The Tax Foundation

New York

The Facts on New York’s Tax Climate

Last updated July 1, 2009

Here are some basic facts on New York’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 25 in New York
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, New York taxpayers had to work until April 25, ranking it 3rd highest in the nation, 12 days after the national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states are; Pennsylvania, April 14 (ranked 11th), New Jersey, April 29 (ranked 2nd), Connecticut, April 30 (ranked 1st) and Vermont, April 12 (ranked 19th).
Full study of Tax Freedom Day, nationwide and in each state

New York's State/Local Tax Burden Second-Highest in Nation
During the past three decades New York has consistently had one of the nation's highest state/local tax burdens, ranking first or second every year since 1977. Currently estimated at 11.7% of income, New York's state/local tax burden percentage is the 2nd highest nationwide, well above the national average of 9.7%. New Yorkers pay $6,419 per capita in state and local taxes.
New York's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

New York's 2010 Business Tax Climate Ranks 49th
New York ranks 49th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Pennsylvania (27th), New Jersey (50th), Connecticut (38th) and Vermont (41st).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)

New York's Individual Income Tax System
New York's personal income tax system consists of seven brackets with a top rate of 8.97%, kicking in at an income level of $500,00. Among states levying personal income taxes, this top rate ranks the state 8th highest nationally. New York's 2006 individual income tax collections were $2,003 per person, which ranked highest in the nation. 
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

New York's Corporate Income Tax System
New York's corporate tax structure is composed of a flat rate of 7.1% on all corporate income. Among states levying corporate income taxes, New York's rate ranks 24th highest. In 2007, state-level corporate tax collections (excluding local taxes) were $281 per capita and ranked 8th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2009
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

New York Sales Tax Low at the State Level, High Locally; Cigarette and Gas Tax Highest in Nation
New York levies a 4% general sales or use tax on consumers, below the national median of 6%.On the other hand, the state permits its localities to levy much higher sales taxes than other states do. In 2006, state and local governments combined collected $1,131 per capita in general sales taxes, which ranks 12th highest nationally. New York's gasoline tax stands at 42.5 cents per gallon—the highest gas tax in the nation. New York's cigarette tax stands at $2.75 per pack of twenty—the second-highest nationally. The sales tax was adopted in 1951, the gasoline tax in 1923 and the cigarette tax in 1941. 
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

New York Property Taxes among Nation's Highest
New York's local governments collected $1,890.70 per capita in property taxes during fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. New York is one of the13 states that collect no state-level property taxes. Its per capita property tax collections in FY2006 rank 5th nationally. 
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: New York is a Donor State
New York taxpayers receive less federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, New York citizens received approximately $0.79 in the way of federal spending. This ranks the state 42nd lowest nationally and represents a decline from 1995, when New York received $0.87 per dollar of taxes in federal spending (ranked 40th nationally). Neighboring states and the amount of federal spending received per dollar of federal taxes collected were: Pennsylvania ($1.07), New Jersey ($0.61), Connecticut ($0.66), and Vermont ($1.08).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

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