States With the Highest Income Tax Rates

State income tax is a percentage of income that individuals and businesses are required to pay to a state government. These funds are a primary source of revenue for states, used to pay for public services such as education, transportation infrastructure, healthcare, and public safety. The amount of tax a person owes can vary significantly from one state to another, as each state establishes its own tax laws, rates, and brackets.

Ranking the Highest State Income Tax Rates

The most direct way to compare state income tax burdens is by examining their top marginal tax rates. This rate represents the percentage of tax paid on the highest dollar of earned income. States with the highest top marginal rates often apply them only to individuals with very high incomes.

Some of the states with the highest top marginal rates include:

• California currently imposes the highest top marginal income tax rate in the country at 13.3%, which applies to taxable income over $1 million for single filers.
• Hawaii follows with a top rate of 11%, which kicks in for single filers with taxable income over $325,000.
• New York also has one of the highest rates, taxing income over $25 million at 10.9%.
• New Jersey’s top rate is 10.75%, applicable to income exceeding $1 million.
• The District of Columbia is also notable, with a top marginal rate of 10.75% that applies to income over $1 million.
• Minnesota’s highest bracket is 9.85% for income over $193,240 for single filers.

These percentages represent the marginal rate, not a flat tax on all income. A taxpayer’s total income is not uniformly taxed at this single high rate because states use a system of brackets.

Understanding Progressive Tax Brackets

Most states that levy an income tax use a progressive tax system, where the tax rate increases as income rises. This system is built on a series of income ranges called tax brackets. Each bracket has a corresponding marginal tax rate, and as a person’s income crosses into a higher bracket, only the income within that new bracket is taxed at the higher rate. This prevents a sudden large tax increase just for earning a few dollars more.

To illustrate, consider a single filer in a state with a tax system like Hawaii’s. If their taxable income is $120,000, their entire income is not taxed at the 11% top rate. Instead, the first portion of their income falls into lower brackets and is taxed at lower rates. For example, the first $2,400 might be taxed at 1.4%, the income from $2,401 to $4,800 at 3.2%, and so on, with each segment of income taxed at its corresponding bracket’s rate.

This leads to the distinction between a marginal tax rate and an effective tax rate. The marginal rate is the rate paid on the last dollar of income earned. The effective tax rate, conversely, is the total tax paid divided by total taxable income. This number provides a more accurate picture of an individual’s overall tax burden.

Considering Local Income Taxes

The state-level tax rate does not always represent the final calculation for an individual’s income tax liability. In several states, counties, cities, or other municipalities are authorized to levy their own separate income taxes on top of the state tax. These local taxes can substantially increase the total tax burden for residents of those specific jurisdictions.

For instance, a resident of New York City pays both New York State income tax and a city income tax, which has its own set of brackets and rates. Similarly, Maryland authorizes its counties and the city of Baltimore to levy local income taxes, which are collected along with the state tax. Many cities in states like Ohio and Pennsylvania also impose municipal income taxes, which are a primary source of their revenue.

States Without a Personal Income Tax

A number of states do not levy a broad-based personal income tax at all. New Hampshire fully repealed its tax on interest and dividend income as of 2025, joining the following states:

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

These states must still generate revenue to fund government services, and they often do so through other tax mechanisms. It is common for these states to have higher-than-average sales taxes or property taxes to compensate for the absence of income tax revenue. For example, while Washington has no personal income tax, it does have a 7% tax on certain long-term capital gains above a significant threshold.