The information in this article is up to date through tax year 2025 (taxes filed 2026).
State and local governments collect taxes, fees, and licenses to fund public services. State taxes support programs that serve the entire state, like schools, law enforcement departments, and health and welfare benefits. Local taxes are used by cities and counties to maintain services closer to home – such as schools, police, fire departments, and sanitation.
Types of state and local taxes
State and local governments each collect different types of taxes to fund public services, but they operate at different levels. State taxes are managed by the state government and support programs that benefit residents statewide. Local taxes, collected by counties, cities, or towns, fund services that directly impact the local community. Here’s a breakdown of common types of taxes at each level:
Common local taxes
- Local sales tax
- Property tax
- Individual income tax
- Motor vehicle license tax
- Utility tax
Common state taxes:
- Income tax
- Corporate income tax
- State sales tax
- Excise tax
Do I need to file a state tax return?
It depends on where you live and if your income is over a certain threshold. Every state has its own tax laws and requirements, and you can check your state’s department of revenue or taxation website to find out if you should file a state return this year.
Remember – even if you are not required to file a state return, you may still be subject to federal income taxes.
If your state owes you a tax refund, you must file a return to claim it – even if you’re not required to file a state return.You can check the status of your state refund online through your state’s website.
When you file with TaxSlayer, your federal and state return statuses are easily accessible in your account. When you log in, you can clearly see when your returns have been accepted. Once your state accepts your return, your refund is processed and distributed.
Which states have no income tax?
If you live or work in one of these states, you do not have to file a state tax return or pay income taxes to that state:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Tennessee used to tax investment income and interest, but that was fully repealed on Jan. 1, 2021. Similarly, New Hampshire only taxes investment income and interest, but the state i gradually phased that out starting on Dec. 31, 2023 and became fully repealed on Jan. 1, 2025.
Do I need to file multiple state tax returns?
You may need to file multiple state tax returns if you have moved within the last year, work in multiple states, or live and work in different states.
But don’t worry – our tax law ensures that the same income can’t be taxed by two (or more states). That is, even though you might be filing more than one state return, you aren’t paying taxes on the same income twice.
If you work in a state that has a reciprocal tax agreement with your home state, you may be able to submit a document to your employer and avoid having taxes withheld from your paycheck. If the two states do not have a reciprocal agreement, you may need to prepare multiple state returns, but you will be refunded for unnecessary withholding from your paychecks.
What is the SALT deduction?
The SALT deduction allows taxpayers to deduct either their state income tax or state sales tax, plus state and local property taxes. Since 2018, the cap on the SALT deduction (income (or sales) tax plus property taxes combined) has been$10,000.
Starting in tax year 2025, the One Big Beautiful Bill Act (OBBB) has increased the SALT cap to $40,000 ($20,000 for married couples filing separately). The cap will increase 1% each year through 2029.
How can I pay state taxes?
When you file with TaxSlayer, you can pay any state taxes you owe when you file. Otherwise, you can mail in your payment with a paper return or see if your state’s department of revenue or taxation accepts online payments with a credit/debit card or bank transfer.
Do I have to pay back general welfare and disaster relief payments?
If you received government payments from your state due to disaster relief], you don’t have to report them on your state tax return. This also applies to spillover payments announced in 2022 and distributed in 2023.
Check out this list provided by the IRS to see if you qualify.
When are my state and local taxes due?
State tax deadlines are typically the same as the federal deadline. However, sometimes states choose to extend the deadline for tax-relief purposes, such as natural disasters and other unexpected, special circumstances. Local tax deadlines and rules can be different depending on where you live. It’s best to check with your city or county tax office to make sure you’re filing and paying on time.
How do I amend a state tax return?
Most states require you to file amended state returns by mail. You can prepare an amended state return online with TaxSlayer, then print and mail it. Check with your state taxing authority for more information on your state’s amended return policy. If you made a mistake on your original return, got new tax documents, or realized you qualify for more deductions or credits, filing an amended return lets you update your information.
How do I file a state tax extension?
Each state has its own requirements for tax extensions. Some allow automatic extensions to file without having to file a form to request one, whereas some require you to file a request. You may need to request an extension if you’re unable to gather all necessary tax documents by the deadline or if you’re dealing with unexpected life events (divorce, job loss, death of a loved one, etc.).
Keep in mind – a tax extension simply gives you more time to file. You still need to pay any taxes you owe by the original filing deadline.
