States With Local Income Taxes

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State income taxes can take a pretty significant bite out of your paycheck. If you live in certain states, you could lose another chunk of your hard-earned cash to your city, county, or school district. Roughly one-third of states allow municipalities, counties, school districts, and special districts to impose additional local income taxes.

Some localities call them different names, such as earnings taxes or wage taxes, and some have much higher rates than others.

Key Takeaways

• About a third of all states allow their counties, municipalities, and other local jurisdictions to impose an income tax.
• Tax rates are often lower than at the federal or state levels.
• Not all states have a local tax in every jurisdiction. Only five cities in Colorado impose the tax, while Iowa has hundreds of school districts that levy income taxes.
• Most jurisdictions tax nonresidents who work there at a lower rate. Kansas doesn’t tax nonresidents at all.

Alabama

Alabama has four local taxing jurisdictions: three cities and one county. Two cities, Bessemer and Birmingham, levy an income tax of 1%. Gadsden's rate is 2%. Macon County imposes a 1% tax as well. The tax is imposed on both residents and nonresidents who work in these locations.

Colorado

Five Colorado cities impose an income tax as a flat dollar amount on compensation earned by both residents and non-residents. It's called an occupational privilege tax and is charged to employees who work within city limits. (Employers also pay the tax, but that amount may be different from the tax owed by the employee.)

• Aurora: $2 per month for employers and employees who work within the city limits
• Denver: $5.75 per month
• Glendale: $5 per month
• Greenwood Village: $2 per month
• Sheridan: $3 per month

Delaware

Only Wilmington levies a local income tax in this state. It's a flat 1.25% on earned income. It's the same rate for residents and non-residents.

Indiana

All 92 counties in Indiana have an individual income tax, ranging from 1% in several counties to 2.864% in Jasper County.

Allen County, the largest county, levies an income tax at 1.59%, Clinton County at 2.65%, Fountain County at 2.1%, LaGrange County at 1.65%, Marion County at 2.02%, and Sullivan County at 1.7% as of September 2024.

Iowa

Iowa is home to more than 280 local taxing jurisdictions. All but one of them are school districts. They each impose an income tax surcharge ranging from 1% to 20% of state income tax you pay (not 20% of your income).

Kansas

There are 484 local taxing jurisdictions in Kansas, including counties, cities, and townships. Rates range from 0.13% to 5.75%.

Kentucky

Most of Kentucky's jurisdictions impose income taxes. Rates range from 0.01% in Elsmere, Hart County, and Spencer County to 2.5% in Bellevue, Covington, Newport, and Southgate as of 2024.

Maryland

All 23 Maryland counties levy income taxes on both residents and nonresidents. Tax rates range from 2.25% to 3.20%. The city of Baltimore also has an income tax of 3.20%.

Michigan

Several Michigan cities imposed income taxes on residents at a rate of 1.0%. Non-residents pay 0.5%. Four cities levy higher rates, however:

• Detroit: 2.4% on residents, 1.2% on nonresidents
• Grand Rapids: 1.5% on residents, 0.75% on nonresidents
• Highland Park: 2.0% on residents, 1.0% on nonresidents
• Saginaw: 1.5% on residents, 0.75% on nonresidents

Missouri

Kansas City and St. Louis have an income tax of 1%. They call it an "earnings tax." Both cities charge nonresidents the same rate.

New Jersey

The city of Newark imposes a flat 1% tax on earned income in addition to the state income tax. The same rate applies to both residents of the city and to nonresidents who work there.

New York

Yonkers and New York City both have individual income taxes. New York City's income tax rates ranged from 3.078% to 3.876% in 2024. But the city doesn't impose the tax on nonresidents. The Yonkers tax is equal to 16.75% of a resident's state tax.

Ohio

There are 418 municipalities in Ohio. A few don't charge any income taxes. The vast majority charge between 0.50% and 3%.

Oregon

The greater Portland area (Metro) imposes a 1% personal income tax for individuals with Metro taxable income over $125,000 ($200,000 if married filing jointly). Multnomah County has a 1.5% tax on those same income groups, with an additional 1.5% tax on Multnomah income over $250,000 or $400,000 for joint filers.

The Lane County Transit District, which includes Eugene, assesses a tax on earned income of 0.01% on residents and nonresidents alike.

Pennsylvania

Most municipalities in Pennsylvania assess a tax on wages called the Earned Income Tax. Rates for residents range from a low of 1% up to 3.79% in Philadelphia, 3.6% in Reading, 3.4% in Scranton, and 3% in Pittsburgh and Wilkes-Barre. Nonresidents are subject to lesser rates in most cities that tax at over 1%.

West Virginia

West Virginia has four taxing jurisdictions. They charge a flat dollar rate, not a percentage:

• Charleston: $6 per pay period
• Huntington: $10 per pay period
• Parkersburg: $5 per pay period
• Weirton: $2 per week

Note

Those who are paid weekly in these areas suffer the greatest burden: $1,040 a year in Huntington. Someone who is paid monthly in Charleston would pay $72. The rates are the same for both residents and nonresidents.

Frequently Asked Questions (FAQs)

Do you pay local taxes where you live or where you work?

You typically have to pay both. Some municipalities have a lower tax rate for nonresidents. Some jurisdictions may offer a credit for taxes paid to another locality. Contact your local tax authority to find out more about paying taxes in your city.

What states have no income tax?

Nine states have no tax on earned income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire does tax interest and dividend income, however, and Washington taxes the capital gains and income of people with high incomes.

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

1. Tax-Rates.org. "Bessemer, Alabama Local Income Tax."
2. City of Aurora. "Occupational Privilege Tax."
3. City of Denver. "Business Taxes." Occupational Privilege Tax dropdown menu.
4. City of Glendale, Colorado. "Occupational Privilege Tax."
5. Greenwood Village, Colorado. "Occupational Privilege Tax."
6. Sheridan, Colorado. "Occupational Privilege Tax."
7. New Castle County Delaware. "City of Wilmington Wage Tax Information."
8. Indiana Department of Revenue. "Departmental Notice #1," Page 4.
9. Tax Foundation. "Local Income Taxes in 2019."
10. Overland Park Chamber of Commerce. "Taxes."
11. New York State. "Yonkers Withholding Tax Tables."
12. Tax-Rates.org. "Kentucky Local Income Taxes."
13. Comptroller of Maryland. "Maryland Income Tax Rates and Brackets."
14. Michigan Dept. of Treasury. "What Cities Impose an Income Tax?"
15. Michigan Department of Treasury - City Tax Administration. "2022 City of Detroit Income Tax Withholding Guide." Page 1.
16. Tax-Rates.org. "2022 Grand Rapids, Michigan Local Income Tax."
17. City of Highland Park. "Income Tax."
18. StLouis-Mo.gov. "Individual Earnings Tax Information."
19. Kansas City, Missouri. "Have You Paid Your KCMO Earnings Tax (E-Tax)?"
20. Tax-Rates.org. "Newark, New Jersey Local Income Tax."
21. Regional Income Tax Agency. "Tax Rates Table."
22. Portland.gov. "Personal Income Tax Filing and Payment Information."
23. Tax-Rates.org. "Lane County Mass Transit District, Oregon Local Income Tax."
24. USDA National Finance Center. "Taxes 22-25, Pennsylvania (Local) Income Tax Withholding."
25. USDA. "TAXES 18-17, West Virginia Cities (Local) Income Tax Withholding."
26. City of Cincinnati. "Income Taxes."
27. Tax Foundation. "State Individual Income Tax Rates and Brackets for 2024."

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