Not all state taxes are created equal, and some states charge residents much more than others to live there.
Trending Now: 9 States With No Income Tax — Lower Your Tax Bills by Moving to These States
Find Out: 9 Low-Effort Ways To Make Passive Income (You Can Start This Week)
So I asked ChatGPT to identify which states have the highest overall tax burden and break down why it costs so much. Here’s what it said.
1. New York
Not surprisingly, New York has one of the highest tax rates in the U.S.
New York has a progressive state income tax system with nine tax brackets ranging from 4% to 10.9% (depending on your income level). In addition to state income tax, the state sales tax rate is 4%, with local tax rates added to that amount. For example; New York City adds another 4.875% to the sales tax rate, making it a total of 8.875%.
And property taxes vary, but with New York real estate prices being so high, residents are paying more than many other states.
Read More: If Trump Replaces the Income Tax, Here Are 3 States That Would Suffer Most
2. California
Also unsurprisingly, California has one of the highest tax burdens in the U.S., mostly due to its state income tax rates.
California also has a progressive tax structure, with personal state income tax rates ranging from 1% to 13.3%, which is the highest state income tax rate in the U.S. California also has a high sales and use tax rate of 7.25%, with some jurisdictions adding on to this, making it closer to 8% or 9%.
Property taxes are limited by Proposition 13 but still can cost a pretty penny due to high home valuations.
3. New Jersey
New Jersey is another expensive place to live and pay taxes in, with a progressive income tax system and high property taxes.
The state income tax ranges from 1.4% to 10.75%, with the top rate applied to income above $1 million. New Jersey also has a statewide sales tax of 6.625%.
Property taxes fluctuates by county, but are some of the highest in the U.S. due to local funding for schools and municipal services.
4. Illinois
While Illinois doesn’t seem like a state that would charge high taxes, there is a flat state income tax, moderate sales tax and very high property taxes (depending on county).
The state’s individual income tax is a flat 4.95% no matter the income level, and a statewide sales tax of 6.25% (but local governments push this higher). Property taxes vary by county, but are a major driver of the state’s overall tax burden.
5. Connecticut
Connecticut charges a progressive state income tax, moderate sales tax and high property taxes.
There are seven state income tax brackets, ranging from 3% to 6.99% (depending on income). Connecticut also imposes a statewide sales and use tax of 6.35%.
As with most states, property taxes differs depending on the county, but can become a heavy burden for homeowners with valuable houses in certain municipalities.
A Note About AI and Financial Advice
AI tools like ChatGPT can help summarize publicly available tax information and explain differences between states. However, they should not replace professional tax advice.
Tax laws change frequently, and your individual tax situation depends on many factors, including income level, deductions and where you live. Before making financial decisions based on tax data, consider consulting a qualified tax professional or financial advisor.
Keep Financial Literacy Month going — learn how the MoneyLion app helps you track, manage and move your money in one place.
More From GOBankingRates
- 5 Tax Loopholes the Ultra-Wealthy Use That Most Americans Don't Know About
- I'm an Accountant: 6 'Big Beautiful Bill' Tax Changes That Will Benefit the Middle Class
- 6 Safe Accounts Proven to Grow Your Money Up to 13x Faster
- 10 Cars That Outlast the Average Vehicle
This article originally appeared on GOBankingRates.com: I Asked ChatGPT Which States Have the Highest Tax Burden — Here’s What It Said
