State income tax: 1.4% (on income of up to $2,400/individual, $4,800/joint) – 8.25% (on income of more than $48,000/individual, $96,000/joint)
Effective income tax rate: 6.5%/individual, 7.1%/joint
Average state and local sales tax: 4.35%
Gas taxes and fees: 44 cents per gallon (varies by county)
Hawaii has the highest effective income tax rate of all 50 states (only Washington, D.C., has a higher rate). A married couple with taxable income of $150,000 a year, two children, $5,000 in dividend income and mortgage interest of $10,000 would pay more than $9,300 a year in state income taxes. A single resident with $45,000 in earned income would pay more than $2,700.
Hawaii’s average combined state and local sales tax rate is 4.35%, among the lowest in the U.S. However, that’s misleading because few purchases, other than prescription drugs, are exempt from tax. Vehicles are subject to a 4% sales tax (technically an excise tax levied on businesses), even if they’re purchased on the mainland.
While property values are high, property taxes as a percentage of home value are the lowest in the U.S. The property tax on the state’s median home value of $528,000 is $1,401, according to the Tax Foundation.
Source: Kiplinger
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