Tax season invariably brings a wave of stress for millions of Americans as they grapple with their obligations to Uncle Sam.

While federal income taxes are a universal burden, the landscape of state and local taxes presents a more varied picture across the nation.

Varied Tax Burdens Across the Nation

Every year, the average U.S. household shells out nearly $11,000 in federal income taxes alone.

However, when it comes to state and local taxes, the differences are stark.

Taxpayers residing in the most tax-expensive states shoulder a burden more than twice that of their counterparts in the cheapest states.

The Myth of Low Income Taxes

Contrary to popular belief, low-income taxes don’t always equate to low overall tax burdens.

Take, for instance, the state of Washington, where citizens are exempt from income tax yet end up allocating over 8% of their annual income toward sales and excise taxes.

Similarly, Texas residents enjoy a tax-free income but bear the brunt of real estate taxes, accounting for 1.63% of their income, one of the highest rates nationwide.

WalletHub’s Analysis

As the April 15 tax-filing deadline approaches, WalletHub conducted a comprehensive comparison of the 50 states and the District of Columbia to uncover where taxpayers face the least and most burdensome tax regimes.

By calculating relative income-tax obligations using effective income-tax rates in each state and locality against the average American’s income, a clearer picture emerges.

A Closer Look at Montana's Tax Landscape

Overall Rank: 5th
- Montana ranks 5th in terms of overall effective state and local tax rate, positioning it favorably compared to its counterparts.
Real-Estate Tax: 22nd
- The state's real-estate tax ranks 22nd nationally, indicating a moderate burden on property owners.
Vehicle Property Tax: 33rd
- With a ranking of 33rd in vehicle property tax, Montana residents find themselves in the middle of the pack concerning this particular tax category.
Sales & Excise Taxes: 1st
- Montana clinches the top spot in sales and excise taxes, suggesting a relatively high burden in this area compared to other states.