When it comes to living in the Mid-Atlantic region of the United States, there are a lot of factors to consider. One of the most significant factors is the difference in taxes between states like Maryland and Virginia.
State Income Taxes
One of the biggest differences between Maryland and Virginia is their state income tax rates. Maryland has a graduated tax system that ranges from 2% to 5.75%. Virginia, on the other hand, has a flat tax rate of 5.75%. For people who make less than $17,000 a year, Virginia's tax rate is actually lower than Maryland's.
Property Taxes
Another major difference between the two states is property taxes. Maryland has some of the highest property tax rates in the country, with an average rate of 1.1%. Virginia, on the other hand, has a lower average property tax rate of 0.8%. However, it's important to note that tax rates can vary depending on where you live in each state.
Sales Taxes
When it comes to sales taxes, both Maryland and Virginia have a state rate of 6%. However, Virginia allows local governments to add on additional sales tax rates, which can vary from city to city. In Maryland, local governments are only allowed to add on a 2% sales tax rate.
Corporate Taxes
For businesses, Virginia has a lower corporate tax rate than Maryland. Virginia's corporate tax rate is 6%, while Maryland's is 8.25%. However, Maryland does offer tax credits and incentives to certain businesses that can offset the higher tax rate.
Conclusion
Overall, there are pros and cons to living in both Maryland and Virginia when it comes to taxes. While Maryland has higher income and property tax rates, it does offer certain tax credits and incentives for businesses. On the other hand, Virginia has a lower flat income tax rate and lower property tax rates in some areas, but its sales tax rates can vary depending on where you live.