taxes

State tax rates vary

Depending on where you live in this country, state tax rates are computed differently. Many states earn revenue by taxing income. Others issue a sales tax. Most states use a combination of the two, along with property and estate taxes. Below, see information on state tax rates for income and the sale of taxable goods.

  • Income taxes. The state tax rates for income can be up to 10 percent of earnings. This is in addition to the federal income tax paid to the Internal Revenue Service. Not all states charge income tax on wages. According to the Internal Revenue Service, nine do not, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming. However, some states, including Tennessee and New Hampshire, collect tax on unearned income -- that is, dividend and interest income.
  • Sales taxes. These fees are charged on the sale of taxable goods sold in the state. Typical rates are around 6 percent to 8 percent. Currently, five states don't charge sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. But even if a state doesn't charge a sales tax, consumers may still be asked to pay a fee. That's because some municipalities within these states charge a sales tax.Even in places that don't impose a sales tax, there may be state tax rates for the sale of specific services and goods. For example, some states assess special taxes for travel-related purchases, such as vehicle rentals and overnight hotel stays.

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