Democrat & Chronicle: NY’s tax rates ranked among highest in the nation, study finds

April 9th, 2025

Emily Barnes – New York Connect Team – Read Here

New York state has some of the highest tax rates in the country, according to a newly released study by WalletHub.

The Empire State ranked 50-out-of-51 — with No. 51 having the highest tax rate — on the list, which compared state and local tax rates in all 50 states and the District of Columbia against national medians.

“Every year during tax season, Americans are reminded of just how much of their hard-earned income isn’t theirs to keep,” WalletHub analyst Chip Lupo says. “Living in the right state can ease the stress of tax time, though, as taxpayers in the least expensive states pay less than half as much as those in the most expensive states.”

Here’s what to know.

A closer look at New York state’s numbers

New York has the second-highest total state and local tax rates on a median U.S. household of 14.74%, behind only Illinois, according to WalletHub’s report.

The Empire State also has the third-highest real estate tax rate behind Vermont and Illinois, which is 6.15%, according to WalletHub, and the worst income tax rate — 3.80%.

‘We need to change course’: NY-based advocacy group speaks out about report

“While it may not come as much of a surprise to many New Yorkers that we are saddled with some of the highest taxes in the country, providing relief or prioritizing affordability continues to be more of a talking point than an action item for policymakers in Albany,” says Upstate United executive director Justin Wilcox. “Ironically, this analysis comes to us at the same time legislative leaders are in the process of negotiating a record-high state spending plan that is likely to exceed $250 billion.

“Will these latest findings serve as the wake-up call that lawmakers need to craft a fiscally responsible budget? Not likely. However, as we continue to lose residents and businesses to more financially attractive and competitive states, it becomes increasingly clear every year that we need to change course.”

How WalletHub assessed state tax rates

WalletHub compared all 50 states and the District of Columbia across four different types of taxation: real-estate tax, vehicle property tax, income tax and sales and excise tax. Here’s how WalletHub determined each:

Real estate tax: WalletHub first divided the “Median Real Estate Tax Amount Paid” by the “Median Home Price” in each state, then applied the resulting rates to a house worth $303,400 — the median value for a home in the U.S. — to ultimately get the dollar amount paid as real estate tax per household.

Vehicle property tax: WalletHub looked at city and county data collectively accounting for at least 50 percent of the state’s population and extrapolated the numbers to the state level using weighted averages based on population size. The study also assumes every resident owns the same car — Toyota Camry LE four-door sedan — as it was the highest-selling car in 2024 and was valued at $28,700 as of January 2025.

Income tax: WalletHub used the percentage of income — middle income rate — spent on income tax from their “Best States to Be Rich or Poor from a Tax Perspective” report. Income, in this case, is refers to the mean third quintile U.S. income amount of $79,004.

Sales and excise tax: WalletHub used the percentage of income spent on sales and excise taxes from their “Best States to Be Rich or Poor from a Tax Perspective” report.

Data used to create the ranking was collected as of Feb. 3, 2025 and the information was sourced from the U.S. Census Bureau, the Bureau of Labor Statistics, the Tax Foundation, the Federation of Tax Administrators, the Campaign for Tobacco-Free Kids, Toyota.com, each state’s Department of Motor Vehicles and WalletHub research.