The Tax Foundation recently conducted a a study of the tax climates in each of the fifty states and then rated and ranked them based on five categories: corporate tax, individual income, sales tax, unemployment insurance tax, and property tax. The Tax Foundation’s rankings are designed to show how well state tax systems are structured, rather than simply rank the states by the amount of taxes assessed.
Connecticut finished 43rd in overall tax climate and it ranked in the individual tax categories as follows: 32 (corporate tax), 37 (individual income tax), 27 (sales tax), 21 (unemployment insurance tax), and 49 (property tax). Connecticut was also ranked 43rd in each of the three preceding years.
Sales Tax
Five states do not have statewide sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. The five states with the lowest average combined rates are Alaska (1.78 percent), Hawaii (4.35 percent), Wisconsin (5.41 percent), Wyoming (5.42 percent), and Maine (5.55 percent).
The five states with the highest average combined state and local sales tax rates are Tennessee (9.46 percent), Arkansas (9.30 percent), Louisiana (9.01 percent), Alabama (8.97 percent), and Washington (8.90 percent). Residents of 38 states are also subject to sales taxes at the local level.
Connecticut’s state sales tax rate of 6.35% is ranked 12th in the country. Because there are no local sales taxes in Connecticut, its combined rate of 6.35% is ranked 31st overall. It collects a state gasoline tax of 37.51 cents which is the sixth-highest in the country while its cigarette tax of $3.65 ranks 3rd in the United States.
Property Tax
Connecticut finished dead last in the property tax climate rankings. It has an effective property tax rate of 2.11%, which ranks 1st nationally. In state and local property tax collected per capita, Connecticut is also ranked 1st in the country with $2,989.
It is wise for both individual and business taxpayers located in Connecticut to consult with a tax professional to help assess their current tax situation, looking ahead to the future. If you have any question about taxes, especially in planning ahead for the next filing season, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
