An organization that examines state and local taxes on income, sales, property and gas has deemed Iowa one of the least tax-friendly states in the nation.
Kiplinger’s 2019 Tax Map placed the Hawkeye State ninth on its list, with its neighbor, Illinois, taking the top spot.
“Which do you think is higher in Iowa: the corn or taxes?” Kiplinger’s report on Iowa asks. “It might be taxes, thanks to above average income and property taxes in the state.”
According to Kiplinger, Iowa has the 12th highest average property taxes in the nation with residents paying an average of $1,678 in taxes per $100,000 of assessed home value.
Iowa has a progressive income tax structure with the highest rate of 8.53 percent on taxable income over $73,710. But many school districts also levy an income tax.
“One reason why income taxes are on the high end in the state is because over 200 school districts and Appanoose County add their own income taxes on top of the state-level tax,” Kiplinger says.
Iowa’s gas tax also is on the higher end at 30.5 cents per gallon.
In addition to Illinois and Iowa, other Midwest states that ranked poorly were Ohio, Wisconsin, Kansas and Nebraska.
North Dakota and South Dakota are the only Midwestern states to rank as “tax friendly” by Kiplinger. The organization bestowed the most tax friendly distinction to Wyoming.
The release of its study comes nearly a month after Chicago-based non-partisan think tank Truth in Accounting determined Iowa has enough money to pay all of state government’s bills.
TIA gave the state a B grade for possessing $9.3 billion in available assets against $8.5 billion in bills.