U.S. Cities That Levy Income (Earnings) Taxes
Compare St. Louis's low 1 percent rate to other major cities that impose an earnings tax.
Fourteen states and the District of Columbia allow cities, counties and municipalities to levy their own separate individual income taxes in addition to state income taxes.
Alabama: Birmingham levies an income tax of 1 percent.
Arkansas: Seven Arkansas school districts assess an income tax surcharge equal to 10 percent of state income tax before tax credits. They are Berryville, Green Forest, Westside, Hope, Huntsville, Waldron and Marshall.
Colorado: Three cities impose flat taxes on compensation. Aurora charges $2 a month on compensation over $250, Denver charges $5.75 a month on compensation over $500, and Greenwood Village charges $4 a month on compensation over $250.
District of Columbia: D.C. has a bracketed income tax system. The rates are 4 percent for the first $10,000 of income, 6 percent for $10,000 to $40,000 of income, and 8.5 percent for income over $40,000.
Delaware: Wilmington has a flat 1.25 percent tax on income.
Iowa: 666 school districts impose an income tax surcharge ranging from 1 percent to 20 percent of state income tax owed.
Indiana: All 92 counties in Indiana have an individual income tax. Tax rates are in the process of being changed and will be announced on the Indiana Department of Revenue's website once they are finalized.
Kentucky: Eight cities in Kentucky levy income taxes on residents and nonresidents. They are Bowling Green (1.85 percent), Covington (2.5 percent), Florence (2 percent), Lexington-Fayette (2.25 percent), Louisville (2.20 percent for residents and 1.45 percent for nonresidents), Owensboro (1.33 percent), Paducah (2 percent) and Richmond (2 percent). Lexington-Fayette Urban County Government and Louisville – Jefferson County also impose taxes on businesses.
Maryland: All 24 Maryland counties levy income taxes on residents and nonresidents. Tax rates range from 1.25 percent to 3.20 percent. Baltimore also has an income tax of 3.05 percent.
Michigan: Several Michigan cities impose income taxes with rates ranging from 0.50 percent to 2.50 percent. Detroit's income tax rate is 2.50 percent for residents and 1.25 percent for nonresidents.
Missouri: Both Kansas City and St. Louis have an earnings tax of 1 percent.
New York: Yonkers and New York City both have individual income taxes. New York City's income tax rates range from 2.907 percent to 3.648 percent. Yonkers’s income tax rate is equal to 10 percent of net (after credits) state income tax.
Ohio: 235 cities and 331 villages in Ohio have an income tax, including Columbus, Toledo, Cincinnati and Cleveland. Ohio law requires a flat rate that cannot exceed 1 percent unless the voters approve it. Ohio local income tax rates range from 0.40 percent in Indian Hill to 3 percent in Parma Heights.
Oregon: The Tri-Met Transit District (includes Portland) assesses an income tax of 0.6318 percent and the Lane County Transit District (includes Eugene) assesses an income tax of 0.60 percent. Multnomah County (Portland) also assesses a 1.45 percent business income tax.
Pennsylvania: Most municipalities in Pennsylvania assess a tax on wages, known as the Earned Income Tax. This tax is usually split between the municipality and the local school district. The local Earned Income Tax is only assessed on earned income, like wages. Unearned income like interest and dividends are not taxed. Pennsylvania state law limits the Earned Income Tax to a maximum flat rate of 2 percent, but Home Rule cities like Philadelphia and Scranton are not subject to this maximum. Cities with tax rates above 2 percent include Philadelphia (3.98 percent), Pittsburgh (3 percent), Reading (2.70 percent), Scranton (3.40 percent) and Wilkes-Barre (2.85 percent). Nonresidents have to pay the Earned Income Tax as well, but are usually taxed at a lower rate. Local income taxes are also assessed on the net profits of businesses.
Reference: taxes.about.com (updated February 2, 2017).
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