In addition to their federal tax liability, another thing that can have major financial implications for a person is what kind of state and local tax liability they have. States vary considerably in what level of taxes they place on their residents.
A recent WalletHub report compared the tax rates of the different states. The study looked at the state and local income, real estate, vehicle property and sales/excise tax rates in each state and applied them to the median U.S. household to come up with that state’s effective tax rate. It then ranked the states based on who had the lowest rate.
Where did Missouri end up in these rankings? It was in the middle of the pack. The report found that the state had an effective tax rate of 11.02 percent, giving it the 29th lowest rate in the country. In comparison, the highest state/local tax rate in the country was 14.76 percent (Illinois’) and the lowest was 5.64 percent (Alaska’s).
Just as taxpayers sometimes run into tax debt issues when it comes to federal taxes, they can sometimes end up facing such issues when it comes to state and local taxes. When a Missouri taxpayer has a state tax debt, it can be important for them to understand what steps they can take to respond to their tax situation. How such a situation is dealt with can have considerable ramifications. So, when facing claims of owing back taxes from the Missouri Department of Revenue, a taxpayer may want to ask a skilled Missouri tax attorney about what options they have.