LJWorld.com weblogs Town Talk
Report shows Kansas has one of the highest vehicle tax rates in the country; see how our property taxes compare with other states
I have been accused by some in my family of having a problem because I never sell a vehicle after I’m done using it. So, yes, I do own six vehicles at the moment, but in my defense, not all of them run. But now there is a new report out that suggests I’m not a problem but rather a Kansas patriot trying to solve the state’s revenue woes. Kansas once again has been found to have one of the highest vehicle tax rates in the country.
For good measure, the report also found that Kansas is near the top quartile for real estate taxes too.
First, a look at vehicle taxes. The financial website WalletHub looked at the personal property tax rates charged on vehicles in all 50 states and the District of Columbia. There are 24 states that don’t charge any annual tax on vehicles. Of the ones that do, Kansas had the 10th highest rate in the country.
A few caveats: Vehicle taxes can vary from one county to the next because there is both a state and a local tax rate involved. WalletHub, though, looked at both state and local rates in its analysis; however, it would be difficult to look at every local rate in the country. Instead, it used sampling in each state to create a statewide average vehicle tax rate. It then applied that tax rate to a 2016 Toyota Camry four-door sedan because that was the highest-selling car in the country last year.
Undoubtedly the amount of taxes you pay on your vehicle will be different from what the study found, but I still think it is a pretty good way to see how Kansas’ vehicle taxes stack up to other states. Here’s a look at what states in our region charge for a brand new Toyota Camry.
— Missouri: $443
— Kansas: $416
— Colorado: $412
— Nebraska: $331
— Iowa: $231
— Oklahoma: $0
As you can see, Kansas’ taxes aren’t out of line with everybody’s in the region. In fact, they are a good deal lower than Missouri’s. Imagine how expensive it would be in Missouri if the state started charging a tax on the cement blocks that hold the cars up. (Apologies, the rivalry is not entirely dead, I guess.) On the other side of the equation, the tax differences in Nebraska, Iowa and Oklahoma are noticeable.
In case you are wondering, Rhode Island has the highest vehicle property tax rate. It charges a whopping $1,100 in vehicle property taxes on that new Camry.
Now a look at real estate taxes. The bottom line is WalletHub determined that Kansas has the 15th highest real estate property tax rate in the country. To determine the tax rate, WalletHub used Census data. Each year the Census Bureau provides an estimate of the median home value for each state and also provides an estimate for the median real estate tax payment for each state. With those two numbers, WalletHub calculated an effective tax rate for each state. In Kansas, that rate came out to 1.4 percent, meaning that average Kansans pay about 1.8 percent of their home’s value in taxes each year.
Here’s a look at the tax rates for states in the region.
— Nebraska: 1.85 percent
— Iowa: 1.48 percent
— Kansas: 1.40 percent
— Missouri: 1.0 percent
— Oklahoma: 0.88 percent
— Colorado: 0.60 percent
Comparing real estate taxes, though, is a bit trickier than comparing vehicle taxes. That’s because there can be large differences in the average home price from one state to the next. A $150,000 home in Kansas looks pretty good. In California, it looks suspiciously like cardboard. Californians also may laugh at some of our paychecks too, so some of this equals out. Regardless, here is a look at what people in the region pay, based upon the assumption they own the average-priced home in their state.
— Nebraska: $133,300 median home price. Annual taxes paid: $2,467
— Iowa: $129,200 median home price. Annual taxes paid: $1,916
— Kansas: $132,000 median home price. Annual taxes paid: $1,849
— Missouri: $138,400 median home price. Annual taxes paid: $1,387
— Oklahoma: $117,900 median home price. Annual taxes paid: $1,036
— Colorado: $247,800 median home price. Annual taxes paid: $1,489
My takeaway from those numbers is that Colorado uses the medical bills of Kansas skiers to subsidize their property taxes. Property taxes are pretty low in Colorado.
In case you are wondering, Hawaii has the lowest property tax rate at 0.27 percent, but its home values are the highest in the country, so you still pay about $1,400 in property taxes on the average $515,000 home. The state that appears to have the best combination of a low tax rate and a low median home value is Alabama. Folks there pay $543 in property taxes on the average $125,500 home. New Jersey tops the list with a 2.35 percent tax rate. Residents there pay $7,410 on the average $315,900 home.
WalletHub did not do this, but since we have the information handy, I decided to combine the total property tax bill for real estate and vehicle taxes to see what that looks like for states in our region. In other words, this is what you would pay if you owned the average price home in that state and owned a 2016 Toyota Camry.
— Nebraska: $2,798
— Kansas: $2,265
— Iowa: $2,147
— Colorado: $1,901
— Missouri: $1,830
— Oklahoma: $1,036
One thing to keep in mind is that these are just two of the types of taxes people pay, so this is not a complete look at the tax environment of a state. To be more comprehensive, you would need to look at least at sales and income taxes too. Kansas may not do great on sales taxes, as Kansas still taxes groceries where many other states do not. But Kansas may do pretty well in income taxes, since lawmakers have adopted a strategy of a “march to zero” on state income tax rates.
If that strategy holds, there is only one logical argument for me to make in my home: The patriotic thing to to do is to continue my “march to a 7th vehicle.”