State taxes are taxes levied by individual U.S. states on income, sales, property, and other goods and services. State tax laws vary by state, with some states having no income tax while others have high income and sales taxes.
The following are the most common types of state taxes:
- Income tax: Most states have a state income tax that is similar to federal income tax, although the rates and rules can differ significantly.
- Sales tax: All states except for Alaska, Delaware, Montana, New Hampshire, and Oregon have a state sales tax.
- Property tax: States collect property tax on real estate and other property.
- Excise tax: Some states impose excise taxes on specific goods and services, such as gasoline or tobacco.
State taxes are used to fund state programs and services such as education, healthcare, and transportation. Some states also use their tax revenue to provide tax incentives to attract businesses and individuals to relocate to their state.
It is important for individuals and businesses to understand the tax laws in their state and to comply with them to avoid penalties and fines. Many states offer resources and information to help taxpayers understand their obligations and to file their taxes correctly.« Back to Glossary Index