In 12 states, a city, county or school district can levy its own income tax on top of the state one. It rarely appears in a state-versus-state comparison, because it is not a state-level number, and it can be the difference between a move looking worthwhile and not. The states are Alabama, Delaware, Indiana, Iowa, Kentucky, Maryland, Michigan, Missouri, New York, Ohio, Oregon and Pennsylvania.
- A local income tax is levied by a city, county or school district, so two people in the same state can pay very different total rates.
- It is almost never in a state comparison, including most of the ones online, because there is no single statewide figure to quote.
- In Indiana and Maryland every county levies one, so effectively every resident pays. That is different from a tax a few cities happen to have.
- Some are levied where you WORK rather than where you live, so a move that does not change your job may not change the bill.
Why it goes missing
Every comparison of two states has to quote a single number per state, and a local income tax does not have one. In most of these states it applies in particular municipalities rather than everywhere, so the honest statewide answer is “it depends where exactly you live”, which is not a number a table can hold.
The result is that it drops out of the comparison entirely, and people discover it after they have moved. On a mid-range income it is usually a modest annual figure, but it lands on the same side of the ledger as the saving somebody moved for.
Where you live, or where you work
This is the part that most often surprises people. Some local income taxes follow residence and some follow the place of employment, and a few states operate both at once with a credit between them.
The practical consequence: moving across a municipal boundary without changing jobs can change what you owe, and changing jobs without moving can do the same. If you are moving within one of these states, it is worth checking which rule applies before assuming a short move is tax-neutral.
Universal, widespread, or one city
These 12 are not the same problem, and the difference decides how much attention to give it. In two of them there is no avoiding it at all:
Indiana. EVERY county levies an income tax, so almost every resident pays one.
Maryland. EVERY county and Baltimore City levies one, currently about 2.25% to 3.20%. Effectively universal.
Then there are the fragmented ones, where it depends entirely on the address and the number of jurisdictions makes a general answer impossible:
Pennsylvania. Nearly 2,900 jurisdictions levy an earned income tax; Philadelphia is about 3.87%.
Ohio. Around 600 municipalities and many school districts levy one, commonly 1% to 3%. Township residents may pay none.
And the rest confine it to specific places, which makes them far easier to plan around because the question becomes a yes or no about one city:
Missouri. Kansas City and St. Louis levy a 1% earnings tax; nowhere else does. Delaware. Wilmington levies a 1.25% wage tax; the rest of the state has none. New York. New York City residents pay roughly 3.1% to 3.9%; Yonkers adds a surcharge. The rest of the state has none.
How to check it before you commit
Once you have narrowed to an actual municipality rather than a state, the local rate is usually published by the city or county and is straightforward to find. That is the point at which to look. A state-level comparison cannot answer it, and no calculator that works at state level can either.
If you are comparing two places and one is in a state on the list above, treat the state figure as a floor rather than an answer. It is the number before the municipality has had its turn.
One thing this cannot tell you
The figures on this site are state-level, so they carry state income tax and not local income tax. That is a deliberate limit rather than an oversight: there is no single local rate for a state, and inventing an average would be worse than leaving it out and saying so.