Maryland Has One Of Highest Tax Rates Rank In US

ANNAPOLIS, MD — With income tax season in full swing, it might just be salt on the wound to know that Maryland has one of the highest tax rates in the country, according to a recent study. The median Maryland household pays about $1,000 more than the average U.S. household, which pays more than $5,700 in federal income taxes, according to the Bureau of Labor Statistics. And while we’re all faced with that same obligation, there is significant difference when it comes to state and local taxes.

Maryland came in at 36th place in taxes among all U.S. states, plus Washington, D.C., the 51st being the most costly state, Illinois, according to the personal finance website WalletHub. When adjusted for the cost of living, Maryland compares even worse, ranking 44th among the states. 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 Virginia ranked 27th and the District of Columbia ranked 18th in the study.

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 Maryland's data in these categories):

• Effective total state and local tax rates on median U.S. household: 11.96 percent
• Annual state and local taxes on median U.S. household: $6,666
• Percent difference between state and U.S. average: 11.12 percent
• Annual state and local taxes on median state household: $9,552
• Adjusted overall rank (based on cost of living index): 44

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 In Maryland
• 20 Latest Tax Preparers Barred From Filing Returns In Maryland

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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