2025 State Income Tax Rates
How State Taxes Apply to Your Sports Betting Winnings
Updated Dec 9, 2025 · Tax returns filed in 2026
No Income Tax
9 States
AK, FL, NV, NH, SD, TN, TX, WA, WY
Highest Rate
13.3%
California's top marginal rate
Flat Tax States
14 States
Same rate for all income levels
What is State Income Tax?
A state income tax is a tax on income earned in that state. It is similar to a federal income tax, but instead funds state budgets rather than the federal government. Sports betting winnings are considered taxable income and are subject to both federal and state income taxes.
Some states have a progressive tax, while others have a flat tax. Nine states do away with collecting state income tax altogether—making them particularly attractive for sports bettors with significant winnings.
Types of State Income Tax
No Income Tax
9 States
These states don't collect state income tax on your sports betting winnings:
Washington has a 7-9.9% tax on long-term capital gains exceeding certain thresholds.
Flat Tax
14 States
These states apply the same tax rate regardless of income level. A bettor who won $500,000 pays the same rate as someone who won $5,000.
Examples: Illinois (4.95%), Pennsylvania (3.07%), Michigan (4.25%)
Progressive Tax
28 States + DC
Higher income levels are taxed at higher rates. Most range between 1% and 10%, with high-tax states reaching up to 13.3%.
Examples: California (1-13.3%), New York (4-10.9%), New Jersey (1.4-10.75%)
State Tax Rates by Year
2025 State Income Tax Rates
Applies to income earned in 2025, reported on tax returns filed in 2026
| State | Tax Rate(s) | Type |
|---|---|---|
| Alabama | 2% to 5% | Progressive |
| Alaska | No state income tax | No Tax |
| Arizona | 2.5% | Flat |
| Arkansas | 2% to 3.9% | Progressive |
| California | 1% to 13.3% | Progressive |
| Colorado | 4.4% | Flat |
| Connecticut | 2% to 6.99% | Progressive |
| Delaware | 2.2% to 6.6% | Progressive |
| District of Columbia | 4% to 10.75% | Progressive |
| Florida | No state income tax | No Tax |
| Georgia | 5.39% | Flat |
| Hawaii | 1.4% to 11% | Progressive |
| Idaho | 5.695% | Flat |
| Illinois | 4.95% | Flat |
| Indiana | 3% | Flat |
| Iowa | 3.8% | Flat |
| Kansas | 5.2% to 5.58% | Progressive |
| Kentucky | 4% | Flat |
| Louisiana | 3% | Flat |
| Maine | 5.8% to 7.15% | Progressive |
| Maryland | 2% to 5.75% | Progressive |
| Massachusetts | 5% to 9% | Progressive |
| Michigan | 4.25% | Flat |
| Minnesota | 5.35% to 9.85% | Progressive |
| Mississippi | 4.4% | Flat |
| Missouri | 2% to 4.7% | Progressive |
| Montana | 4.7% to 5.9% | Progressive |
| Nebraska | 2.46% to 5.2% | Progressive |
| Nevada | No state income tax | No Tax |
| New Hampshire | No state income tax | No Tax |
| New Jersey | 1.4% to 10.75% | Progressive |
| New Mexico | 1.5% to 5.9% | Progressive |
| New York | 4% to 10.9% | Progressive |
| North Carolina | 4.25% | Flat |
| North Dakota | 1.95% to 2.5% | Progressive |
| Ohio | 2.75% to 3.5% | Progressive |
| Oklahoma | 0.25% to 4.75% | Progressive |
| Oregon | 4.75% to 9.9% | Progressive |
| Pennsylvania | 3.07% | Flat |
| Rhode Island | 3.75% to 5.99% | Progressive |
| South Carolina | 0% to 6.2% | Progressive |
| South Dakota | No state income tax | No Tax |
| Tennessee | No state income tax | No Tax |
| Texas | No state income tax | No Tax |
| Utah | 4.55% | Flat |
| Vermont | 3.35% to 8.75% | Progressive |
| Virginia | 2% to 5.75% | Progressive |
| Washington | No state income tax* | No Tax |
| West Virginia | 2.22% to 4.82% | Progressive |
| Wisconsin | 3.5% to 7.65% | Progressive |
| Wyoming | No state income tax | No Tax |
Highest Taxed States for Sports Bettors
States with marginal tax rates above 10%
Highest marginal rate in the nation
High rate kicks in at $200K
Applies to income over $25M
Millionaire's tax
High rate on $1M+
Important: Not everyone pays the highest tax rate. The amount you'll pay depends on your filing status, whether you have dependents, and whether you qualify for tax deductions and credits.
When Are State Tax Returns Due?
State income tax return deadlines usually mirror the federal deadline in mid-April, but exceptions exist. For example, Virginia residents generally have until May 1 to file their state returns.
Pro Tip: Keep detailed records of all your sports betting activity throughout the year. This includes wins, losses, and any documentation from sportsbooks. You may be able to deduct gambling losses up to the amount of your winnings.
Disclaimer: This information is for educational purposes only and should not be considered tax advice. Tax laws change frequently, and individual circumstances vary. Always consult with a qualified tax professional for advice specific to your situation. Sources: Tax Foundation and state tax department websites.