Hawaii has been ranked as the state with the highest tax burden in the United States, according to a recent study by personal finance website WalletHub. Residents in the island state pay 13.30 percent of their income towards state taxes, the highest proportion in the nation.
The study placed New York second at 12.39 percent, followed by Vermont (11.10 percent), New Mexico (10.75 percent), and Maine (10.01 percent). At the opposite end, Alaska had the lowest tax burden at 4.92 percent, with New Hampshire (5.38 percent), Tennessee (6.21 percent), Florida (6.27 percent), and Delaware (6.28 percent) also ranking low.
WalletHub's rankings consider the combined percentage of income paid for property tax, income tax, sales tax, and excise tax on specific goods like alcohol and tobacco. The figures are based on average income and state tax rates, providing a measure of what state taxes actually cost residents.
Hawaii's high tax burden is partly due to its marginal income tax system, which imposes higher rates on higher earners. Residents earning between $48,000 and $150,000 pay 8.25 percent, a rate higher than the top rate in all but seven states. Additionally, Hawaii's sales and excise tax burden was the highest in the nation at 7.48 percent, eight times that of New Hampshire (0.91 percent).
Hawaii homeowners face additional financial pressure, with homeowners insurance rates rising 50 percent in 2025 following fires and floods from 2023 to 2025, according to InsuranceNewsNet.
