… in the 10 highest burden states, individual income tax collections per capita in fiscal 2015 exceeded the national average of $967. Similarly, property taxes tend to exceed the national average in high burden states, while they tend to be lower in states at the other end of the tax burden spectrum.
And then you have another effort in Olympia to start a capital gains tax. It’s being sold as a way to ease the strain of higher property taxes.
Washington's property taxes rank in the middle when compared to other states. Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juries Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte.
She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
While taxpayers in Washington dodge income taxes, they pay some of the highest sales taxes in the country, with a combined state and average local rate of 9.23%. While the idea to enact an income tax has been floated in the state legislature and at the ballot box over the years, none of the proposed measures have passed.
The flip-side of the state’s income tax-free status is its high sales taxes. The table below shows sales tax rates for all the counties and the largest cities in Washington.
Those taxes apply to nearly all tangible goods sold in the state of Washington as well as many services. Among the services subject to sales tax are cleaning, construction, installations, altering, lawn maintenance, fitness club memberships, tattoos, catering services and recreational activities.
If you’re thinking about buying a house on the Puget Sound or in sunny Eastern Washington, you’ll want to take the cost of local property taxes into account. Statewide, residents pay an average of $3,601 a year in property taxes.
But because home values here are high, that's a statewide effective property tax rate of only 0.93%, which is actually slightly lower than the 1.07% national average. This tax, officially called the real estate excise tax (MEET), is equal to a specific percentage of the price of the home being sold, and it is typically paid by the seller.
Cities also have the option to levy an additional 0.25% tax on property sales. As of Jan. 1, 2020, Washington revamped the rate structure for its MEET tax.
Below is a breakdown of what Washington residents will pay in these taxes when they sell their home. Seattle, the largest city in Washington State, averages 71 sunny days a year.
SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
To find the places with the lowest tax burdens, SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden, we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We then calculated the total number of licensed drivers within each county.
The county with the lowest tax burden received a score of 100 and the remaining counties in the study were scored based on how closely their tax burden compares. Local governments do make up the revenue gap in other ways, however, either through property taxes (or higher income or sales taxes, depending on which one resident's get a break from), or lesser services, and some local jurisdictions do impose their own sales tax on shoppers in their communities.
Credit: AP / Dan JolingThe Last Frontier state is one of just two in the U.S. that give residents a break from income and state sales taxes. However, some Alaskans do pay a sales tax to their local government.
The Silver State does have a 6.85% sales tax, and also collects fees, most of them related to those casinos the tourists flock to. Credit: AP / Jim Colette Granite State has no sales tax and doesn't tax earned income, although it does require residents to file a tax return when they have interest and dividend income in excess of $2,400, or $4,800 if they're married and filing jointly.
However, Tennessee's “hall tax” is on its way out, and will be fully off the books in 2022. Credit: AP / Barry Sweetie Washington state doesn't have an income tax, it does have a sales tax of 6.5%, and also allows localities to add as much as 3% on top of that.
Washington state voters rejected a ballot measure to impose an income tax on the wealthiest residents that pitted Bill Gates Sr. against Microsoft Corp., the company co-founded by his son. Redmond, Washington -based Microsoft, the world’s largest software company with about 90,000 employees, opposed the plan.
Brad Smith, Microsoft’s general counsel and senior vice president, said the measure would make it harder to attract employees and stifle job growth. “This initiative would give Washington one of the top five highest state income-tax rates in the country,” Smith said in an Oct. 27 e-mailed statement.