Research Methodology

What we publish

TaxEase publishes ranked datasets and research reports comparing tax outcomes across the 50 states + D.C. Every ranking uses the same per-state data lake refreshed for tax year 2026: effective income tax, effective property tax, combined state + average local sales tax, retirement-income treatment, and high-level business tax climate.

Effective income tax rate

We use the average effective rate paid by middle-quintile households as reported by the relevant state Department of Revenue, cross-checked against Tax Foundation State Individual Income Tax Rates and Brackets. Top marginal rates are noted but not used for cross-state ranking because they don't represent typical incidence.

Effective property tax rate

Property tax paid divided by median market home value, from U.S. Census Bureau American Community Survey (5-year) and corroborated against state DOR aggregates. For composite burden, we assume a household home value of ~2× annual income, a national average.

Combined sales tax rate

State statutory rate plus a population-weighted average of local rates, per Tax Foundation mid-year 2025 sales tax publication. For composite burden, we assume 30% of income is spent on taxable goods — a defensible average from Bureau of Labor Statistics Consumer Expenditure Survey data.

Composite tax burden

burden = income_rate + (property_rate × 2) + (sales_rate × 0.30)

The 2× multiplier converts property rate (on home value) into an income-equivalent share; the 0.30 reflects the taxable-spend share. The output is comparable across states but is not a precise dollar bill — it's an apples-to-apples ranking metric.

Retirement-friendliness score

score = 50
       + retirement bonus (no-tax +30, SS-exempt +18, partial +8, fully -10)
       - property_rate × 1000
       - sales_rate × 100
       - income_rate × 150

Clamped to 0–100. The score isolates tax incidence on retirement income; it doesn't include healthcare cost or climate.

Take-home pay calculations

For $100k and $500k benchmarks we apply 2026 federal brackets via the Internal Revenue Bulletin, FICA at 7.65% (subject to Social Security wage base), and each state's effective income tax rate. Local income taxes (NYC, Yonkers, Detroit, Philadelphia) and pre-tax deductions (401(k), HSA) are excluded for comparability — use our calculators for personal figures.

Update cadence

Datasets refresh on January 1 for the new tax year and again at mid-year if states pass rate changes. Each ranking displays an "Updated" badge with the month and tax year.

Limitations

• Effective rates are averages — your specific household may differ.
• Cost of living, healthcare costs, and tax credits are not part of the composite burden.
• City-level local income taxes are noted in state guides but not in the headline rankings.
• Future legislated rate cuts (NC, KY, IA) are reflected in the 2026 columns.

Sources

See Data Sources for every official authority we cite. Editorial workflow is documented in our Editorial Policy.