New Jersey
Our ranking: Least tax-friendly
State income tax: 1.4% (on up to $20,000 of taxable income) — 8.97% (on taxable income over $500,000)
Average state and local sales taxes: 6.97%
Gas taxes and fees: 41 cents per gallon
Income tax rates for Garden State residents are relatively low compared with some other tax-unfriendly states. But while New Jersey gives residents a break on income taxes, it brings the hammer down when they buy a home. New Jersey’s property taxes are the highest in the U.S. The property tax on the state’s median home value of $316,400 is $7,601.
Average property taxes exceed $10,000 in Bergen, Essex, Union and Morris counties, so residents in those heavily-populated areas will be affected by the $10,000 cap on the federal tax deduction for state and local taxes. Fuel taxes, once a bright spot for residents and turnpike travelers alike, were recently hiked and are now near the top for the country.
