StructuredSales.org
StructuredSales.org
State capital gains tax is the layer a seller adds to the federal bill, or does not. Some states tax an individual's long-term gain as ordinary income. Others allow an exclusion, a lower rate, a county tax, or a surtax. Several states do not tax an individual's wages or capital gain at all. Washington has no wage income tax and does tax many long-term gains with an excise tax. Whether spreading the gain changes the state result depends on that state's rules.
A structured installment sale under IRC §453 defers recognition of gain that qualifies for the installment method. The seller reports a portion of the gain as payments arrive, instead of the entire gain in the year of sale. That can change federal long-term brackets and the 3.8% net investment income tax. It can also change the state result where brackets, an exclusion cap, or a surtax threshold make the year of recognition matter. It does not postpone a tax that is due because a deed is recorded, and it does not remove gain a state still treats as sourced to property in that state. Where the state rate is flat and there is no exclusion, spreading the gain changes when the state tax is paid more than the total state rate.
The figures below are the ones already stated on each state guide. Illinois, Iowa, and Ohio describe a flat income tax and do not print a percentage, so those three rows use the rate in this site's 2026 tax constants. This is not a new rate survey. For a specific sale, start with the questionnaire.
These guides say an individual does not add a state income-tax rate to long-term capital gain. An entity-level tax, a transfer tax, or another state's claim on property that stayed behind can still apply, and the guides say when. Missouri is in this list because, since 2025, an individual subtracts 100% of capital gain. Missouri still taxes income that is not capital gain.
| What the guide says | |
|---|---|
| Alaska | No individual income tax |
| Florida | No individual income tax |
| Missouri | 100% subtraction of an individual's capital gain since 2025. Other income is still taxed. |
| Nevada | No individual income tax |
| New Hampshire | No tax on wages or capital gain. The interest and dividends tax is repealed. |
| South Dakota | No individual or corporate income tax |
| Tennessee | No personal tax on wages or capital gain |
| Texas | No individual income tax |
| Wyoming | No individual or corporate income tax |
The rate column is the figure that state's guide uses for tax on an individual's capital gain, or the 2026 calculator constant when the guide does not print one. A note that mentions an exclusion, a county tax, or a surtax is a label, not a second calculation. Read the guide before treating the percentage as the tax on a particular sale.
| What the guide says | ||
|---|---|---|
| Alabama | 5% | 5% cap, plus a deduction for federal income tax. |
| Arizona | 2.5% | The 2.5% rate depends on when the asset was acquired. |
| Arkansas | 3.7% | Top rate 3.7% for 2026. Half of net capital gain is excluded. |
| California | 13.3% | Top marginal rate 13.3%. Gain is taxed as ordinary income. |
| Colorado | 4.4% | Flat 4.4%. |
| Connecticut | 6.99% | Top statutory rate 6.99%, with benefit recapture. |
| Delaware | 6.6% | Top rate 6.6%. |
| District of Columbia | 10.75% | Up to 10.75% over $1 million. |
| Georgia | 4.99% | Flat 4.99%. |
| Hawaii | 7.25% | 7.25% alternative tax on net capital gain. Ordinary brackets go to 11%. |
| Idaho | 5.3% | Stock and goodwill at the flat 5.3%. Qualifying ranchland, livestock, and timber are taxed on 40% of the gain. |
| Illinois | 4.95% | 4.95% in the 2026 tax constants. The Illinois guide describes a flat rate and does not print a percentage. |
| Indiana | 2.95% | State rate 2.95%. Counties add their own income tax. |
| Iowa | 3.8% | 3.8% in the 2026 tax constants. The Iowa guide describes a flat rate and does not print a percentage. A retired-farmer exclusion can remove some farmland gain. |
| Kansas | 5.58% | Up to 5.58%, with no farm exclusion. |
| Kentucky | 3.5% | Flat 3.5%. |
| Louisiana | 3% | Flat 3% for 2025 and after. |
| Maine | 7.15% + 2% surcharge | Up to 7.15%, plus a 2% surcharge above the income threshold in the Maine guide. |
| Maryland | 6.5% | Top state rate 6.5%. Counties add roughly 2.25% to 3.30%, and a 2% surtax can apply. |
| Massachusetts | 5% + 4% surtax | Most long-term gain at 5%, then an added 4% once income passes the threshold in the Massachusetts guide. |
| Michigan | 4.25% | 4.25%. City income taxes can add more. |
| Minnesota | 9.85% | 9.85%. |
| Mississippi | 4% | 4% on most land gain. |
| Montana | 4.1% | Net long-term gain at 3% and 4.1% in 2026. Ordinary rates are higher. |
| Nebraska | 4.55% | 4.55% in 2026. The Nebraska guide also states 3.99% for 2027. |
| New Jersey | 10.75% | 10.75%. |
| New Mexico | 5.9% | Top rate 5.9%. A business-sale deduction can apply. |
| New York | 10.9% | 10.9%. |
| North Carolina | 3.99% | 3.99% for tax years after 2025. |
| North Dakota | 2.5% | Top rate 2.5%, with a 40% exclusion. |
| Ohio | 3.5% | 3.5% in the 2026 tax constants. The Ohio guide does not print a percentage. It says capital gain is ordinary income, and that qualifying business income can be taxed differently. |
| Oklahoma | 4.5% | Top rate 4.5%. Gain on qualifying Oklahoma property held five years can be deducted in full. |
| Oregon | 9.9% | 9.9%. |
| Pennsylvania | 3.07% | Flat 3.07%. Pennsylvania installment rules are not the federal rules. |
| Rhode Island | 5.99% | 5.99% bracket. |
| South Carolina | 5.21% | 5.21% top rate on 56% of the gain. |
| Utah | 4.45% | Flat 4.45% for 2026. |
| Vermont | 8.75% | Ordinary rates up to 8.75%. A 40% exclusion, capped at $350,000 a year, can apply. |
| Virginia | 5.75% | 5.75%. |
| Washington | 7% / 9.9% | Excise tax at 7%, and 9.9% on taxable gain above $1 million. Deeded real estate is often exempt. |
| West Virginia | 4.58% | Brackets top out at 4.58%. |
| Wisconsin | 7.65% | Top rate 7.65%. A 30% or 60% exclusion can apply. |
A monetized installment sale and a deferred sales trust are different from the installment method these state guides describe. Read monetized installment sales and the IRS and a structured installment sale versus a deferred sales trust. Broader questions are in the FAQ.
Last reviewed: October 23, 2026. Rates follow the state guides linked above. Illinois 4.95%, Iowa 3.8%, and Ohio 3.5% are the rates in assets/js/tax-constants-2026.js.
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