Washington

The Facts on Washington's Tax Climate

Here are some basic facts on Washington's tax system and how it compares to other states:

Tax Freedom Day Arrives on April 16 in Washington
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Washington taxpayers work until April 16 to pay their total tax bill, ranking it 5th highest in the nation. This is 4 days after national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states were: Idaho, April 3 (ranked 36th) and Oregon, April 8 (ranked 23rd).
Full study of Tax Freedom Day, nationwide and in each state

Washington's State and Local Tax Burden Below National Average
Washington's state and local tax burden is currently estimated at 9.3% of income (29th nationally), below the national average of 9.8%. Compared to the 1977 data, Washington had a tax burden of 9.6% (31st nationally), decreasing 0.3% overall. Currently Washington taxpayers pay $4,408 per capita in state and local taxes.
Washington's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009 

Washington's 2012 Business Tax Climate Ranks 7th
Washington ranks 7th 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 rank as follows: Idaho (21st), Oregon (13th) and California (48th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)

Washington Levies No Individual Income Taxes
Washington levies no state personal income taxes, joining Alaska, Florida, Nevada, South Dakota, Texas and Wyoming as the only other states not to do so.
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

Washington Levies No Corporate Income Taxes; Levies Nation's Oldest Gross Receipts Tax
Washington's corporate tax structure contains no corporate income tax. Nevada, Texas and Wyoming are the only other states that do not levy corporate income taxes. However, Washington levies the nation's oldest gross receipts tax, the Business and Occupations (B&O) Tax, first instituted in 1933. Washington, Texas, Ohio, Michigan and Delaware are the only states to levy economy-wide gross receipts taxes.
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

Washington Sales and Excise Taxes
Washington levies a 6.5% general sales or use tax on consumers, above the national median of 5.85%.  In 2007 combined state and local general and selective sales tax collections were $2,661 per person, which ranks 2nd highest in the nation. Washington's gasoline tax stands at 37.5 cents per gallon, which ranks 3rd highest nationally. Washington's cigarette tax stands at $2.025 per pack of twenty and ranks 9th highest nationally. The sales tax was adopted in 1933, the gasoline tax in 1921 and the cigarette tax in 1935.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

Washington Property Taxes
Washington is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect the majority of property taxes. Washington's localities collected $835.25 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Washington collects more property taxes than most states do. In FY 2006, Washington collected $257.73 per capita, bringing its combined state/local property taxes to $1,092.98 per capita, which ranks 25th highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Washington is a Donor State
Washington taxpayers receive less federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Washington citizens received approximately $0.88 in the way of federal spending. This ranks the state 38th highest nationally and represents a decline from 1995, when Washington received $0.97 per dollar of taxes in federal spending (ranked 31st nationally). Neighboring states and the federal spending received per dollar of federal taxes collected were: Idaho ($1.21) and Oregon ($0.93).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

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