5 Cities With the Lowest Local Tax Burden in the U.S.


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In November, the Office of Revenue Analysis for the District of Columbia released a report on the tax rates and tax burdens of the largest city in each state in the country. The report is designed to give policymakers and curious wonks an idea of how D.C. tax environment compares against the tax environment in other major cities in the U.S., but we can use the image it contains of the national tax situation — as described by the largest city in each state — to look at which states have the lowest general tax burden and why.

For a hypothetical family of three earning $50,000 per year, the average local tax burden was $4,669, or 9.3% of income. The range of this burden stretches from 3.7% percent at the low end to 20.9% at the high end. The D.C. Office of Revenue Analysis highlights a couple of reasons why tax burdens can vary so greatly between the queen cities of different states. These reasons include variable demand for government services (whether garbage collection is a private or public service), differences in the cost of living, the size and health of the tax base, and even geography. As half the country is well aware, snow and ice removal is expensive.

We’ll break out the results for different income levels in each city, but lowest five were determined using a hypothetical family of three earning $50,000 in 2013. Keep in mind that the data is for state and local taxes only, federal taxes are excluded.

Income tax ($) Property tax ($) Sales tax ($) Auto tax ($) Burden ($) Burden (%)
Cheyenne, WY 1,082 476 287 1,845 3.7
Billings, MT 1,192 939 401 2,532 5.1
Memphis, TN 0 1,164 1,283 242 2,689 5.4
Jacksonville, FL 1,760 692 272 2,725 5.4
Anchorage, AK 2,507 274 2,782 5.6
Honolulu, HI 922 1,088 648 273 2,931 5.9
National Average 1,260 2,588 716 327 4,669 9.3
National Median 1,196 2,094 719 287 4,331 8.7