CHARLOTTE, NC — Tax day will be here before you know it (it’s April 17 this year), which means for many of us, thoughts are turning to our wallets. When it comes to taxes, North Carolinians pay slightly less than the national average, according to a recent study by WalletHub.
The Tar Heel State came in 24th place in taxes among all U.S. states, plus Washington, D.C., which means while it would be nice to pay lower taxes like some other states, it could be a lot worse. Illinois, Connecticut, Nebraska and New York are the highest taxed states, while Alaska, Delaware and Montana took the top three spots for lowest taxes.
WalletHub broke the study down into five categories defining taxation impacts (and North Carolina’s data in these categories):
effective total state and local tax rates on median U.S. household: 10.64 percent annual state and local taxes on median U.S. household: $5,934 percent difference between state and U.S. average: -1.09 percent annual state and local taxes on median state household: $5,167 adjusted overall rank (based on cost of living index): 20
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 the interactive map below:
See WalletHub’s research methodology here, pulled from their website:
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. 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. 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. 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.
Patch Editor Geoff Dempsey contributed
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