Property taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es vary substantially around the United States, both among states and even within states. Property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es are levied at the state and local level, but they are also typically deductible on federal returns as an itemized deductionItemized deductions allow individuals to subtract designated expenses from their taxable income and can be claimed in lieu of the standard deduction. Itemized deductions include those for state and local taxes, charitable contributions, and mortgage interest. An estimated 13.7 percent of filers itemized in 2019, most being high-income taxpayers. on Schedule A for taxpayers who elect to itemize their deductions.
As a result, the IRS has substantial data on property taxes around the country. The map below shows the average property tax deductionA tax deduction is a provision that reduces taxable income. A standard deduction is a single deduction at a fixed amount. Itemized deductions are popular among higher-income taxpayers who often have significant deductible expenses, such as state/local taxes paid, mortgage interest, and charitable contributions. taken on the Schedule A, per tax return, for each county in the United States.
While this is not exactly equivalent to the average property tax collections at the state level (which are higher because some taxpayers don’t itemize) the map shows a pretty good, broad, apples-to-apples comparison of property taxes across the country.
Looking at the map, some obvious things stand out. For example, the border between Pennsylvania and New York stands out; this should come as no surprise to readers of our State Business Tax Climate Index, which puts New York fourth overall in property tax collections per capita. The most heavily-shaded state is New Jersey, which has the highest property tax collections per capita. And lastly, even within states, property taxes can vary a great deal from county to county. For example, they vary a great deal within Illinois, as we pointed out in our latest study of taxes in the state.