyenne

WY

9.21

9.50%

0.88

43

Charlotte

NC

0.97

88.49%

0.85

44

Charleston

WV

1.58

54.00%

0.85

45

Washington

DC

0.85

97.80%

0.83

46

Seattle

WA

0.92

89.20%

0.82

47

New York

NY

22.23

3.58%

0.80

48

Birmingham

AL

7.25

9.95%

0.72

49

Salt Lake City

UT

1.22

52.86%

0.65

50

Denver

CO

74.20

7.15%

0.53

51

Honolulu

HI

0.35

100.00%

0.35

UNWEIGHTED AVERAGE

8.77

55.94%

1.51

MEDIAN

3.28

53.75%

1.31

NOTE: All rates and percentages in this table are rounded and include state and local property taxes levied by multiple taxing

authorities as identified by state survey respondents. Effective tax rates do not reflect any exemptions or credits noted in Table 6, or any

other property tax credits, deductions, or exemptions offered by the state or locality.

Source: Data collected from surveys to State and Local Revenue Department officials, and state and local web sites.

*Median assessment sales ratios where available are included with the statutory assessment levels to arrive at an “effective assessment level.”

For Milwaukee, WI, the nominal tax rate takes the assessment sales ratio statistic into account. For Chicago, IL the state equalizer of 3.2 is

reflected in the effective rate. For Vermont, the Common Level of Appraisal value for school funding equalization is used in lieu of a sales ratio

statistic.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

34

Chart 3: Residential Property Tax Rates in the Largest City in Each State

2020

Source: ORA Analysis of data from State and Local Revenue Officials and state and local web sites. See notes on Table 4 above.

Notes: Rates include state and local property taxes levied by multiple taxing authorities as identified by survey respondents and from jurisdictions’ web

sites. For Milwaukee, WI, the nominal tax rate takes the assessment sales ratio statistic into account. For Chicago, IL the state equalizer of 3.2 is reflected

in the effective rate. For Burlington, VT, the Common Level of Appraisal value for school funding equalization is used in lieu of a sales ratio statistic.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

35

Table 5: Housing Value Assumptions, 2020

HOUSING ASSUMPTIONS AT INDICATED INCOME LEVELS:

TAX ON RENT

HOUSE VALUE

CITY

ST

$25,000

$50,000

$75,000

$100,000

$150,000

Anchorage

AK

1,789

146,516

219,775

293,033

439,549

Birmingham

AL

1,575

119,090

178,634

238,179

357,269

Little Rock

AR

1,226

104,328

156,492

208,657

312,985

Phoenix

AZ

1,640

166,857

250,286

333,714

500,572

Los Angeles

CA

2,488

278,209

417,314

556,419

834,628

Denver

CO

2,178

191,778

287,666

383,555

575,333

Bridgeport

CT

1,706

185,494

278,242

370,989

556,483

WASHINGTON

DC

1,667

161,163

241,744

322,325

483,488

Wilmington

DE

1,676

130,419

195,629

260,839

391,258

Jacksonville

FL

1,350

156,687

235,030

313,374

470,060

Atlanta

GA

1,917

133,926

200,888

267,851

401,777

Honolulu

HI

2,842

289,018

433,527

578,036

867,054

Des Moines

IA

1,156

107,282

160,923

214,564

321,847

Boise

ID

1,161

192,671

289,006

385,341

578,012

Chicago

IL

1,881

123,386

185,079

246,772

370,158

Indianapolis

IN

1,292

114,664

171,997

229,329

343,993

Wichita

KS

1,022

96,319

144,479

192,639

288,958

Louisville

KY

1,177

117,294

175,941

234,588

351,882

New Orleans

LA

1,490

129,069

193,604

258,138

387,207

Boston

MA

3,263

189,756

284,633

379,511

569,267

Baltimore

MD

1,746

139,992

209,989

279,985

419,977

Portland

ME

2,047

160,169

240,254

320,338

480,507

Detroit

MI

1,237

120,210

180,316

240,421

360,631

Minneapolis

MN

360

133,088

199,632

266,175

399,263

Kansas City

MO

1,309

115,233

172,850

230,466

345,699

Jackson

MS

1,382

112,795

169,192

225,589

338,384

Billings

MT

1,111

142,552

213,828

285,104

427,656

Charlotte

NC

1,757

142,436

213,655

284,873

427,309

Fargo

ND

1,057

117,543

176,314

235,086

352,628

Omaha

NE

1,246

103,092

154,637

206,183

309,275

Manchester

NH

1,530

137,429

206,143

274,858

412,286

Newark

NJ

2,005

187,752

281,627

375,503

563,255

Albuquerque

NM

1,102

133,858

200,787

267,717

401,575

Las Vegas

NV

1,393

189,847

284,770

379,693

569,540

New York City

NY

3,278

187,752

281,627

375,503

563,255

Columbus

OH

1,307

113,159

169,738

226,317

339,476

Oklahoma City

OK

1,312

103,204

154,807

206,409

309,613

Portland

OR

2,264

192,057

288,086

384,115

576,172

Philadelphia

PA

1,676

130,419

195,629

260,839

391,258

Providence

RI

1,525

144,727

217,090

289,453

434,180

Charleston

SC

1,764

148,657

222,985

297,314

445,971

Sioux Falls

SD

1,141

125,840

188,759

251,679

377,519

Nashville

TN

1,741

162,076

243,113

324,151

486,227

Houston

TX

1,598

113,138

169,708

226,277

339,415

Salt Lake City

UT

1,510

179,571

269,357

359,142

538,713

Virginia Beach

VA

1,845

150,764

226,146

301,528

452,292

Burlington

VT

251

149,444

224,166

298,889

448,333

Seattle

WA

3,128

211,448

317,171

422,895

634,343

Milwaukee

WI

1,195

120,651

180,977

241,303

361,954

Charleston

WV

1,039

82,745

124,118

165,491

248,236

Cheyenne

WY

1,364

157,674

236,511

315,348

473,022

AVERAGE

1,602

147,907

221,860

295,814

443,721

MEDIAN

1,525

139,992

209,989

279,985

419,977

Source for "Tax on Rent": Rental price data are from the US Department of Housing and Urban Development, for 2020 median fair market rents

by MSA for studio apartments. The property tax equivalent of rent is assumed to be 15 percent of annual rent. Tax on Rent in DC, MN, and VT

includes a renters’ refunds calculated through the income tax and applied here in the property tax burden presentation.

Source for all other columns: ORA Calculations. A new method was used this year to estimate house values due to incomplete data from Census.

Data for both 2019 and 2020 on MSA median incomes from Bureau of Economic Analysis and MSA median house values from National

Association of Realtors were used to determine a percentage growth from 2019 to 2020 for both data series. That percent growth was then applied

to the 2019 data from the Census Bureau's American Community Survey and used in the 2019 Tax Burden Study. A multiplier was created based

on the relationship of median income to median home value and then applied to each income level by MSA. See page 9 for more detail. Newark,

NJ is in the same MSA as NYC, so the same house value and income data are used for both. Similarly, Wilmington, DE, is in the same MSA as

Philadelphia, and the same house value and income data are used for both.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

36

Table 6: Cities That Allow Exemptions or Reduced Rates in the Calculation of

Real Estate Taxes for Homeowners, 2020

CITY

STATE

EXEMPTION OR TAX

REDUCTION AMOUNT

BASIS OF TAX REDUCTION

OR EXEMPTION

Anchorage

AK

The lesser of 20% of the property value or $50,000

Assessed Value

Birmingham

AL

Up to $4,000 (local option to exempt $2,000 to $4,000)

Assessed Value-Homestead

Little Rock

AR

Up to $375 Credit for Homeowners

Tax Credit

Los Angeles

CA

$7,000 Exemption

Assessed Value

WASHINGTON 1/

DC

$75,700 Exemption

Assessed Value-Homestead

Jacksonville

FL

1.First Homestead Exemption - $25,000 exempt from all levies

2. Second Homestead exemption on value between $25,000 -

$50,00, non-school levies

Assessed Value

Atlanta

GA

$30,000 Exemption

Assessed Value

Honolulu

HI

$100,000 Exemption

Assessed Value

Des Moines

IA

The actual levy on the first $4,850 of actual value

Actual Value

Boise

ID

50% of Assessed Value, up to $100,000 Exemption

Assessed Value and Homestead up to

one acre

Chicago

IL

$10,000 Exemption

Assessed Value- Homestead

Indianapolis

IN

60% Deduction (maximum of $45,000)

Supplemental deduction of 35% deduction of AV less than

$600,000; 25% deduction of AV greater than $600,000.

Assessed Value-Homestead

Wichita

KS

Residential school levy exemption on first $20,000 of appraised

value; 20 mill Statewide School levy

Assessed Value

New Orleans

LA

$75,000 Exemption

Assessed Value

Boston

MA

Up to $3,153 Homeowner Exemption (Credit)

Assessed Value

Portland

ME

$20,000 Homestead Exemption

Assessed Value

Detroit

MI

Homestead Property Exempt from up to 18 mills of

Local School Operating Millage Tax

Taxable Value

Minneapolis

MN

Market Value Homestead Exclusion = (40%*MV of first

$76,000) minus (9%*MV of the value over $76,000)

Market Value

Jackson

MS

Exemption of $7,500 of assessed value, up to $300 maximum

tax savings.

Assessed Value

Omaha

NE

Real property tax credit = reduction in tax bill of $102.21 per

100,000 assessed value

Assessed Value

Albuquerque

NM

$2,000 Exemption

Taxable Value

New York City

NY

$30,000 Exemption on Primary Residence (STAR)

Equalized Assessed Value

Columbus

OH

Tax rate reduction of $0.17/$100 of assessed value

Assessed Value

Oklahoma City

OK

$1,000 Exemption

Assessed Value-Homestead

Philadelphia

PA

$45,000 Exemption

Assessed Value-Homestead

Providence

RI

40% reduction in assessment for homesteads

Assessed Value-Homestead

Charleston

SC

Owner occupied residential exempt from all school operating

taxes (a 50 percent reduction in taxes); County and Municipal

Local Option Sales Tax (LOST) Credit

Property Tax Relief Fund

Sioux Falls

SD

Lower School General Levy is appr. 50% reduced

Assessed Value

Houston

TX

20% County Exemption on Value

-Plus $15,000 Exemption on School District Taxes Only

-Plus, various exemptions on local levies, between 10% - 20%

of assessed value

Assessed Value

Salt Lake City

UT

45% Residential Assessment reduction

Taxable Value

Burlington

VT

Homestead reduction/property tax credit for income eligible

residence (available through income tax)

Household Income

Milwaukee

WI

School Levy Credit; Lottery and Gaming Credit; First Dollar

Credit

Equalized Assessed Value

Source: Data collected from surveys to State Revenue Department officials and review of State, and City, Revenue Department Web Sites.

Note: Many states and Washington, DC have assessment limitations, and these are not included.

1/ DC’s exemption amount increased to $76,350 on October 1, 2020 (effective for DC’s Real Property Tax Year 2021).

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

37

Chart 4: 2020 Property Tax Burdens for All Income Levels,

Sorted by $25,000 Income Level (Renters)

Source: ORA analysis; see description on page 8-11 for data sources and methodology. Note: the methodology for calculating burdens for the $25,000/year

income earning family differ from the calculations for the other four income groups and represents a property tax equivalent of rent.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

38

Sales and Use Tax

Residents of 46 of the 51 cities in this study are subject to some form of sales and use tax

at various levels of government. The combined sales tax rates range from 10.5 percent in Los

Angeles, California, to 4.5 percent in Honolulu, Hawaii, as illustrated in Chart 5, page 39, and

presented in Table 7, page 40. The highest state sales tax rate is 7.25 percent in [Los Angeles]

California, while the lowest state rate of 2.9 percent is found in [Denver] Colorado. Sales taxes

are levied by 23 of the 51 cities (in addition to state sales taxes) with the highest city rate at 6.0

percent in Washington, DC (and the only sales tax levied in DC), followed by 4.5 percent in New

York City. The lowest city rate was 0.5 percent Minneapolis, Minnesota. Of the 22 counties

levying a sales tax, the highest rate (3.0 percent) is in Fulton County (Atlanta, GA) and

Charleston County (Charleston, SC). One school district and eight transit districts also levy sales

taxes, with transit district rates ranging from 0.375 percent in New York, New York, to 1.0

percent in Chicago, Illinois; Denver, Colorado; and New Orleans, Louisiana.

Based on the results in Table 1, the average sales tax burden is the second highest of the

four major tax types at the $25,000 income level (after the property tax). For families subject to a

general sales tax, the highest sales tax burdens are in Birmingham, Alabama, for all five income

levels. Other jurisdictions ranking in the top five sales tax burdens at one of the income levels are

Nashville, Tennessee; New Orleans, Louisiana; Kansas City, Missouri; Wichita, Kansas; and

Seattle, Washington.

Cities and states that levy a general sales tax and have among the lowest sales tax burdens

at all income levels include Boston, Massachusetts; Newark, New Jersey; Milwaukee,

Wisconsin; Detroit, Michigan; and Honolulu, Hawaii. (In Table 1, Wilmington, Delaware;

Billings, Montana; Anchorage, Alaska;

28

and Manchester, New Hampshire have the lowest sales

tax burdens; however, these tax burdens are due to selective sales taxes that apply to rental car

expenses and are included in the calculations for this report. These jurisdictions do not have a

general sales tax and are therefore excluded from the counts on this page, as well as Chart 5 and

Table 7.)

It is important to note that the calculated sales tax burdens are not a direct function of the

general sales tax rates reported on the following pages as the consumer expenditures items used

to calculate burdens often have selective sales tax rates. For example, vehicle rentals and food

purchased away from home often have a higher sales tax rate than the general rate, while food

purchased for home consumption often has a lower rate. Further, not all jurisdictions have the

same sales tax base, meaning purchases of certain items could be taxable in one city, but not in

another.

28

Alaska allows local governments to levy a general sales tax, however, Anchorage does not levy one.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

39

Chart 5: Composition of State and Local General Sales Tax Rates in Each of

the 51 Cities as of December 31, 2020

Source: ORA analysis of data collected from a survey of State Revenue Department Officials.

Cities with no state or local general sales tax: Anchorage, AK; Billings, MT; Manchester, NH; Portland, OR; and Wilmington, DE.

* The 0.700 “transit district rate” in Virginia is a regional sales tax that is dedicated to a transportation fund.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

40

Table 7: State and Local General Sales Tax Rates in Each of the 51 Cities as

of December 31, 2020

CITY

STATE

TOTAL

RATE

(%)

STATE RATE

(%)

CITY RATE

(%)

COUNTY

RATE

(%)

SCHOOL

RATE

(%)

TRANSIT

RATE

(%)

OTHER

RATE

(%)

Los Angeles

CA

10.500

7.250

1.000

2.250

Chicago

IL

10.250

6.250

1.250

1.750

1.000

Seattle

WA

10.100

6.500

3.600

Birmingham

AL

10.000

4.000

1.000

New Orleans

LA

9.450

4.450

2.500

1.500

1.000

Nashville

TN

9.250

7.000

2.250

Little Rock

AR

9.000

6.500

1.500

1.000

Charleston

SC

9.000

6.000

3.000

Atlanta

GA

8.900

4.000

1.900

3.000

New York City

NY

8.875

4.000

4.500

0.375

Denver

CO

8.810

2.900

4.810

1.000

0.100

Oklahoma City

OK

8.625

4.500

4.125

Phoenix

AZ

8.600

5.600

2.300

0.700

Kansas City

MO

8.600

4.225

3.000

1.375

Las Vegas

NV

8.380

6.850

1.53

Houston

TX

8.250

6.250

1.000

Minneapolis

MN

8.025

6.875

0.500

0.150

0.500

Jackson

MS

8.000

7.000

1.000

Philadelphia

PA

8.000

6.000

2.000

Albuquerque

NM

7.875

5.125

2.75

Salt Lake City

UT

7.750

6.100

0.350

0.800

0.500

Wichita

KS

7.500

6.500

1.000

Columbus

OH

7.500

5.750

1.250

0.500

Fargo

ND

7.500

5.000

2.000

0.500

Charlotte

NC

7.250

4.750

2.000

0.500

Indianapolis

IN

7.000

Providence

RI

7.000

Burlington

VT

7.000

6.000

1.000

Charleston

WV

7.000

6.000

1.000

Jacksonville

FL

7.000

6.000

1.000

Des Moines

IA

7.000

6.000

1.000

Omaha

NE

7.000

5.500

1.500

Newark

NJ

6.625

Sioux Falls

SD

6.500

4.500

2.000

Bridgeport

CT

6.350

Boston

MA

6.250

Boise

ID

6.000

Louisville

KY

6.000

Detroit

MI

6.000

Baltimore

MD

6.000

WASHINGTON

DC

6.000

Virginia Beach

VA

6.000

5.300

0.700

Cheyenne

WY

6.000

4.000

2.000

Portland

ME

5.500

Milwaukee

WI

5.500

5.000

0.500

Honolulu

HI

4.500

4.000

0.500

UNWEIGHTED AVERAGE

7.570

5.653

2.402

1.338

1.500

0.709

0.660

MEDIAN

7.500

6.000

2.000

1.000

1.500

0.650

0.700

Source: Survey of State Revenue Department Officials, and state web sites.

Cities with no state or local general sales tax: Anchorage, AK; Billings, MT; Manchester, NH; Portland, OR; and Wilmington, DE.

Note: Unweighted average includes only those jurisdictions with a sales tax.

*These rates include state-side mandatory local add-on rates: CA: 1.25%; UT: 1.25%; VA: 1.0%

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

41

Map 4: 2020 Sales Tax Burdens (Family Earning $75,000/Year)

Source: ORA Analysis. The lighter blue shading represents a lower tax burden. Alaska, Montana, New Hampshire, Oregon, and Delaware do not have a general sales tax. All these states except Oregon

have a selective sales tax on some items included in the sales tax burden calculation.

AK: 0.21%

HI: 1.41%

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

42

Automobile Taxes

Residents of all 51 cities in this study are subject to gasoline taxes and some type of

automobile registration fee or tax. The automobile taxes included in this study are gasoline taxes,

state and local motor vehicle registration fees, annual excise taxes, and personal property taxes.

Residents in 10 of the cities are subject to a personal property tax based on the value of motor

vehicles owned by a taxpayer, while another 27 states or local jurisdictions levy some type of fee

or tax with various names (e.g., wheel tax, use tax, uniform fee, county option tax, etc.).

Taxpayers in at least 18 cities covered are subject to both state and local fees. Automobile

registration fees and taxes are usually either flat per-vehicle rates or excise taxes based on either

vehicle weight or value. The types of registration and other automobile taxes to which residents

of the 51 cities are subject are summarized in Table 9, page 44.

Gasoline tax rates in each of the 51 cities as of December 31, 2020, are compared in

Table 8, page 43. The total state and local gasoline tax rates vary from a high of 65.27 cents per

gallon in Los Angeles, California; 62.80 in Chicago, Illinois; 58.70 in Philadelphia,

Pennsylvania; and 52.21 in Seattle, Washington; to a low of 17.42 cents per gallon in Kansas

City, Missouri. Eleven states and five cities apply a sales tax to gasoline, and those rates are

included in the rates in the table.

The vehicle assumptions used for calculating automobile personal property taxes, excise

taxes, the gasoline tax, and registration fees are presented in Table 10, page 44.

The automobile tax burdens are generally the lowest of the tax burdens (by tax) at all

income levels in this study (except in those states that offer refundable tax credits through the

income tax at the $25,000 income level). Omaha, Nebraska has the highest auto tax burden at

every income level. Seattle, Washington; Providence, Rhode Island; and Virginia Beach, VA, are

also among the highest automobile tax burdens at each level. Other cities that show up in the top

five for at least two of the income levels include Chicago, Illinois; Los Angeles, California;

Kansas City, Missouri; and Charleston, West Virginia. These cities generally levy a personal

property tax, excise tax, or other type of annual tax, and several have among the highest gas tax

rates.

New Orleans, Louisiana, has the lowest automobile tax burdens at all income levels,

followed by Albuquerque, New Mexico. Other jurisdictions with low auto tax burdens at all

income levels include Wilmington, Delaware; Wichita, Kansas; and Houston, Texas. Each of

these cities has flat registration rates or registration by weight, moderate gasoline tax rates, or no

personal property or excise tax.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

43

Table 8: Cumulative Tax Rates on Gasoline in the 51 Cities,

as of December 31, 2020

(State and Local Rates per Gallon)

CITY

ST

TOTAL RATE

STATE RATE

LOCAL RATE

Los Angeles*+

CA

65.27

57.66

7.62

Chicago*

IL

62.80

51.80

11.00

Philadelphia

PA

58.70

Seattle

WA

52.21

Newark

NJ

50.75

Honolulu*+

HI

47.95

30.01

17.94

Portland

OR

46.00

36.00

10.00

New York City*+

NY

44.97

34.53

10.44

Indianapolis*

IN

42.30

Bridgeport*

CT

42.16

Columbus

OH

38.50

Detroit*

MI

37.70

Baltimore*

MD

36.49

Charlotte

NC

36.35

Charleston*

WV

35.70

Providence

RI

35.12

Atlanta+

GA

35.00

28.65

6.35

Jacksonville*

FL

34.40

Omaha

NE

34.10

Boise

ID

33.00

Milwaukee

WI

32.90

Las Vegas

NV

32.81

23.81

9.00

Billings

MT

32.75

Salt Lake City

UT

31.75

Portland

ME

31.40

Minneapolis

MN

30.60

Sioux Falls

SD

30.00

Des Moines

IA

30.00

Burlington

VT

29.84

Virginia Beach+

VA

29.40

21.80

7.60

Birmingham

AL

29.00

WASHINGTON+

DC

28.80

Little Rock*

AR

27.80

Nashville

TN

27.40

Boston

MA

26.86

Louisville

KY

26.00

Wichita

KS

25.03

Charleston

SC

24.75

Cheyenne

WY

24.00

Manchester

NH

23.83

Fargo

ND

23.03

Wilmington

1/

DE

23.00

Denver

CO

22.13

New Orleans

LA

20.93

Oklahoma City

OK

20.00

Houston

TX

20.00

Phoenix

AZ

19.00

Anchorage

AK

18.95

8.95

10.00

Albuquerque

NM

18.88

Jackson

MS

18.40

Kansas City

MO

17.42

UNWEIGHTED AVERAGE

32.67

30.80

9.52

MEDIAN

30.60

30.00

10.00

Note: Rates include state and local sales taxes applicable to gasoline and other fees (such as environmental or inspection fees).

*Indicates a state sales tax is included in the rate; + indicates a local sales tax is included in the rate.

Source: ORA Survey of State Revenue Department Officials and review of State Web pages; Federation of Tax Administrators, “State

Motor Fuel Tax Rates, as of January 1, 2020; US Energy Information Administration, “Federal and State Motor Fuels Taxes,” Updated

September 2020.

1/ Delaware has a 1.04% hazardous substance gross receipts tax applied at the wholesale level which is not included (0.9% as of

January 1, 2021).

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

44

Table 9: Summary of Types of Automobile Registration Taxes 2020

(50 states + DC)

TYPE OF REGISTRATION NUMBER OF STATES (& DC)

Flat Rate Only 22

Weight Only 13

Weight and Age 5

Horsepower Only 1

Age Only 3

Value Only 2

Value and Age 3

Value, Age, and Weight 2

51

OTHER AUTO TAXES (INCLUDING LOCAL) *

Personal Property 10

Excise 4

Other fees or taxes (incl. local registration) 27

*Based on State Survey responses. An excise tax is only applied in auto tax burden calculation if it is an annual tax.

Table 10: Automobile Tax Assumptions 2020

Market

Values

Estimated

Engine

Mileage

Annual

Income

Size

Retail

Trade-In

Loan

Per

Gasoline

Level

Description of

Auto

Liters 1/

Weight

2/

Year

Price 2/

Value 2/

Gallon 1/

Usage 3/

$ 25,000

Sedan, 4 Door

1.8

2,906 lbs.

2017

$14,425

$11,850

$14,281

33

455 gallons

4-cylinder, Auto

$ 50,000

Sedan, 4 Door

1.4

2,930 lbs.

2018

$15,525

$12,800

$15,073

34

441 gallons

4 Cylinder, Manual

$ 75,000

Sedan, 4 Door

2.5

3,340 lbs.

2019

$24,925

$22,075

$24,676

33

455 gallons

4 Cylinder, Automatic

4WD Utility, 4 Door

3.5

4,509 lbs.

2014

$24,400

$21,325

$24,156

21

357 gallons*

6 Cylinder, Automatic

$100,000

Sedan, 4 Door

2.5

3,490 lbs.

2019

$28,200

$25,205

$27,918

30

500 gallons

6 Cylinder, Automatic

4WD Utility, 4 Door

3.5

4,697 lbs.

2014

$19,800

$16,775

$19,602

20

375 gallons*

6 Cylinder, Automatic

$150,000

Sedan, 4 Door

2.0

3,659 lbs.

2020

$48,995

$46,327

$48,505

27

556 gallons

6 Cylinder, Automatic

AWD Utility, 4 Door

2.0

4,095 lbs.

2016

$20,025

$17,950

$19,825

24

313 gallons*

6 Cylinder, Automatic

1/ Gas Mileage Guide, EPA fuel economy estimates for city driving, US Department of Energy. http://www.fueleconomy.gov/

2/ National Automobile Dealers Association Used Car Guide. http://www.nadaguides.com

3/ Assumes 15,000 miles driven for primary car; 7,500 for secondary car (secondary car denoted with an asterisk).

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

45

Chart 6: 2020 Auto Tax Burdens, Family Earning $75,000/year

Source: ORA. See pages 41-44 for methodology and assumptions.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

46

CHAPTER IV

How Do Tax Burdens in

Washington, DC Compare with

Those in the Largest City in

Each State?

The nation’s capital, Washington, DC, is unique in many respects. It has a special status in

which the day-to-day activities and functions of state, county, city, and special districts are

combined in one governmental unit. The District’s Mayor and the 13-member District of

Columbia Council combine the functions of the executive and legislative bodies of each of these

governmental units. Due to this combination of responsibilities, the District has the taxing

powers of a state, a county, and a municipality, although these powers are limited by actions of

the federal government. The graduated income tax, the general sales and use tax, and the per

gallon gasoline tax are all comparable in form to those levied by most states. The property tax

based on assessed value is like the type levied in cities and counties. As a result, the tax burden

of District residents should be compared to the combined state and local burdens borne by

residents of other large cities.

The District of Columbia has a relatively high percentage of low-income taxpayers, which

limits the District's revenue-raising capacity. Despite these limitations, the District of Columbia

must perform and provide funding for functions usually provided at both state and local levels of

government. The non-municipal functions include responsibility for welfare programs, physical

and mental health care, and maintenance of the public education and state university systems.

The burden of each of the four major taxes for Washington, DC, is compared with the 50-

city average at all income levels in Table 11, page 49 and the individual tax comparisons are

described in more detail in the following sections. Further, Chart 7, on page 50 illustrates the

comparisons between DC’s overall combined burden and the 50-city average at each income

level. These two visuals show that DC’s combined tax burdens are lower than the 50-city

average for all five income levels in the study.

Individual Income Tax

As shown in Table 11 and based on the assumptions made in this report, the individual

income tax burden for Washington, DC is below the 50-city average at the first four income

levels and above the average at the $150,000 income level (the average is based on the cities and

states that levy an income tax). This is due to the District’s more progressive income tax.

Washington, DC levied an individual income tax with six rates in tax year 2020: 4.0 percent on

the first $10,000 of taxable income; 6.0 percent on the next $30,000 of taxable income; 6.5

percent on taxable income over $40,000 up to $60,000; 8.5 percent on taxable income over

$60,000 up to $350,000; 8.75 percent on taxable income greater than $350,000 and less than

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

47

$1,000,000, and 8.95 percent on taxable income over $1,000,000.

As a result of the 2017 Tax Cuts and Jobs Act (TCJA) and DC’s federal conformity

provisions, DC personal exemptions are reduced to zero for 2020, and the federal standard

deduction will apply. Thus, a standard deduction of $24,800 for joint married filers ($12,400 for

married filing separately) was in effect for the period of this study.

Itemized deductions are the

same as those allowed in computing the federal income tax (with a limit of $10,000 on state and

local deductions that can be itemized on the federal schedule A), and the District does not allow

the deduction of its own individual income tax. Washington, DC also has “circuit-breaker”

property tax relief programs for both elderly and non-elderly qualified homeowners and renters,

through which a credit can be claimed against a taxpayer’s income tax liability (the Schedule H

renters’ credit is refundable through the income tax and is included for the first time in the

property tax burden presentation in the current report).

The District’s income tax rates have changed and become more progressive in recent

years, with slightly decreasing rates on income between $40,000 and $60,000 and between

$350,000 and $1,000,000, while rates slightly increased on income over $1,000,000. Federal law

prohibits Washington, DC from taxing the earnings of non-residents working within the city, a

restriction not imposed on any other city in the nation. Partly because of this, the District of

Columbia taxes residents at a higher rate than it might otherwise since about 59 percent of the

income earned in the District of Columbia is earned by non-residents.

29

Real Property Tax

As previously noted, and based on the assumptions in this report, the property tax

burdens in the District of Columbia are below the 50-city average at the $50,000-, $75,000-,

$100,000- and $150,000-income levels. The property tax burden, as calculated in this study, is

higher at the $25,000-income level in Washington, DC, than the average for the 50 cities, which

reflects the high cost of rental housing in the District. A $1,200 refundable property tax credit

administered through the income tax was applied to the renter’s property tax burden this year and

places DC just above the 50-city average at this income level. Although the District’s house

values are higher than the 50-city average at each income level, these rankings for assumed

homeowners highlight the District’s relatively low property tax burdens for homeowners, as

compared to the other 50 cities.

The tax on residential property in the District of Columbia is based on the assessed value

of the property, which is assessed at a statutory level of 100 percent of its estimated market

value.

30

The tax rate on residential owner-occupied property in the District is $0.85 per $100 of

assessed value for 2020. DC homeowners may deduct a homestead exemption of $75,700 from

the assessed base before calculation of the property tax for all owner-occupied dwellings. The

District also has capped the growth of property assessments at 10 percent for all homesteads,

when calculating the tax due. The calculations in this study do not adjust for capped growth.

29

“District of Columbia Economic and Revenue Trends: November 2021.” Data point for FY20. Government of the District of Columbia, Office

of the Chief Financial Officer, Office of Revenue Analysis. Washington, DC: 2021. p. 6.

30

As detailed on page 9, median sales ratios were included where available to represent the actual level of assessment compared to market

values. DC’s most recent median assessment sales ratio is 97.5%.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

48

Sales and Use Tax

As shown in Table 11, the sales tax burden in the District of Columbia is lower than the

50-city average at all five income levels (averages are based on cities levying tax). In 2020, the

District levied a sales tax with six different rates. This rate structure is used, in part, to take

advantage of the District’s special status as a tourist center and to increase the contribution of

non-residents working in the city. These differential rates illustrate the concept of tax exporting.

The following table details the sales tax rates in effect at the end of 2020. Items exempt from the

District of Columbia sales tax include groceries and prescription drugs.

ITEMS

2020 SALES

TAX RATE

Retail rate for sales of certain tangible personal property and selected services, food or

drinks sold in vending machines, tickets to legitimate theaters and entertainment venues,

and medical marijuana

6.0%

Soft drinks. A "soft drink" is defined as a beverage with a natural or artificial sweetener that

contains less than 100% juice; or a beverage that is less than 50% milk, soy, or other milk

substitutes; or coffee, coffee substitutes, cocoa, or tea.

8.0%

Restaurant meals, drinks prepared for immediate consumption on the premises where sold, off-

premises alcohol sold by certain alcoholic beverage licensees, and prepaid telephone cards

10.0%

Rental vehicles, tickets sold for games and events at the ballpark, merchandise sold at the

baseball stadium, tickets sold for games and events at the Capital One Center and merchandise

sold at the Capital One Center, and alcoholic beverages for off-premises consumption unless

the seller has a specified liquor license

10.25%

Hotels (transient accommodations)

14.95%

Parking of motor vehicles in commercial lots

18.0%

Source: “DC Tax Facts 2021.” Government of DC, Office of the Chief Financial Officer, Office of Revenue Analysis, p. 36.

Automobile Taxes

Washington, DC, automobile tax burdens are below the 50-city average for all income

levels, as shown in Table 11, indicating the District’s competitive auto tax rates. Washington,

DC taxes gasoline at 23.5 cents per gallon (with a new surcharge of 0.053/gallon effective on

October 1, 2020 and included in the calculations here). DC requires registration fees for

automobile owners but does not impose an annual excise tax or personal property tax on

automobiles. Registration fees are $72 on cars weighing less than 3,500 pounds; $115 on cars

equal to or greater than 3,500 pounds and less than 5,000 pounds; and $155 on automobiles

weighing more than 5,000 pounds.

Summary

As noted above, tax burdens in DC are influenced by many factors. The District of

Columbia is restricted by the federal government from taxing non-resident income; further a

large percentage of DC land is tax-exempt (fifty-five percent of District acreage is tax exempt

31

).

These factors limit the District’s revenue raising capacity and some of the available tax bases

from which the city must fund a range of government operations that are typically funded by

both states and cities. There are positive factors that increase District tax bases, however,

including substantial tourist activity as well as the large volume of business and lobbying activity

generated by the federal presence.

31

“DC Tax Facts 2020.” Government of the District of Columbia, Office of the Chief Financial Officer, Office of Revenue Analysis, p. 49.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

49

Table 11: Tax Burdens in Washington, DC for a Hypothetical Family

Compared with the Average for the Largest City in Each State

by Income Level, 2020

TAX

DISTRICT

OF

COLUMBIA

AVERAGE

FOR 50 CITIES

LEVYING TAX 1/

DIFFERENCE

(DC Minus 50-City

Average)

$25,000 INCOME LEVEL

Income

($1,133)

(41)

($1,092)

Property

$1,667

1,601

$66

Sales

$811

924

($113)

Auto

$203

284

($81)

TOTAL

$1,548

2,757

($1,209)

$50,000 INCOME LEVEL

Income

$1,099

1,427

($328)

Property

$710

1,857

($1,147)

Sales

$1,057

1,156

($99)

Auto

$199

295

($96)

TOTAL

$3,065

4,454

($1,389)

$75,000 INCOME LEVEL

Income

$2,598

2,768

($170)

Property

$1,380

2,898

($1,518)

Sales

$1,195

1,301

($106)

Auto

$421

655

($234)

TOTAL

$5,594

7,098

($1,504)

$100,000 INCOME LEVEL

Income

$4,122

4,130

($8)

Property

$2,050

3,934

($1,884)

Sales

$1,505

1,621

($116)

Auto

$482

682

($200)

TOTAL

$8,159

9,592

($1,433)

$150,000 INCOME LEVEL

Income

$7,533

6,839

$694

Property

$3,390

6,049

($2,659)

Sales

$1,570

1,674

($104)

Auto

$480

883

($403)

TOTAL

$12,973

14,179

($1,206)

1/ Income and sales averages are based on cities levying tax. As a result, the overall average is not equal to the sum of the averages for each

separate tax type. Averages for Income and Sales taxes do not include cities/states with no income or sales tax.

Note: While using the median of the 50 cities results in slightly different dollar amounts, the results are the similar in that DC’s overall burden is

lower than the 50-city median at every income level.

Part I: Tax Burdens in Washington, DC Compared with Those in the Largest City in Each State

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

50

Chart 7: Combined 2020 Tax Burdens at Each Income Level:

Comparison of DC and the Average of the 50 Cities

Source: ORA Analysis. Averages for Income and Sales taxes do not include cities/states with no income or sales tax.

Note: While using the median of the 50 cities results in slightly different dollar amounts, the results are the same in that DC’s overall burden is lower

than the 50-city median at all five income levels. See Footnote 1 in Table 11 above for more detail.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

51

Part II

A Comparison of Selected

Tax Rates in the

District of Columbia

with Those in the 50 States

as of January 1, 2021

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

52

Tax Rate Comparisons at a Glance

Below is a review of how DC’s tax rates compare to the other jurisdictions in the report

that levy each tax. Of the 12 taxes compared, tax categories for which District rates are higher

than in most of the states include: cigarette; corporate income; individual income; deed

recordation; and motor vehicle registration fees. In five tax categories—insurance premiums,

beer, light wine, distilled spirits, and gasoline—the District has lower tax rates than most states.

For cigarettes, all 50 states have lower excise taxes than the District and ten states now have the

same sales tax rate as DC, while 16 are higher and 19 are lower.

Table 12: Comparison of Selected State Tax Rates

TAX

LEVYING TAX

(excluding DC)

NUMBER OF JURISDICTIONS

LOWER

THAN DC

SAME

AS DC

HIGHER

THAN DC

Individual Income

41

1/

36

2/

0

5

2/

Corporate Income

44

33

1

10

Insurance

50

13

0

37

Sales and Use

45

19

10

16

Beer

50

7

1

42

Light Wine

47

4

39

Distilled Spirits

33

0

1

32

Cigarette

50

0

Gasoline

50

21

0

29

Motor Vehicle Excise

(for cars >3,500 and <5,000 lbs.)

46

22

9

3/

15

Motor Vehicle Registration (Fee)

50

45

0

5

Deed Recordation

35

34

0

1

1/ Does not include two states that tax dividends and/or interest only.

2/ Comparisons are based on highest comparable rate in each jurisdiction. Those based on federal liability are not included.

3/ DC’s rate structure changed for FY21 and is now based on vehicle weight and MPG, however, for the purposes of this table and in sales tax

calculations in the report an average rate of 6% was used.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

53

Table 13: Individual Income Tax Washington Metropolitan Area

PERSONAL EXEMPTIONS

EXEMPTIONS

TAXABLE

INCOME 5/

RATES

DISTRICT OF COLUMBIA

Single

$0 1/

$0 - $10,000

$10,001-$40,000

$40,001-$60,000

$60,001-$350,000

$350,000-$1,000,000

Over $1,000,000

4.0%

$400 + 6.0% of excess > $10,000

$2,200 + 6.5% of excess > $40,000

$3,500 + 8.5% of excess > $60,000

$28,150 + 8.75% of excess > $350,000

$85,025, plus 8.95% of the excess above

$1,000,000

Married Filing Separately

$0

Married Filing Jointly

$0

Head of Household

$0

Dependent (additional)

$0

Blind (additional)

$0

Age 65 and over (additional)

$0

Standard Deduction

$25,100 1/

MARYLAND 2/

Single

$3,200

$0 - $1,000

$1,001-$2,000

$2,001-$3,000

$3,001-$150,000

$150,001-$175,000

$175,001-$225,000

$225,001-300,000

Over $300,000

2.0%

$20 + 3.00% of excess > $1,000

$50 + 4.00% of excess > $2,000

$90 + 4.75% of excess > $3,000

$7,072.50 + 5% of excess > $150,000

$8,322.50 + 5.25% of excess > $175,000

$10,947.50 + 5.5% of excess > $225,000

$15,072.50 + 5.75% of excess> $300,000

Married Filing Separately

$6,400

Married Filing Jointly

$6,400

Head of Household

$3,200

Dependent (additional)

$3,200

Blind (additional)

$1,000

Age 65 and over (additional)

$1,000

Standard Deduction

3/

VIRGINIA

Single

$ 930

$0 - $3,000

$3,001-$5,000

$5,001-$17,000

Over $17,000

2.0%

$60 + 3.00% of excess >$3,000

$120 + 5.00% of excess > $5,000

$720 + 5.75% of excess > $17,000

Married Filing Separately

$ 930

Married Filing Jointly

$1,860

Head of Household

$ 930

Dependent (additional)

$ 930

Blind (additional)

$ 800

Age 65 and over (additional)

$ 800

Standard Deduction

4/

Source: DC Tax Facts, 2021, and state web sites.

1/ As a result of the 2017 Tax Cuts and Jobs Act and DC’s federal conformity provisions, DC personal exemptions are reduced to zero and

the federal standard deduction will apply thereafter. The standard deduction presented is for married taxpayers filing jointly.

2/ Maryland rates do not include local rates that may be as low as 2.25% in Worcester County and as much as 3.20% in Howard, Montgomery,

and Prince George’s Counties, among others. Baltimore City, which is used in this study, has a local rate of 3.20%.

3/ The standard deduction for an individual is 15% of Maryland AGI not to exceed $2,300 ($4,600 for joint and head of household returns and

those filing as qualifying widow(er) with dependent child). The minimum is $1,550 for single, married filing separately and dependent

taxpayers. All others are allowed a minimum of $3,100.

4/ Single - $4,500; married persons filing jointly or combined separate - $9,000.

5/ Brackets and rates are for married filing jointly.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

54

Table 14: Individual Income Tax

43 States and the District of Columbia

PERSONAL EXEMPTIONS (CREDITS)

RATES AND TAXABLE

INCOME BRACKETS

SINGLE

MARRIED

FILING

JOINT

DEPENDENTS

TYPE

OF

RETURN

MINIMUM

MAXIMUM

RATE

UP TO

RATE

OVER

ALABAMA 1/

$1,500

$3,000

$500 1/

S, HH, M/S

M/J

2.0%

$ 500

1,000

5.0%

$ 3,000

6,000

ARIZONA

$0 3/

$100 3/

S, M/S

M/J, HH

2.59%

$27,272

54,544

4.50%

$163,633

327,264

ARKANSAS 5/

($26)

($52)

($26)

S, HH, M,

M/J

2.0%

$ 4,000

5.9%

$ 79,300

CALIFORNIA 2/

($124)

($248)

($383)

S, M/S

HH

M/J

1.0%

$ 8,932

18,663

17,864

12.3%

$599,012

850,503

1,000,000

COLORADO 1/

$0 3/

4.55% of federal taxable income with certain modifications.

CONNECTICUT

$15,000

$24,000

$0 4/

S,M/S

HH

M/J

3.0%

$ 10,000

16,000

20,000

6.99%

$ 500,000

800,000

1,000,000

DELAWARE 1/

($110)

($220)

($110)

S, M/S, M/J

0.0%

$ 2,000

6.60%

$ 60,000

DISTRICT OF COLUMBIA

$0 3/

S,M/S,

M/J, HH

4.00%

$ 10,000

8.95%

$1,000,000

GEORGIA

$2,700

$7,400

$3,000

M/S

S

HH, M/J

1.0%

$ 500

750

1,000

5.75%

$ 5,000

7,000

10,000

HAWAII

$1,144

$2,288

$1,144

M/S,S

HH

M/J, SS

1.40%

$ 2,400

3,600

4,800

11.0%

$200,000

300,000

400,000

1/ Does not include various local income taxes. Alabama’s personal exemption is $2,500 for single taxpayers with an AGI less than $20,500, and

$300 for those with an AGI greater than $100,000. Alabama’s personal exemption for a dependent is $1,000 for taxpayers with incomes up to

$20,000, $500 for incomes between $20,001 to $100,000, and for taxpayers with incomes over $100,001 the dependent exemption is $300.

2/ California imposes a Mental Health Services Tax at a rate of 1 percent on income over $1,000,000.

3/ These states conform personal exemptions to the federal Internal Revenue Code, and the passage of the Tax Cut and Jobs Act of 2017

decreased the federal personal exemptions to $0.

4/ Connecticut’s personal exemption incorporates a standard deduction and decreases as AGI increases.

5/ Arkansas’ rates are dependent on income levels beginning Jan. 1, 2020. The brackets shown include the lowest and highest but would not

apply to the same taxpayer.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

55

Table 14 (Continued)

Individual Income Tax

43 States and the District of Columbia

PERSONAL EXEMPTIONS (CREDITS)

RATES AND TAXABLE

INCOME BRACKETS

SINGLE

MARRIED

FILING

JOINT

DEPENDENTS

TYPE

OF

RETURN

MINIMUM

MAXIMUM

RATE

UP TO

RATE

OVER

IDAHO

$0 3/

S,M/S

HH,M/J

1.125%

$ 1,568

3,136

6.925%

$ 11,760

23,520

ILLINOIS

$2,325

$4,650

$2,325

4.95% of taxable net income. 1/

INDIANA 2/ 5/

$1,000

$2,000

$1,000

3.23% of federal adjusted gross income.

IOWA

($40)

($80)

($40)

S, M/J

0.33%

$1,676

8.53%

$ 75,420

KANSAS 4/

$2,250

$4,500

$2,250

S, M/S

M/J

3.1%

$ 15,000

30,000

5.7%

$ 30,000

60,000

KENTUCKY 1/

$0

5.0% of federal adjusted gross income.

LOUISIANA

$4,500

$9,000

$1,000

S, M/S, HH

M/J

2.0%

$ 12,500

25,000

6.0%

$ 50,000

$100,000

MAINE

$4,300

$8,600

$4,300

S, M/S

HH

M/J

5.80%

$ 22,450

33,650

44,950

7.15%

$ 53,150

79,750

106,350

MARYLAND 2/

$3,200

$6,400

$3,200

S,M/S

M/J, HH

2.0%

$ 1,000

1,000

5.75%

$250,000

300,000

MASSACHUSETTS

$4,400

$8,800

$1,000

5.0% of taxable income.

MICHIGAN 2/

$4,750

$9,500

$4,750

4.25% of taxable income.

1/ Does not include filing fee of $10.

2/ Does not include various local income taxes.

3/ These states conform personal exemptions to the federal Internal Revenue Code, and the passage of the Tax Cut and Jobs Act of 2017

decreased the federal personal exemptions to $0.

4/ Individuals with a taxable income of $2,500 or less, and married individuals filing joint returns with a taxable income of less than $5,000 will

have a tax liability of zero.

5/ Indiana allows an additional $1,500 exemption for dependent children meeting certain conditions.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

56

Table 14 (Continued)

Individual Income Tax

43 States and the District of Columbia

PERSONAL EXEMPTIONS (CREDITS)

RATES AND TAXABLE

INCOME BRACKETS

SINGLE

MARRIED

FILING

JOINT

DEPENDENTS

TYPE

OF

RETURN

MINIMUM

MAXIMUM

RATE

UP TO

RATE

OVER

MINNESOTA

$0 3/

S

M/S

HH

M/J

5.35%

$ 27,230

19,905

33,520

39,810

9.85%

$ 166,041

138,100

220,730

276,200

MISSISSIPPI

$6,000

$12,000

$1,500

S, M/J, HH

3.0% 1/

$5,000

5.0%

$ 10,000

MISSOURI 2/

$0 3/

S, M/J, HH,

M/S

1.5%

$ 1,088

5.4%

$ 8,704

MONTANA

$2,580

$5,160

$2,580

S, M/J, HH

1.0%

$3,100

6.9%

$ 18,800

NEBRASKA

($142)

($284)

($142)

M/S, S

HH

M/J

2.46%

$3,340

6,220

6,660

6.84%

$ 32,210

47,760

64,430

NEW HAMPSHIRE

$2,400

$4,800 4/

---

5.0% on dividend and interest income over personal exemption.

NEW JERSEY

$1,000

$2,000

$1,500

S, M/S,

HH, M/J

1.4%

$ 20,000

10.75%

$ 5,000,000

NEW MEXICO

$0 3/

M/S

S,

HH, M/J

1.7%

$4,000

5,500

8,000

5.9%

$ 157,000

210,000

315,000

NEW YORK 2/ 5/

---

$1,000

M/S, S

HH 4/

M/J

4.0%

$ 8,500

12,800

17,150

8.82%

$1,077,550

1,616,400

2,155,350

NORTH CAROLINA

---

5.25%

NORTH DAKOTA

$0 3/

S

HH

M/J

1.10%

$ 40,525

54,400

67,700

2.90%

$ 445,000

445,000

1/ First $1,000 exempted in 2018, with $1,000 being added each year so that by 2022 first $5,000 of income is not taxed.

2/ Does not include various local income taxes.

3/ These states conform personal exemptions to the federal Internal Revenue Code, and the passage of the Tax Cut and Jobs Act of 2017 reduced

federal personal exemptions to $0.

4/ In addition, a $1,200 exemption is available for residents who are 65 years of age or older; a $1,200 exemption is available for residents who

are blind regardless of their age; and a $1,200 exemption is available to disabled individuals who are unable to work.

5/ For years 2021 through 2027 a recent law raised the highest marginal rate on income between $2,155,350 to $5 million to 9.65%, 10.3% on

income between $5 and 25 million, and 10.9% on income over $25 million.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

57

Table 14 (Continued)

Individual Income Tax

43 States and the District of Columbia

PERSONAL EXEMPTIONS (CREDITS)

RATES AND TAXABLE

INCOME BRACKETS

SINGLE

MARRIED

FILING

JOINT

DEPENDENTS

TYPE

OF

RETURN

MINIMUM

MAXIMUM

RATE

UP TO

RATE

OVER

OHIO 1/

$2,400

$4,800

$2,400

S, M/J, M/S

0.0%

$ 22,150

4.797%

$221,300

OKLAHOMA

$1,000

$2,000

$1,000

S,M/S

HH,M/J

0.5%

$1,000

2,000

5.00%

$7,200

12,200

OREGON 1/

($210)

($420)

($210)

S,M/S

M/J, HH

4.75%

$3,650

7,300

9.9%

$125,000

250,000

PENNSYLVANIA 1/

---

3.07% of specified classes of taxable income is effective rate.

RHODE ISLAND

$4,250

$8,500

$4,250

S, HH, M/S,

M/J

3.75%

$ 66,200

5.99%

$ 150,500

SOUTH CAROLINA

$0 3/

S, M/S, M/J

0.0%

$ 3,110

7.0%

$ 15,560

TENNESSEE

$1,250

$2,500

---

1.0% on interest and dividend income.

UTAH /2

4.95% flat rate.

VERMONT

$4,250

$8,500

$4,250

S

M/S

HH

M/J

3.35%

$40,350

32,300

51,580

67,450

8.75%

$ 204,000

118,975

216,700

248,350

VIRGINIA

$930

$1,860

$930

S, M/J

2.0%

$ 3,000

5.75%

$ 17,000

WEST VIRGINIA 1/

$2,000

$4,000

$2,000

S, M/J

3.0%

$ 10,000

6.5%

$ 60,000

WISCONSIN

$700

$1,400

$700

S, HH

M/J

M/S

3.54%

$12,120

16,160

8,080

7.65%

$ 266,930

355,910

177,960

Source: Survey of State Revenue Department Officials; State Department of Revenue web sites; and Federation of Tax Administrators, "State

Individual Income Tax Rates as of July 1, 2021.”

1/ Does not include various local income taxes.

2/ Utah provides a tax credit equal to 6% of the federal personal exemption amounts (and applicable standard deduction).

3/ These states conform personal exemptions to the federal Internal Revenue Code, and the passage of the Tax Cut and Jobs Act of 2017 reduced

federal personal exemptions to $0.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

58

Table 15: Characteristics of State Individual Income Taxes

JURISDICTION

FEDERAL

INCOME TAX

DEDUCTIBLE

NO INCOME

TAX

FEDERAL

DEFINITION OF

INCOME FOR STATE

TAX BASE

STATE

DEFINITION OF

INCOME FOR

STATE TAX BASE

ALABAMA

AL

ALASKA

AK

ARIZONA

AZ

ARKANSAS

AR

CALIFORNIA

CA

COLORADO

CO*

CONNECTICUT

CT

DELAWARE

DE

DISTRICT OF

COLUMBIA

DC

FLORIDA

FL

GEORGIA

GA

HAWAII

HI

IDAHO

ID*

ILLINOIS

IL

INDIANA

IN

IOWA

IA

KANSAS

KS

KENTUCKY

KY

LOUISIANA

LA

MAINE

ME

MARYLAND

MD

MASSACHUSETTS

MA

MICHIGAN

MI

MINNESOTA

MN

MISSISSIPPI

MS

MISSOURI 1/

MO

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

59

Table 15 (Continued)

Characteristics of State Individual Income Taxes

JURISDICTION

FEDERAL

INCOME TAX

DEDUCTIBLE

NO INCOME

TAX

FEDERAL

DEFINITION OF

INCOME FOR STATE

TAX BASE

STATE

DEFINITION OF

INCOME FOR

STATE TAX BASE

MONTANA 1/

MT

NEBRASKA

NE

NEVADA

NV

NEW HAMPSHIRE

NH 2/

NEW JERSEY

NJ

NEW MEXICO

NM

NEW YORK

NY

NORTH CAROLINA

NC

NORTH DAKOTA

ND*

OHIO

OH

OKLAHOMA

OK

OREGON 3/

OR

OR*

PENNSYLVANIA

PA

RHODE ISLAND

RI

SOUTH CAROLINA

SC*

SOUTH DAKOTA

SD

TENNESSEE

TN 2/

TEXAS

TX

UTAH

UT

VERMONT

VT

VIRGINIA

VA

WASHINGTON

WA

WEST VIRGINIA

WV

WISCONSIN

WI

WYOMING

WY

Source: Federation of Tax Administrators, “State Personal Income Taxes: Federal Starting Points;” January 1, 2021 and “State

Individual Income Taxes;” January 1, 2021; and Survey of State Revenue Department Officials

* ‘Federal taxable income’ is the definition of income for state base (rather than Federal Adjusted Gross Income).

1/ Federal taxes used as a deduction are limited to $5,000 for individuals and $10,000 for joint returns in MO and MT.

2/ Tax only on interest and dividends.

3/ Federal deductibility is limited to $7,050 for all filers.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

60

Table 16: State Corporate Income Tax Rates

(Maximum Rates)

DISTRICT OF COLUMBIA: 8.25%

LOWER THAN THE DISTRICT

33 STATES

North Carolina

Missouri

North Dakota 1/

Florida

Colorado

Arizona

Utah

Kentucky

Mississippi

South Carolina

Indiana 11/

Georgia

New Mexico

Michigan

Oklahoma

Virginia

Arkansas

Hawaii

2.50%

4.00%

4.31%

4.46%

4.55%

4.90%

4.95%

5.00%

5.25%

5.75%

5.90%

6.00%

6.20%

6.40%

Alabama

New York

Tennessee

West Virginia

Montana 2/

Idaho

Kansas 3/

Rhode Island 4/

Connecticut

Oregon

New Hampshire 5/

Nebraska

Wisconsin

Louisiana

Massachusetts

6.50%

6.75%

6.93%

7.00%

7.50%

7.60%

7.70%

7.81%

7.90%

8.00%

SAME AS THE DISTRICT

1 STATE

Maryland 8.25%

HIGHER THAN THE DISTRICT

10 STATES

Vermont

Delaware

California

Maine

New Jersey

8.50%

8.70%

8.84%

8.93%

9.00%

Alaska

Illinois 6/

Minnesota

Pennsylvania

Iowa 7/

9.40%

9.50%

9.80%

9.99%

9.80%

NO TAX

6 STATES

Ohio 8/

Nevada

South Dakota 9/

Texas 10/

Washington

Wyoming

Source: Survey of State Revenue Department Officials; State web pages; and Federation of Tax Administrators, “Range

of State Corporate Income Tax Rates, January 1, 2021.”

1/ North Dakota imposes a 3.5% surtax for filers electing to use the water’s edge method to apportion income

2/ Montana’s rate is 7% for corporations making a “water’s edge” election.

3/ Kansas’ rate includes a 3.0% surtax on taxable income more than $50,000.

4/ In RI, a rate of 9.0% applies to financial institutions, not applicable to public service corporations or insurance companies.

5/ Rate is applied to income over $50,000. Does not include a Business Enterprise Tax of 0.60%.

6/ Illinois’ rate includes 2.5% Personal Property Replacement Tax.

7/ 50% federal deductibility.

8/ Ohio's Commercial Activity Tax (CAT) is imposed on the privilege of doing business in Ohio, measured by gross receipts.

9/ There is a Bank Franchise Tax for Commercial Lenders in South Dakota.

10/ There is a Franchise Tax on Entities with total revenues over $1.13 million.

11/ Indiana’s corporate tax rate decreased to 4.9% on July 1, 2021.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

61

Table 17: State Gross Premiums Tax Rates on Foreign (Out-of-State) Life

Insurers

(Maximum Rates)

DISTRICT OF COLUMBIA: 1.7%

LOWER THAN THE DISTRICT

13 STATES

Illinois

New York 1/

South Carolina

Wyoming

Iowa

Nebraska

Michigan

0.50%

0.70%

0.75%

1.00%

1.25%

New Hampshire

Indiana

Ohio

Idaho

Kentucky

Connecticut

1.25%

1.30%

1.40%

1.50%

HIGHER THAN THE DISTRICT

37 STATES

Florida

Tennessee

Texas

Arizona

North Carolina

Colorado

Delaware

Kansas

Maine

Maryland

Massachusetts

Minnesota

Missouri

New Jersey

North Dakota

Oregon

Pennsylvania

Rhode Island

Vermont

Washington

1.75%

1.90%

2.00%

Wisconsin

Georgia

Louisiana

Oklahoma

Utah

Virginia

Alabama

California

Arkansas

South Dakota

Alaska

Hawaii

Montana

Mississippi

New Mexico

West Virginia

Nevada

2.00%

2.25%

2.30%

2.35%

2.50%

2.70%

2.75%

3.00%

3.50%

Source: Survey of State Revenue Department Officials; state statutes; and Gentry, John D., “Taxation of Insurance

Companies.” Informational Paper 10. Wisconsin Legislative Fiscal Bureau. January 2019.

1/ Life insurers pay a franchise tax which is equal to the sum of the premiums tax and a tax based on the highest of four

bases, plus a tax on subsidiary capital. The sum of the two components cannot be less than 1.5% or greater than 2% of

premiums.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

62

Table 18: State General Sales and Use Tax Rates

(Maximum Local Rates in Parentheses)

DISTRICT OF COLUMBIA: 6.0%

LOWER THAN THE DISTRICT

19 STATES

Colorado (8.3%)

Alabama (7.5%)

Georgia (4.9%)

Hawaii (0.50%)

New York (4.875%)

Wyoming (2.0%)

Missouri (5.763%)

Louisiana (7.0%)

Oklahoma (7.0%)

South Dakota (4.5%)

2.900%

4.000%

4.225%

4.450%

4.500%

North Carolina (2.75%)

North Dakota (3.5%)

Wisconsin (1.75%)

New Mexico (4.313%)

Virginia (0.70%) 1/

Maine

Nebraska (2.5%)

Arizona (5.6%)

Ohio (2.25)

4.750%

5.000%

5.125%

5.300%

5.500%

5.600%

5.750%

SAME AS THE DISTRICT

10 STATES

Florida (2.5%)

Idaho (3.0%)

Iowa (1.0%)

Kentucky

Maryland

6.000%

Michigan

Pennsylvania (2.0%)

South Carolina (3.0%)

Vermont (1.0%)

West Virginia (1.0%)

6.000%

HIGHER THAN THE DISTRICT

16 STATES

Utah (2.95%) 1/

Illinois (10.00%)

Massachusetts

Texas (2.0%)

Connecticut

Arkansas (5.125%)

Kansas (4.0%)

Washington (4.0%)

New Jersey (3.313%)

Nevada (1.65%)

6.100%

6.250%

6.350%

6.500%

6.625%

6.850%

Minnesota (2.0%)

Indiana

Mississippi (1.0%)

Rhode Island

Tennessee (2.75%)

California (2.50%) 1/

6.875%

7.000%

7.250%

NO TAX

5 STATES

Alaska (7.5%)

Delaware

Montana 2/

New Hampshire

Oregon

Source: Survey of State Revenue Department Officials; State Revenue Department Web Sites; all maximum local rates from

Tax Foundation, “State and Local Sales Tax Rates as of January 1, 2021."

1/ State rates in CA, UT, and VA include a mandatory local add-on sales tax of 1.25%, 1.25%, and 1%, respectively.

2/ Does not include sales taxes in some local resort areas.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

63

Table 19: State Beer Tax Rates

(Per Gallon, Alcoholic Content Of 4.5%)

DISTRICT OF COLUMBIA: $0.09

LOWER THAN THE DISTRICT

7 STATES

Wyoming

Missouri

Wisconsin

Colorado

$ .02

.06

.08

Kentucky

Pennsylvania

Oregon

$ .08

.08

SAME AS THE DISTRICT

1 STATE

Maryland

$ .09

HIGHER THAN THE DISTRICT

42 STATES

Massachusetts

Rhode Island

Indiana

New Jersey

Montana 1/

New York

Minnesota 2/

Arizona

Nevada

North Dakota 3/

Kansas

Ohio

West Virginia

Iowa

Texas

California

Michigan

Illinois

Arkansas

Connecticut

$ .11

.11

.115

.12

.14

.148

.16

.18

.19

.194

.20

.231

.23

.24

Virginia

Washington 4/

Delaware

Vermont

South Dakota

New Hampshire

Nebraska

Georgia

Maine

Louisiana

Oklahoma

New Mexico 5/

Utah 6/

Mississippi

Idaho

Florida

Alabama

North Carolina

South Carolina

Hawaii 7/

Alaska

Tennessee 8/

$ .2565

.26

.265

.27

.30

.31

.32

.35

.40

.41

.4226

.4268

.45

.48

.53

.6171

.77

.93

1.07

1.29

Source: Survey of State Revenue Department Officials; and Federation of Tax Administrators, "State Tax Rates on

Beer. (January 1, 2021)."

1/ Montana taxes beer at different rates per size of brewer (< 5k barrels produced - $.04 per gallon; 5k to 10k - $.07 per

gallon; 10k to 20k - $.11 per gallon; and > 20k - $.14 per gallon).

2/ Credit allowed to small brewers.

3/ $0.08 per gallon for bulk beer.

4/ Credit allowed to small brewers.

5/ Rate is $0.08 per gallon for microbrewer.

6/ In Utah, “beer” is not more than 4% of alcohol by volume. This is the rate shown. For "heavy beer" which is >4% in Utah,

there is a higher tax rate above the landed case cost and is sold at State Liquor Stores.

7/ Rate is $0.54 per gallon for draft beer.

8/ In addition, Tennessee has a barrellage tax of .138/gal.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

64

Table 20: State Light Wine Tax Rates

(Per Gallon, Alcoholic Content of 12%)

DISTRICT OF COLUMBIA: $0.30

MONOPOLY STATES

3 STATES

Pennsylvania 1/

Utah 2/

Wyoming

LOWER THAN THE DISTRICT

4 STATES

California

Texas

$ .20

.204

Wisconsin

Colorado

$ .25

.28

SAME AS THE DISTRICT

4 STATES

Kansas

Minnesota

$ .30

.30

New Hampshire

New York

$ .30

.30

HIGHER THAN THE DISTRICT

39 STATES

Ohio

Mississippi

Maryland

Missouri

Idaho

Indiana

Kentucky

North Dakota

Michigan

Massachusetts

Vermont

Maine

Oregon

Nevada

Oklahoma

Arkansas

Louisiana

Connecticut

Arizona

Washington

$ .30

.35

.40

.42

.45

.47

.50

.51

.55

.60

.67

.70

.72

.75

.76

.79

.84

.87

New Jersey

South Carolina

South Dakota

Nebraska

North Carolina

West Virginia

Montana 2/

Tennessee

Hawaii

Illinois

Rhode Island

Georgia

Virginia

Delaware

Alabama

New Mexico

Iowa

Florida

Alaska

$ .875

.90

.93

.95

1.00

1.02

1.21

1.38

1.39

1.40

1.51

1.63

1.70

1.75

2.25

2.50

Source: Survey of State Revenue Department Officials; Federation of Tax Administrators, "State Tax Rates on Wine,

(January 1, 2021)."

1/ 18% wine & liquor tax on top of a 30% markup.

2/ $1.06 per gallon if sold to an agency owned liquor store.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

65

Table 21: State Distilled Spirits Tax Rates

(Per Gallon)

DISTRICT OF COLUMBIA: $1.50

CONTROL BOARD STATES

17 STATES

Alabama

Idaho

Iowa 1/

Maine

Michigan

Mississippi

Montana 2/

New Hampshire

North Carolina 3/

Ohio

Oregon

Pennsylvania 4/

Utah 5/

Vermont

Virginia 6/

West Virginia

Wyoming

SAME AS THE DISTRICT

1 STATE

Maryland

$ 1.50

HIGHER THAN THE DISTRICT

32 STATES

Georgia

Kentucky

Missouri

Colorado

Texas

Arkansas 7/

Kansas

North Dakota

Indiana

South Carolina 8/

Arizona

Louisiana

Wisconsin

California

Nevada

$1.89

1.92

2.00

2.28

2.40

2.50

2.68

2.72

3.00

3.03

3.25

3.30

3.60

Nebraska

South Dakota

Massachusetts

Tennessee

Delaware 9/

Minnesota

Rhode Island

New Jersey

Oklahoma

Connecticut

Hawaii

New Mexico

New York

Florida

Illinois

Alaska

Washington

$3.75

3.93

4.05

4.40

4.50

5.03

5.40

5.50

5.56

5.94

5.98

6.06

6.44

6.50

8.55

12.80

14.27

Source: Survey of State Revenue Department Officials; Federation of Tax Administrators, "State Tax Rates on Distilled

Spirits, (January 1, 2021)."

1/ 50% markup.

2/ Excise Tax (16%) and License Tax (10%) on top of a 40% markup. Excise tax varies by size of producer.

3/ 30% Excise Tax. State sales tax additional.

4/ 18% on the actual price paid by the consumer including mark-up, handling charge, and federal tax.

5/ Spirituous liquor is subject to a markup of 86% above the landed case cost.

6/ Virginia levies a tax of 20% of the price charged on alcoholic beverages.

7/ Containing more than 21% of alcohol by weight.

8/ Additionally, there is a $1.79 case tax per gallon, and a $0.41 surtax, totaling $4.92 per gallon.

9/ Distilled spirits with 25% or less ethyl alcohol at $3.00 per gallon.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

66

Table 22: State Cigarette Tax Rates

(Per Pack of 20)

DISTRICT OF COLUMBIA: $5.00 1/

LOWER THAN THE DISTRICT

50 STATES

Missouri*

Georgia

North Dakota

North Carolina

Idaho

South Carolina

Virginia*

Wyoming

Tennessee*

Nebraska

Alabama*

Mississippi

Indiana

Louisiana

Kentucky

Arkansas

West Virginia

Kansas

Florida

Iowa

Texas

South Dakota

Ohio

Montana

Utah

$.17

.37

.44

.45

.57

.60

.62

.64

.675

.68

.995

1.08

1.10

1.15

1.20

1.29

1.339

1.36

1.41

1.53

1.60

1.70

New Hampshire

Nevada

Colorado

Alaska

Arizona

Maine

Maryland

Michigan

New Mexico

Oklahoma

Delaware

Wisconsin

Pennsylvania*

New Jersey

California

Illinois*

Washington

Vermont

Hawaii

Oregon

Massachusetts

Minnesota 3/

Rhode Island

Connecticut

New York*

1.78

1.80

1.94

2.00

2.03

2.10

2.52

2.60

2.70

2.87

2.98

3.025

3.08

3.20

3.33

3.51

3.673

4.25

4.35

Source: Survey of State Revenue Department Officials; Federation of Tax Administrators, "State Excise Tax Rates on

Cigarettes, (January 1, 2021)."

*Counties and cities may impose an additional tax on a pack of cigarettes.

1/ Includes an in-lieu cigarette sales tax at $0.50 for 2021.

2/ Additional $2.00 tax in Philadelphia and $1.50 in New York City.

3/ Includes a cigarette sales tax of $0.633 per pack.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

67

Table 23: State Gasoline Tax Rates

(Per Gallon)

DISTRICT OF COLUMBIA: $0.288 1/

LOWER THAN THE DISTRICT

21 STATES

Alaska

Missouri

Mississippi

New Mexico

Arizona

Oklahoma

Texas

Louisiana

Virginia*

Colorado

$ .090

.174

.184

.189

.190

.200

.209

.218

.221

Delaware 2/

North Dakota

Nevada

New Hampshire

Wyoming

South Carolina*

Kansas

Kentucky

Massachusetts

Tennessee

Arkansas

.230

.238

.240

.248

.250

.260

.269

.274

.278

HIGHER THAN THE DISTRICT

29 STATES

Alabama*

Georgia

Vermont

Iowa

South Dakota

Hawaii

Minnesota

Maine

Utah

Montana*

Wisconsin

Idaho

Nebraska

Florida 3/

New York

Rhode Island

.290

.298

.300

.306

.314

.316

.328

.329

.330

.341

.344

.345

.351

West Virginia

Oregon

North Carolina

Maryland

Michigan

Ohio

Connecticut

Indiana

New Jersey

Illinois

Washington

California

Pennsylvania

.357

.360

.364

.365

.377

.385

.422

.423

.508

.518

.522

.577

.587

Source: ORA Survey of State Revenue Department officials; State Web Sites; and Federation of Tax Administrators, “State

Motor Fuel Rates, (January 1, 2021).”

Note: Tax rates do not include local taxes (see Table 8). Rates do include inspection or environmental cleanup fees and applicable

state sales taxes (also included in Table 8), and therefore this table differs from the same one presented in some prior editions of this

report (2017 and before).

* Rates increased on July 1, 2021, or October 1, 2021.

1/ As of October 1, 2020, the District of Columbia levied a surcharge of $0.053 on the sale of motor fuel, gasoline, and gasohol. Rate

increased to $0.338 on October 1, 2021

2/ Additional Gross Receipts Tax of 0.9% applies to wholesaler.

3/ Includes a minimum statewide local tax.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

68

Table 24: State Motor Vehicle Sales and Excise Taxes

Paid at Time of Sale or Titling

46 States and DC

DISTRICT OF COLUMBIA: 1/

1 - 8.1% of fair market value, based on MPG - 3,499 pounds or less

2 - 9.1% of fair market value, based on MPG - 3,500 pounds and less than 5,000 pounds

3 - 10.1% of fair market value, based on MPG – 5,000 pounds or more

Alabama

Colorado

North Carolina 2/

Oklahoma

Hawaii

New Mexico

New York 3/

South Dakota

Wyoming 3/

Virginia

Missouri 3/

Delaware 4/

Louisiana 3/

Utah

Iowa 5/

Mississippi 3/

North Dakota

Wisconsin 3/

Maine 3/ 8/

Nebraska

Arizona

Ohio 3/

Florida 3/ 7/

Idaho

Kentucky

2.00%

2.90%

3.00%

3.25%

4.00%

4.15%

4.225%

4.25%

4.45%

4.85%

5.00%

5.50%

5.60%

5.75%

6.00%

Maryland

Michigan 7/

Pennsylvania 7/

South Carolina 6/

Vermont

West Virginia 7/

Illinois 3/

Massachusetts 3/

Texas 3/ 7/

Connecticut 3/

Arkansas 3/, 9/

Kansas

Minnesota

Washington 3/

Georgia 10/

New Jersey 3/

Indiana 3/

Tennessee 3/

Rhode Island 7/

California

Nevada 3/

6.00%

6.25%

6.35%

6.50%

6.60%

6.625%

7.00%

7.25%

8.38%

NO TAX

4 STATES

Alaska

Montana

New Hampshire

Oregon 11/

Source: Survey of State Revenue Department officials and review of State Web Sites.

1/ Tax does not apply to vehicles previously titled in another jurisdiction. Rates are now based on weight and Miles

Per Gallon (MPG), with highest rates on vehicles with 20 MPG or less, and decreasing at 5 MPG intervals from there,

to the lowest rate applying to vehicles getting 40 MPG or more. Exemption for electric vehicles.

2/ Tax on sales price less trade-in allowance. The maximum tax is $250 on non-commercial vehicles.

3/ No excise tax; vehicles charged sales tax at time of purchase.

4/ Called a document fee.

5/ This is a statewide levy, but it is collected by the counties.

6/ Maximum tax is $500.

7/ Tax on sales price less trade-in allowance.

8/ Rate listed is a sales tax; Maine’s excise tax is an annual tax between .4% and 2.4% depending on the age of the vehicle.

9/ Local sales taxes are capped at $25 per 1% of tax on a single transaction, maximum of $62.50. Used cars below $4,000

are exempt.

10/ Title Ad Valorem Tax collected at time of title application.

11/ A 0.5% tax (part vehicle dealer privilege tax and part consumer use tax) applies to vehicles <26,000 lbs. and < 7,500 miles.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

69

Table 25: State Motor Vehicle Annual Registration Fees

Automobile Costing $27,900, Bought New and Weighing 3,522 Pounds

(4-Door, 6-Passenger, 8-Cylinder)

DISTRICT OF COLUMBIA: $115.00 1/

LOWER THAN THE DISTRICT

45 STATES

Arizona 6/

Mississippi

Nebraska

Georgia

Kentucky

Alabama

Arkansas

Missouri 2/

Louisiana 4/

New York 3/

Tennessee

Massachusetts

Wyoming

Virginia

Rhode Island

Nevada

Ohio

Maine

Indiana

Kansas

Pennsylvania

North Carolina

Delaware

South Carolina

$13.50

15.00

20.00

21.00

23.00

25.00

27.25

27.90

28.25

29.00

30.00

30.75

32.50

33.00

34.50

35.00

36.35

37.25

38.00

38.75

40.00

New Hampshire

Hawaii

Florida

Utah 6/

Alaska

Texas

West Virginia

California 12/

New Mexico 9/

Oregon

Washington 5/

Maryland

Idaho

Colorado 8/

South Dakota

Vermont

New Jersey

Wisconsin

North Dakota 7/

Oklahoma

Connecticut 12/

$43.20

45.00

45.60

46.75

50.00

50.75

51.50

60.00

62.00

66.00

68.25

67.50

69.00

72.00

76.00

84.00

85.00

93.00

96.00

100.00

HIGHER THAN THE DISTRICT

5 STATES

Illinois

Michigan 8/

Montana 10/

151.00

166.00

217.00

Iowa 11/

Minnesota

293.00

359.00

Source: Survey of State Revenue Department Officials; Review of State Motor Vehicle Registration Web Sites.

1/ $72 (<3,499 lbs.); $115 (3,500 - 4,999 lbs.); $155 (>5,000 lbs.); and $36 (clean fuel or electric vehicle).

2/ Based on vehicle horsepower. $21 is for a vehicle between 12hp – 23 hp. Does not include $1 insurance database fee.

3/ Biennial fees start at $26 for a vehicle under 1,650 lbs. and increase by $1.50 for every 100 lbs. above 1,650. Presented

annually here.

4/ Based on value of the vehicle. Current rate is 0.1% of vehicle per year.

5/ Includes vehicle weight fee of $25, additional local taxes and fees apply.

6/ AZ includes $1.50 Air Quality Research Fee. UT includes $1 insurance database fee.

7/ Fees range from $49 to $274 based on weight and number of years vehicle has been registered. Rate declines after first 6 years.

8/ Varies based on age, weight, taxable value, purchase date, and plate type.

9/ This fee is for the first registration, 1.25% of base vehicle value, plus $10.

10/ There is an additional $6 fee for Park access and a $5 fee for police salaries.

11/ Based on fee of 1% of value plus a $.40 fee per 100 lbs.

12/ CA includes $3 alternative fuel/technology registration fee. CT includes $10 Clean Air Act fee.

Part II: A Comparison of Selected Tax Rates in the District of Columbia with Those in the 50 States as of Jan. 1, 2021

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

70

Table 26: State Real Estate Deed Recordation and Transfer Tax Rates

(Per $500 of Consideration)

DISTRICT OF COLUMBIA: $11.00 1/

LOWER THAN THE DISTRICT

34 STATES

Colorado 4/

Alabama

Georgia 2/

Hawaii 3/

Illinois

Kentucky

Ohio

South Dakota

California 4/ 11/

Oklahoma

Iowa

North Carolina

West Virginia 4/

Nebraska

Virginia

Wisconsin

Arkansas

Minnesota

$.05

.50

.55

.75

.80

1.00

1.10

1.125

1.25

1.50

1.65

South Carolina 4/

Tennessee

Nevada 4/

New York 10/

Maine

Massachusetts

Rhode Island 6/

Maryland 9/

New Jersey 4/ 5/

Florida

Michigan

New Hampshire

Connecticut 4/

Pennsylvania

Washington 9/

Vermont 8/

$1.30

1.85

1.95

2.00

2.20

2.28

2.30

2.50

2.90

3.50

3.75

5.00

5.50

7.25

HIGHER THAN THE DISTRICT

1 STATE

Delaware $15.00 4/

NO TAX

15 STATES

Alaska

Arizona

Idaho

Indiana

Kansas

Missouri

Louisiana

Mississippi

Missouri

Montana

New Mexico

North Dakota

Oregon

Texas

Utah

Wyoming

Source: Survey of State Revenue Department Officials, State web sites; and National Conference of State Legislatures (NCSL),

“Real Estate Transfer Taxes.”

1/ For DC, $11.00 represents the deed recordation tax + the deed transfer tax per $500 ($5.50/$500 for each) for residential

property. The rate is 1.1% of consideration or fair market value for residential property transfers <$400,000; 1.45% of

consideration of fair market value on the entire amount if transfer is >$400,000. Total transfer + recordation rate is

2.2 and 2.9 percent, respectively.

2/ $1.00 for the first $1,000 or fractional part thereof. Thereafter, $0.10 per each $100.00.

3/ Based on value, from $0.50 to $6.25 per $500 of value, as value rises from less than $600,000 to over $10,000,000.

4/ Additional local/County rates/fees apply. In DE, state + local rate may not exceed 4% of value of property.

5/ Based on value, from $2/$500 to $6.05/$500 of consideration.

6/ Includes portion received by state rate of $0.90; local government share of $1.10, and state Housing Resources Commission

share of $0.30.

7/ Local transfer tax and recordation fees additional; rates vary by locality. State rate is $1.25/$500 for first-time homebuyers.

8/ Rate varies. For principal residence, the rate is $2.50/ $500 on first $100,000 in value and $7.25/$500 on value over $100,000.

9/ For value of $500,00 or less.

10/ Plus additional 1% of value on residential conveyances when consideration is greater than $1 million.

11/ This is the County Transfer Tax rate set throughout the state; cities within those counties may also levy a transfer tax

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

71

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

72

Map 5: Combined 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $25,000/Year)

Source: ORA Analysis. The lighter the blue in the map, the lower the tax burden as a percentage of income.

AK: 8.3%

HI: 15.8%

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

73

Map 6: Combined 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $50,000/Year)

Source: ORA. The lighter the blue in the map, the lower the tax burden as a percentage of income.

AK = 4.2%

HI = 6.8%

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

74

Map 7: Total 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $75,000/Year)

Source: ORA. The lighter blue shading represents a lower tax burden.

AK: 4.3%

HI: 7.6%

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

75

Map 8: Combined 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $100,000/Year)

Source: ORA. The lighter the blue in the map, the lower the tax burden as a percentage of income.

AK: 4.3%

HI: 7.8%

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

76

Map 9: Combined 2020 Tax Burdens (Income, Property, Sales, & Auto) as a % of Income

(Family Earning $150,000/Year)

Source: ORA Analysis. The lighter the blue in the map, the lower the tax burden as a percentage of income.

AK: 4.3%

HI: 7.7%

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

77

Table 27: Population Changes of the Largest City in Each State

City

State

2010

Population

2018

Population

2019

Population

2020

Population

%

Difference

2010 to

2020

Birmingham

Alabama

212,026

209,880

209,403

206,950

-2.39%

Anchorage

Alaska

293,405

291,538

288,000

287,095

-2.15%

Phoenix

Arizona

1,450,267

1,660,272

1,680,992

1,708,127

17.78%

Little Rock

Arkansas

194,003

197,881

197,312

197,866

1.99%

Los Angeles

California

3,796,575

3,990,456

3,979,576

3,970,219

4.57%

Denver

Colorado

603,300

716,492

727,211

735,538

21.92%

Bridgeport

Connecticut

144,911

144,900

144,399

143,525

-0.96%

Wilmington

Delaware

70,787

70,635

70,166

70,376

-0.58%

Jacksonville

Florida

823,280

903,889

911,507

920,570

11.82%

Atlanta

Georgia

422,753

498,044

506,811

512,550

21.24%

Honolulu

Hawaii

338,680

347,397

345,064

341,555

0.85%

Boise

Idaho

206,355

228,790

228,959

229,776

11.35%

Chicago

Illinois

2,697,650

2,705,994

2,693,976

2,677,643

-0.74%

Indianapolis

Indiana

821,632

867,125

876,384

877,903

6.85%

Des Moines

Iowa

204,573

216,853

214,237

212,312

3.78%

Wichita

Kansas

382,872

389,255

389,938

391,731

2.31%

Louisville

Kentucky

597,738

620,118

617,638

618,338

3.45%

New Orleans

Louisiana

347,900

391,006

390,144

389,476

11.95%

Portland

Maine

66,087

66,417

66,215

66,803

1.08%

Baltimore

Maryland

621,180

602,495

593,490

586,131

-5.64%

Boston

Massachusetts

620,623

694,583

692,600

691,531

11.43%

Detroit

Michigan

711,049

672,662

670,031

665,369

-6.42%

Minneapolis

Minnesota

383,083

425,403

429,606

433,111

13.06%

Jackson

Mississippi

173,750

164,422

160,628

157,821

-9.17%

Kansas City

Missouri

460,732

491,918

495,327

497,159

7.91%

Billings

Montana

104,539

109,550

109,577

109,736

4.97%

Omaha

Nebraska

432,672

468,262

478,192

478,393

10.57%

Las Vegas

Nevada

584,780

644,644

651,319

662,368

13.27%

Manchester

New Hampshire

109,611

112,525

112,673

112,546

2.68%

Newark

New Jersey

277,347

282,090

282,011

282,520

1.87%

Albuquerque

New Mexico

547,092

560,218

560,513

562,540

2.82%

New York

8,192,426

8,398,748

8,336,817

8,253,213

0.74%

Charlotte

North Carolina

738,678

872,498

885,708

900,350

21.89%

Fargo

North Dakota

105,928

124,844

124,662

125,209

18.20%

Columbus

Ohio

790,694

892,533

898,553

903,852

14.31%

Oklahoma City

Oklahoma

582,118

649,021

655,057

662,314

13.78%

Portland

Oregon

585,427

653,115

654,741

656,751

12.18%

Philadelphia

Pennsylvania

1,528,338

1,584,138

1,584,064

1,578,487

3.28%

Providence

Rhode Island

178,114

179,335

179,883

179,270

0.65%

Charleston*

South Carolina

350,209

136,208

137,566

139,714

7.12%

Sioux Falls

South Dakota

154,594

181,883

183,793

187,809

21.49%

Nashville*

Tennessee

601,222

669,053

670,820

671,295

2.88%

Houston

Texas

2,114,761

2,325,502

2,320,268

2,316,120

9.52%

Salt Lake City

Utah

186,564

200,591

200,567

204,087

9.39%

Burlington

Vermont

42,417

42,899

42,819

42,899

1.14%

Virginia Beach

Virginia

439,038

450,189

449,974

451,231

2.78%

Seattle

Washington

610,383

744,955

753,675

769,714

26.10%

Charleston

West Virginia

51,400

47,215

46,536

45,879

-10.74%

Milwaukee

Wisconsin

595,120

592,025

590,157

589,067

-1.02%

Cheyenne

Wyoming

59,901

63,957

64,235

64,742

8.08%

WASHINGTON, DC

605,126

702,455

705,749

712,816

17.80%

Source: US Census Bureau. 2010 data: Table DP-1. Profile of General Demographic Characteristics: 2010. 2018 Data: Annual Estimates of

the Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2018 Population: April 1, 2010 to July 1, 2018 Release

Date: May 2019. 2018 Estimates for Burlington, VT: Census Quick Facts; accessed February 27, 2020. 2019 Data: Annual Estimates of the

Resident Population for Incorporated Places of 50,000 or More, Ranked by July 1, 2019 Population: April 1, 2010 to July 1, 2019 Release

Date: May 2020. 2020 Data: Subcounty Resident Population Estimates: April 1, 2010 to July 1, 2019; April 1, 2020; and July 1, 2020

(SUB-EST2020)

*In the 2017 report, the largest cities in South Carolina and Tennessee changed to Charleston, South Carolina (previously Columbia); and

Nashville, Tennessee (previously Memphis).

Appendix

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

78

Map 10: Population of the Largest Cities as a % of the State’s Total Population, 2020

Source: ORA Analysis of data from Table 27 and the US Census Bureau, Population Division, Subcounty Resident Population Estimates: July 1, 2020 (SUB-EST2020).

AK: 39.3%

HI: 24.3%

2020 Tax Rates and Tax Burdens in the District of Columbia: A Nationwide Comparison

79

Office Locations and Telephone Numbers

Office of the Chief Financial Officer

The John A. Wilson Building

1350 Pennsylvania Avenue, NW, Suite 203

Washington, DC 20004

Office hours: Monday through Friday, 8:00 a.m. – 6:00 p.m.

(202) 727-2476

Office of the Chief Financial Officer

Fitzroy Lee, Chief Financial Officer (Interim)

Angell Jacobs, Chief of Staff and Deputy Chief Financial Officer

David Tseng, General Counsel

Alok Chadda, Chief Information Officer

Paul Lundquist, Executive Director for Management and Administration

David Umansky, Public Affairs Officer

Timothy Barry, Executive Director for Integrity & Oversight

Marshelle Richardson, Chief Risk Officer

Jeffrey Gander, Continuous Improvement Officer

Office of Revenue Analysis (ORA)

Norton Francis, Deputy Chief Financial Officer (Interim)

1101 4

th

Street, SW, Suite W770, Washington, DC 20024

(202) 727-7775

Office of Budget and Planning (OBP)

Eric Cannady, Deputy Chief Financial Officer

1350 Pennsylvania Avenue, NW, Suite 229, Washington, DC 20004

(202) 727-6234

Office of Finance and Treasury (OFT)

Carmen Pigler, Deputy Chief Financial Officer and Treasurer

1101 4

th

Street, SW, Suite W800, Washington, DC 20024

(202) 727-6055

Office of Financial Operations and Systems (OFOS)

Kimberly Williams, Deputy Chief Financial Officer

1100 4

th

Street, SW, Suite E800, Washington, DC 20024

(202) 442-8200

Office of Tax and Revenue (OTR)

Keith Richardson, Deputy Chief Financial Officer

1101 4

th

Street, SW, Suite W750, Washington, DC 20024

(202) 442-6200

DC Lottery

Frank Suarez, Executive Director

Economic Development and Regulation

Leroy Clay III, Associate Chief Financial Officer

EventsDC

Henry Mosley, Associate Chief Financial Officer

Government Operations

Angelique Hayes Rice, Associate Chief Financial Officer

Government Services

George Dines, Associate Chief Financial Officer

Human Support Services

Delicia Moore, Associate Chief Financial Officer

Not-for-Profit Hospital Corporation

Lilian Chukwuma, Chief Financial Officer, United

Medical Center

Primary and Secondary Education

Deloras Shepherd, Associate Chief Financial Officer

Public Safety and Justice

David Garner, Associate Chief Financial Officer

Prepared By:

Government of the District of Columbia

Office of Revenue Analysis

1101 4

th

Street, SW

Suite W770

Washington, DC 20024

(202) 727-7775