Where Virginia And DC Tax Rates Rank Among States

WASHINGTON, DC — With income tax season in full swing, it might just be salt on the wound to know that Virginia has one of the higher tax rates in the country, according to a recent study. The median Virginia household pays about $300 more than the average U.S. household, which pays more than $5,700 in federal income taxes, although DC residents pay about $200 less, according to the Bureau of Labor Statistics. And while we’re all faced with that same tax burden, there is significant difference when it comes to state and local taxes.

Virginia came in at 27th place in taxes among all U.S. states, plus Washington, D.C., which ranked 18th in the study by personal finance website WalletHub. The most costly state was Illinois. When adjusted for the cost of living, the District compares much worse, ranking 46th among the states while Virginia remains the same at 27th place. Connecticut, Nebraska, New York and Rhode Island follow Illinois as the highest taxed states, while Alaska, Delaware and Montana took the top three spots for lowest taxes.

Neighboring Maryland ranked 36th.

WalletHub compared state and local tax rates in the 50 states and the District of Columbia against national medians to come up with its ranking.

The authors broke the study down into five categories defining taxation impacts (and DC and Virginia's data in these categories):

• Effective total state and local tax rates on median U.S. household: 10 percent for DC, 10.87 percent for Virginia
• Annual state and local taxes on median U.S. household: $5,574 for DC, $6,061 for Virginia
• Percent difference between state and U.S. average: Minus 7.09 percent for DC, 1.03 percent for Virginia
• Annual state and local taxes on median state household: $8,811 for DC, $7,276 for Virginia
• Adjusted overall rank (based on cost of living index): 46 for DC and 27 for Virginia

The study also found that red states generally impose lower taxes than blue states. Red states' average position on the ranking as 24.8, while blue states' average position was 27.71.

SEE ALSO:

• 2018 Income Tax Season: Filing Under Way

See the interactive map below:

See WalletHub's research methodology here, pulled from their website:

1. Real-Estate Tax: We first divided the "Median Real-Estate Tax Amount Paid" by the "Median Home Price" in each state. We then applied the resulting rates to a house worth $184,700, the median value for a home in the U.S., in order to obtain the dollar amount paid as real-estate tax per household.
2. Vehicle Property Tax: We examined data for cities and counties collectively accounting for at least 50 percent of the state's population and extrapolated this to the state level using weighted averages based on population size. For each state, we assumed all residents own the same car: a Toyota Camry LE four-door sedan, 2017's highest-selling car, valued at $24,000, as of March 2018.
3. Income Tax: We used the percentage of income (middle income rate) spent on income tax from WalletHub's Best States to Be Rich or Poor from a Tax Perspectivereport. "Income" refers to the mean third quintile U.S. income amount of $55,754.
4. Sales & Excise Tax: We used the percentage of income (middle income rate) spent on sales and excise taxes from WalletHub's Best States to Be Rich or Poor from a Tax Perspective report. "Income" refers to the mean third quintile U.S. income amount of $55,754.

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