Minnesota
Our ranking: Least tax-friendly
State income tax: 5.35% (on less than $25,890 of taxable income for single filers and on less than $37,850 for joint filers) — 9.85% (on more than $160,020 of taxable income for single filers and on more than $266,700 for joint filers)
Average state and local sales taxes: 7.43%
Gas taxes and fees: 29 cents per gallon
Minnesota hits hard with income tax. It added a new top income tax rate of 9.85% in 2013. But what makes the North Star State really stand out is that its lowest income tax rate is 5.35%. And thanks to the federal tax overhaul, it could get worse.
Minnesota uses federal taxable income as the starting point for calculating state taxes. An estimated 300,000 Minnesotans will pay higher state taxes due to the loss of personal and dependent exemptions on their federal tax returns. Property taxes are on the high side, too.
