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State-Local Tax Burden Rankings:
By Liz Malm and Gerald Prante
Methodological Overview and Data Sources
A state’s state-local tax burden is the total amount residents of that state pay in state
and local taxes, even if some of those payments go to out-of-state jurisdictions. Our
measure expresses this tax burden as a proportion of total state income. This means
that two broad statistics are needed to make the calculation for each state: total state
and local taxes paid by state residents (what we call the tax burden) and total state
For the tax portion, the first step is to convert tax collections by state, as reported by
the Census Bureau’s Government Finance Division,1 to total state and local taxes paid
by residents of each state, even if those taxes are paid to out-of-state jurisdictions.
Each tax collection amount from the Census Bureau is first divided into categories,
such as property taxes being narrowed to personal property or property taxes on
business property, to ensure the most accurate final tax burden estimates can be
calculated. Then, the collection figures are allocated to states via a variety of methods.
In some instances, the collection amount is assumed to be borne fully by the residents
of the collecting state. In others, the amount collected is allocated to other states.
Section B contains a detailed overview of what types of taxes are included in the total
taxes paid measure, in addition to detailed descript