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Forty-three states impose a tax on the income of individuals, sometimes referred to as personal income tax. State income tax rates vary widely from state to state. States imposing an income tax on individuals tax all taxable income (as defined in the state) of residents. Such residents are allowed a credit for taxes paid to other states.
State tax levels indicate both the tax burden and the services a state can afford to provide residents. States use a different combination of sales , income , excise taxes , and user fees . Some are levied directly from residents and others are levied indirectly.
For US federal income tax purposes, state and local taxes are defined in section 164(a) of the Internal Revenue Code as taxes paid to states and localities in the forms of: (i) real property taxes; (ii) personal property taxes; (iii) income, war profits, and excess profits taxes; and (iv) general sales taxes.
These taxes are in addition to federal income tax and are deductible for federal tax purposes. State and local income tax rates vary from zero to 16% of taxable income. [64] Some state and local income tax rates are flat (single rate), and some are graduated. State and local definitions of what income is taxable vary highly.
Tax rates vary by state and locality, and may be fixed or graduated. Most rates are the same for all types of income. State and local income taxes are imposed in addition to federal income tax. State income tax is allowed as a deduction in computing federal income, but is capped at $10,000 per household since the passage of the 2017 tax law ...
The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas, [23] Washington state, and Wyoming. Additionally, New Hampshire and Tennessee levy state income taxes only on dividends and interest income. Of the above states, only Alaska and New Hampshire do not levy a state sales tax.
State tax may refer to: Taxes imposed by U.S. states. State income tax; State sales tax; State tax levels in the United States; Taxes imposed by Indian states.
There are different ad valorem taxes and they are based in some cases on the ownership of real assets ( i.e. property tax), or alternatively they can be "transactional taxes": example is a sales tax. Property taxes usually are determined and collected with annual incidence, while transactional taxes take places at the time when the transaction ...