States that collect the most property tax revenue

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Despite the worst fears of many economic experts at the start of the COVID-19 pandemic, state and local government budgets have shown resilience over the past two years. With much of the economy shut down or hampered as a result of the pandemic, forecasters initially feared that states and localities would collect significantly lower amounts of sales and income taxes and face large budget deficits as a result. But behind falling unemployment, rising wages and strong consumer spending, income and sales taxes have produced stronger-than-expected revenues since the initial shock of the pandemic.

One factor that has helped to protect state and particularly local government revenues during this period is the property tax, which is a tax levied on immovable property such as land and buildings or some forms of personal property. Property taxes tend to be more stable over time because property values are less sensitive to economic volatility than income tax and sales tax. Depending on when taxes are assessed, it can take years for significant changes in property values to become apparent in a government’s tax collections. This has certainly helped keep property tax revenues stable during the pandemic – and for some communities, collections could potentially increase in the coming years due to soaring residential real estate values.

Property tax stability could help continue to protect state and local budgets if the United States heads into a recession in the near future. Property tax collections represent 16.6% of general state and local tax revenue, making it the largest form of “own-source” revenue generated by states and localities, ahead of personal income (12 .9%) and general sales taxes (12.5%). And of all revenue sources, property tax trails only intergovernmental funds (22%), which includes funds transferred from one government to another (most often federal to state or local) by the through grants, loans and other agreements.

However, the overall mix of state and local revenue sources looks different across the United States. Each state and local government offers a unique collection of income sources that weight income, sales, property, and other taxes differently. For example, nine states have no state income tax, while five have no state sales tax. Others have caps on property tax rates or restrictions on how property assessments are conducted, which limit the amount of property tax revenue. This means that individuals’ specific tax burdens will be different depending on the state and local tax laws where they live.

Property tax collections across states show these differences in action. At the low end, only 6.9% of general tax revenue collected in Alabama comes from property tax, while at the high end, property tax accounts for 36.5% of New York’s general tax revenue. Hampshire. New Hampshire is unique in part because the state has no revenue or sales tax, so many services are funded locally through property taxes. Many other places heavily dependent on property taxes are near northeastern states, including New Jersey, Maine, and Connecticut.

The data used in this analysis comes from the US Census Bureau 2019 Annual Survey of State and Local Finances. To determine which states collect the most property tax revenue, the Porch researchers calculated property tax revenue as a share of total general tax revenue. In the event of a tie, the state with the greatest annual property tax revenue per capita was ranked higher.

Here are the states that collect the most property tax revenue.

States that collect the most property tax revenue

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15.Montana

Property tax as a percentage of total general tax revenue: 18.0%
Annual property tax revenue (per capita): $1,717
Annual property tax revenue (total): $1,835,479,000
Annual general tax revenue (total): $10,222,926,000

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14. Virginia

Property tax as a percentage of total general tax revenue: 18.0%
Annual property tax revenue (per capita): $1,770
Annual property tax revenue (total): $15,109,680,000
Annual general tax revenue (total): $83,725,329,000

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13. Florida

Property tax as a percentage of total general tax revenue: 18.1%
Annual property tax revenue (per capita): $1,454
Annual property tax revenue (total): $31,227,441,000
Annual general tax revenue (total): $172,783,607,000

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12. South Dakota

Property tax as a percentage of total general tax revenue: 18.8%
Annual property tax revenue (per capita): $1,532
Annual property tax revenue (total): $1,355,624,000
Annual general tax revenue (total): $7,205,443,000

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11. New York

Property tax as a percentage of total general tax revenue: 18.9%
Annual property tax revenue (per capita): $3,180
Annual property tax revenue (total): $61,857,624,000
Annual general tax revenue (total): $327,909,409,000

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10. Nebraska

Property tax as a percentage of total general tax revenue: 20.4%
Annual property tax revenue (per capita): $2,013
Annual property tax revenue (total): $3,893,168,000
Annual general tax revenue (total): $19,086,993,000

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9.Massachusetts

Property tax as a percentage of total general tax revenue: 20.8%
Annual property tax revenue (per capita): $2,590
Annual property tax revenue (total): $17,854,301,000
Annual general tax revenue (total): $85,813,381,000

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8. Rhode Island

Property tax as a percentage of total general tax revenue: 22.0%
Annual property tax revenue (per capita): $2,526
Annual property tax revenue (total): $2,676,164,000
Annual general tax revenue (total): $12,180,352,000

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7.Illinois

Property tax as a percentage of total general tax revenue: 23.1%
Annual property tax revenue (per capita): $2,338
Annual property tax revenue (total): $29,632,145,000
Annual general tax revenue (total): $128,418,079,000

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6. Vermont

Property tax as a percentage of total general tax revenue: 23.9%
Annual property tax revenue (per capita): $2,938
Annual property tax revenue (total): $1,833,211,000
Annual general tax revenue (total): $7,665,670,000

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5.Texas

Property tax as a percentage of total general tax revenue: 24.0%
Annual property tax revenue (per capita): $2,098
Annual property tax revenue (total): $60,826,579,000
Annual general tax revenue (total): $253,819,166,000

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4.Connecticut

Property tax as a percentage of total general tax revenue: 25.8%
Annual property tax revenue (per capita): $3,215
Annual property tax revenue (total): $11,463,831,000
Annual general tax revenue (total): $44,454,140,000

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3. Maine

Property tax as a percentage of total general tax revenue: 26.8%
Annual property tax revenue (per capita): $2,772
Annual property tax revenue (total): $3,726,532,000
Annual general tax revenue (total): $13,903,942,000

Photo credit: Sean Pavone/Shutterstock

2. New Jersey

Property tax as a percentage of total general tax revenue: 28.7%
Annual property tax revenue (per capita): $3,513
Annual property tax revenue (total): $31,200,180,000
Annual general tax revenue (total): $108,751,702,000

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1.New Hampshire

Property tax as a percentage of total general tax revenue: 36.5%
Annual property tax revenue (per capita): $3,246
Annual property tax revenue (total): $4,413,670,000
Annual general tax revenue (total): $12,099,243,000

States that collect the most property tax revenue