Fiscal Affairs: A regionwide look at state tax collections and burdens, revenue sources and trends

Income, sales and property taxes serve as the own-source revenue base for most states and their local governments. But within this general framework, considerable variation exists among states, including those in the Midwest. For example:

• South Dakota has no income tax, and more than 80 percent of its total revenue collections come from general and selective sales taxes — by far the highest percentage in the Midwestern region.
• The property tax is generally levied by local, not state, governments. However, Kansas and Michigan have long had state property taxes to finance K-12 schools and provide greater funding equity across districts. The state property tax accounts for 7.3 percent and 6.9 percent of total revenue collections in Kansas and Michigan, respectively.
• Ohio has no corporate income tax. It is the only Midwestern state (and one of seven U.S. states) that levies a Commercial Activity Tax.
• North Dakota collects more than half of its total revenue from taxes on oil and gas production in the state.
• On a per capita basis, most Midwestern states and local governments collect fewer taxes than the U.S. average. Per capita tax collections are lowest in South Dakota, $5,054.

This information comes from a CSG Midwest analysis of U.S. Census Bureau data. The full analysis appeared in the fall 2025 edition of Stateline Midwest. This analysis was done as part of CSG Midwest’s ongoing support of the Midwestern Legislative Conference Fiscal Affairs Forum.

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