The IRS has postponed theto May 17 — and most state taxes will now also be due on that same day. There are, however, a handful of states that bypass the whole income tax thing. States need money to operate, though, and there are plenty of other ways they can collect revenue — including sales and property taxes.
Unless you live in one of the few states that don’t collect income taxes, you’re on the hook for filing a state return. (The IRS began accepting federal returns on Feb. 12 this year. And, if you need extra time, you can apply for an extension by filling out the IRS form 4868.) State tax deadlines vary; you can check yours on the IRS website.
Somewill throw in state filing for free if you pay to prep a federal return, but others will charge an extra fee. Note that if you’ve recently moved — or work in a different state than where you live — you might need to file more than one state tax return.
States with no income tax
In addition to your federal tax return, most states also require you to file a state return. There are seven states with no income tax, however. They are:
- South Dakota
Things are a bit more complicated in Tennessee and New Hampshire, which don’t tax earned income. They do tax investment income (and dividends), however, so residents there may still be required to file a return. The rest of us — whether single filers or joint filers — have to pay some level of state income tax, whether it’s a flat rate or based on your taxable income.
States with no sales tax
Sales tax is a tax the government puts on the sale of goods and services. It’s typically collected at the state, city and local municipality levels. Sales tax rates vary widely across the 45 states (and the District of Columbia) that collect state sales tax. In addition to the states that collect sales taxes, 38 states also allow for local sales taxes. In some instances, local taxes can be higher than state taxes.
The five states that don’t collect sales tax are:
- New Hampshire
The states with the highest combined sales tax between state and local sales taxes are:
- Tennessee — 9.47%
- Louisiana — 9.45%
- Arkansas — 9.43%
- Washington — 9.17%
- Alabama — 9.14%
While the state of Alaska doesn’t collect sales tax, its local sales tax average 1.43%. It’s the state with the lowest overall sales tax. California has the highest state-enforced sales tax at 7.25%.
Many states exempt groceries from sales tax, while some tax it at a lower rate compared with other goods. And, every year, many states offer a sales tax holiday. Some states like Alabama, Texas and Florida offer multiple tax holidays — for hurricane supplies and school supplies. Mississippi has one just for firearms and hunting supplies.
How property taxes figure in
All 50 states and the District of Columbia collect some sort of property tax. It can be collected at the state, county and local level. Property taxes are one of the main sources of local revenue, and there are five states whose property taxes account for 30% or more of its overall revenue:
- New Jersey
- Rhode Island
Though Alabama’s property taxes account for only about 10% of its revenue, it has one of the highest combined sales taxes — between state and local — in the country.
Correction, April 30, 2020: A previous version of this story stated that Alabama does not have a state income tax, which it does.