California, Texas, and New York collect the most tax revenue overall
The three states that collect the most total tax revenue are California, Texas, and New York, in that order. California brings in roughly $300 billion annually across all tax types combined. Texas follows with around $250 billion, and New York with approximately $200 billion. These numbers shift year to year based on economic growth, population changes, and policy decisions, but the ranking has remained stable for the past decade.
Total tax revenue is not the same as tax burden on residents. A state can collect enormous amounts of money straightforward because it has a large population and strong economy, not because it taxes heavily. California's total is high partly because it has 39 million residents and a tech-heavy economy. Texas collects less per person than many smaller states, even though its total is second in the nation.
What matters to you depends on what you are trying to understand. If you want to know whether your state taxes you heavily compared to your income, you need to look at effective tax rate — the percentage of income that goes to state and local taxes. If you want to know which states fund the most public services, total revenue is the right number. This article focuses on total collection.
Key Takeaways
- California, Texas, and New York collect more total tax revenue than any other states, but this reflects their size and economic output, not necessarily their tax rates.
- Total tax revenue includes income tax, sales tax, property tax, corporate tax, and excise taxes combined.
- States with smaller populations but higher tax rates per person may collect less total revenue than larger states with lower rates.
- Tax revenue varies year to year based on economic conditions, so rankings can shift during recessions or booms.
How the top ten states rank by total tax collection
After California, Texas, and New York, the next tier includes Florida, Illinois, Pennsylvania, Ohio, Georgia, North Carolina, and Michigan. Florida and Illinois each collect roughly $150 billion annually. Pennsylvania, Ohio, and Georgia each collect between $100 billion and $130 billion. The exact order shifts slightly depending on the year and which taxes are counted, but these ten states consistently account for more than half of all state tax revenue in the country.
Population size is the strongest predictor of total tax revenue. States with more people generate more income tax, more sales tax, and more property tax straightforward because there are more taxpayers. Texas ranks second despite having a lower income tax burden than many states because it has 30 million residents and a large economy. Wyoming, by contrast, collects only about $4 billion in total tax revenue, partly because it has fewer than 600,000 residents.
Why total tax revenue does not tell you about your own tax burden
A state that collects $300 billion in taxes might still have a lower tax rate than a state that collects $50 billion. The difference is population and income. If California has 39 million residents and collects $300 billion, that is roughly $7,700 per person. If a smaller state has 2 million residents and collects $20 billion, that is $10,000 per person — a higher burden even though the total is much smaller.
Your actual tax burden depends on your income, where you live within the state, and what you own. A high-income earner in California pays more in state income tax than a low-income earner in Texas, but a retiree with no income in California might pay less overall than a working person in Texas who pays high property taxes. Total state revenue tells you nothing about your situation.
What types of taxes make up the total
State tax revenue comes from five main sources: income tax, sales tax, property tax, corporate tax, and excise taxes (taxes on specific goods like gasoline, alcohol, and cigarettes). The mix varies by state. Some states have no income tax but high sales tax. Others rely heavily on property tax. A few have no sales tax but steep income tax.
Income tax is usually the largest source for states that have it. Sales tax is the second-largest source overall. Property tax is collected by local governments but often counted in state totals. Corporate tax varies widely — some states have none, others tax corporate profits heavily. Excise taxes are typically the smallest piece but still add up across millions of transactions.
When comparing states, it matters which taxes you count. Some reports include only state-level taxes. Others add local taxes on top. This can change the ranking. A state with high state income tax but low local property tax might rank differently than one with low state income tax but high local property tax.
How economic conditions affect total tax revenue year to year
Tax revenue rises and falls with the economy. During a recession, income tax drops because people earn less. Sales tax drops because people spend less. Property tax may hold steady or drop if property values fall. During an economic boom, all three rise. This is why the rankings can shift from year to year, especially for states near the top.
The 2020 pandemic recession caused most states to see a dip in revenue, but recovery was uneven. States with large service sectors (tourism, hospitality, entertainment) recovered more slowly than states with tech or finance sectors. By 2022, most states had recovered and exceeded pre-pandemic revenue levels. Texas and Florida, which have no state income tax, saw larger swings in sales tax revenue during the downturn than states with more stable income tax bases.
States with no income tax still collect substantial revenue
Nine states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only investment income). Despite this, Texas and Florida still rank in the top three for total revenue because they have large populations and high sales tax and property tax revenue. Alaska and Wyoming collect far less total revenue because they have small populations, though they may have high per-capita revenue from oil and mineral taxes.
No income tax does not mean low total taxes. Washington state, which has no income tax, collects more total revenue than many states with income tax, because it has a large population and high sales tax. New Hampshire, with no broad income tax, still collects substantial revenue from property tax and business taxes. The absence of one tax type is usually offset by higher rates on other types.
How tax policy changes affect total revenue
When a state raises or lowers tax rates, total revenue changes, but not always in the direction expected. Raising the income tax rate might bring in more revenue, or it might cause high earners to move out of state, reducing revenue. Lowering sales tax might increase spending and actually increase total sales tax revenue, or it might straightforward reduce revenue. The relationship between tax rate and tax revenue is complex and depends on how people and businesses respond.
States also change which taxes they rely on. Some have shifted away from income tax toward sales tax or property tax. Others have raised corporate tax or created new excise taxes on specific industries. These shifts change the total revenue and the distribution of the tax burden, but they do not always change the total amount collected. A state might collect the same $100 billion through a different mix of taxes.
Frequently Asked Questions
Does the state that collects the most taxes have the highest tax rate?
No. California collects the most total revenue but does not have the highest tax rate per person. New Jersey, Maryland, and Connecticut all have higher effective tax rates (the percentage of income that goes to taxes) than California, even though they collect less total revenue. Total revenue reflects population and economy size, not tax burden.
Why does Texas rank so high if it has no state income tax?
Texas has 30 million residents and a large economy, so even without income tax, its sales tax and property tax generate enormous revenue. The state also collects substantial revenue from business taxes and oil and gas taxes. Population and economic output matter more than tax rate when calculating total revenue.
Do these numbers include local taxes?
It depends on the source. Some reports count only state-level taxes. Others include local property taxes, local sales taxes, and local income taxes (where they exist). This can change the ranking. Always check whether a source includes local taxes before comparing states.
How often do the rankings change?
The top three (California, Texas, New York) have remained stable for at least a decade. The order of states four through ten can shift year to year based on economic growth and policy changes. During recessions, the rankings may shift more dramatically.
What is the difference between total tax revenue and per-capita tax revenue?
Total tax revenue is the sum of all taxes collected in a state. Per-capita revenue is the total divided by the population. A large state with a small population might have high per-capita revenue but low total revenue. Wyoming has high per-capita revenue from oil taxes but low total revenue because it has few residents.