April is the time of the year when personal income taxes enter the public consciousness. While many individuals concern themselves with meeting the filing deadline, policy makers are concerned with whether or not revenue projections will meet actual revenue collections.
This article presents overview data on state personal income taxes (PIT). It displays data on the per capita personal income tax collections of states in 2014, the most recent complete year of data available. It also examines the share of state revenue that personal income taxes comprise, as well as the growth of states’ personal income tax collections from 1994-2014.
Personal Income Tax Collections Per Capita
In 2014, states collected more than $310 billion in personal income taxes. However, the amount of tax collected varied widely by state. Seven states— Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—do not have a personal income tax.
Among states that do collect a personal income tax, Tennessee and New Hampshire collect the lowest amount per capita, at $37 and $70, respectively. This is because these states only collect PIT on interest and dividend income. New York collects the most PIT per capita, at $2,176, with Connecticut not far behind at $2,161. Most states collect between $500 and $1100 of PIT per capita. See the map below for a full data visualization of PIT collections per capita in 2014.
States' Reliance on Personal Income Tax Collections
Just as states vary in the amount of personal income tax that they collect, each state's reliance on the PIT varies significantly too. The map below presents the percentage of total tax collections that came from the PIT in 2014 by state. Oregon, which does not have a sales tax, received 69 percent of its total tax collections from personal income tax. Massachusetts, New York and Virginia all get more than half of tax collections from the PIT. New Hampshire and Tenessee, on the other hand, receive less than five percent of their collections from the PIT because each only taxes dividends and interest income.
Growth in Personal Income Tax Collections
Aggregate personal income tax collections increased in all states from 1994 to 2014, even after adjusting for inflation. However, the magnitude of change varies widely. The map below presents the percent change in PIT collections for states between 1994 and 2014 in inflation-adjusted dollars.
In real terms, California’s PIT collections have grown the most—over 143 percent—and Connecticut and North Dakota have also more than doubled their PIT collections over the 20 years. On the other hand, Indiana and Ohio have experienced just two and three percent growth in PIT collections in real dollars, respectively. Hawaii and Michigan have also realized less than 15 percent growth in their PIT collections. Changes in state personal income tax collections are a result of numerous factors. Policy changes in the structure, rates, and base of PIT laws have affected collections. So too have relative population growth rates and evolution in state economic environments.