Posted on: Thursday, April 28, 2005

State's tax bite is largest in the U.S.

Associated Press

Hawai'i has the highest per-capita state tax collection in the nation, according to figures released by the Census Bureau yesterday.

Tax collections by state governments grew more than 8 percent to $593 billion in the last fiscal year, the Census Bureau said.

The data from the 2004 Annual Survey of State Government Tax Collections found that nationally per-capita taxes collected by states averaged $2,024.

Hawai'i had the highest per-capita taxes collected, $3,048, followed by Wyoming, $2,968; Connecticut, $2,937; Minnesota, $2,889; and Delaware, $2,862.

The state with the lowest per-capita tax collections was Texas, which collected less than half Hawai'i's amount, $1,357 per capita.

One of the reasons Hawai'i's per-capita tax take is high is because Hawai'i is the only state that funds public education. In other states, schools are funded by local property taxes.

"It's kind of like looking at apples and oranges," said Linn Garcia, a tax specialist with the state Department of Taxation.

State Tax Director Kurt Kawafuchi yesterday said he believes Hawai'i has a high tax rate.

"That's why we're trying to give something back to the struggling families through the tax cut, increasing the standard deduction," he said, referring to administration proposals for tax relief.