August 7, 2008
Minnesota's State and Local Tax Burden, 1977-2008
About Tax Burden Data
People often ask how Tax Foundation rankings of state-local tax burdens compare to Census data, which include two popular state-by-state rankings. One of these popular Census tables covers only state-level taxes (click here to view tables). Local taxes are excluded, such as property taxes and local sales taxes. This exclusion allows Census to report up-to-date state-level collections, which would be impossible if Census waited for the time-consuming tally of tax collections by thousands of local governments. However, some states accomplish at the local level what other states accomplish at the state level, so a degree of comparability is lost as a result. For example, New York's state sales tax rate is 4 percent, and its counties have local sales tax rates that range from 3 percent to 5.75 percent. Connecticut, on the other had, has a 6 percent state-level sales tax with no local add-ons. In a ranking that includes only state-level taxes, New York appears less taxed than it actually is, and Connecticut appears more taxed. Census also ranks combined state-local tax collections after it has amassed the local data (click here to view tables). This is closer to the Tax Foundation rankings, which take the additional steps of projecting collections into the current year, counting out-of-state tax payments in the state of residence instead of the state of collection, and dividing total tax payments by total income to calculate the "tax burden."
For further explanation of the data in these charts, see this study.
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