Income tax in the United States can be divided into federal income tax and state income tax. The federal income tax is the same for residents in every state, with a top rate of 35 percent for people in the highest income bracket. In addition to this federal tax, the residents of some states are required to pay an additional state income tax, the rate of which is determined by the state. This means that the overall amount of income tax that is paid varies between states.

The highest state income taxes are raised by Hawaii and Oregon, which both have maximum rates of 11 percent. The lowest maximum rate of state income tax is in Illinois, where the tax is levied at a flat rate of just 3 percent. State income tax can sometimes be counted as a deductible against federal taxes.

The majority of states implement progressive rates of income tax, which means that the rate at which the state income tax that has to be paid rises as incomes grow higher. People who earn more money are required to pay a higher rate of income tax. This is the same method for determining income tax rates as is used for federal income tax.

Income tax rates in most states will therefore depend upon the size of the taxpayer's income. The lower your income, the lower the rate. The rates vary between 2 and 5 percent in Alabama, 2.59 and 4.54 percent in Arizona, 1 and 7 percent in Arkansas, 1.25 and 10.55 percent in California, 3 and 5 percent in Connecticut, 2.20 and 6.95 percent in Delaware, 1 and 6 percent in Georgia, 1.4 and 11 percent in Hawaii, 1.6 and 7.8 percent in Idaho, 0.36 and 8.98 percent in Iowa, 3.5 and 6.45 percent in Kansas, 2 and 6 percent in Kentucky, 2 and 6 percent in Louisiana, 2 and 8.5 percent in Maine, 2 and 6.25 percent in Maryland, 5.35 and 7.85 percent in Minnesota, 3 and 5 percent in Mississippi, 1.5 and 6 percent in Missouri, 1 and 6.9 percent in Montana, 2.56 and 6.84 percent in Nebraska, 1.4 and 10.75 percent in New Jersey, 4 and 6.85 percent in New York, 6 and 7.75 percent in North Carolina, 1.84 and 4.86 percent in North Dakota, 1.174 and 5.925 percent in Ohi0, 0.5 and 5.5 percent in Oklahoma, 5 and 9 percent in Oregon, 3.75 and 9.9 percent in Rhode Island, 0 and 7 percent in South Carolina, 3.55 and 9.4 percent in Vermont, 2 and 5.75 percent in Virginia, 3 and 6.5 percent in West Virginia, 4.6 and 7.75 percent in Wisconsin and 4 and 8.5 percent in the District of Columbia.

Some states implement a flat rate of state income tax rather than one that rises with income. The flat rates for personal income tax are 4.63 percent in Colorado, 3 percent in Illinois, 3.4 percent in Indiana, 5.3 percent in Massachusetts, 4.35 percent in Michigan, 3.07 percent in Pennsylvania and 5 percent in Utah.

In some parts of the country, people are required to pay an additional income tax on top of the federal and state taxes. New York City is one example of such a place. Residents of New York have to pay federal, state and city income taxes.

There are seven states that do not implement a state income tax. These states are Wyoming, Washington, Texas, South Dakota, Nevada, Florida and Alaska. In Tennessee and New Hampshire, state income tax is limited to interest income and dividends. The states that do not rely on income tax for revenue must raise funds through other means. They usually use higher sales taxes to generate revenue.

If you would like to find out more about the tax system in the United States, then you should spend some time reading the advice on the Net4Tax.com website.