Quote:
State and Local Income Taxes < Previous Next >
If you do business in a state that imposes a personal income tax, you can add the withholding of the state tax to your list of payroll tax responsibilities. The states that don't impose a personal income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. (New Hampshire and Tennessee impose a tax on dividend and interest income only.) Every other state does have a personal income tax and requires employers to withhold the tax from employees' wages.
Most states allow employers to use methods that are similar to those used for federal tax purposes in determining their state income tax withholding amounts. With the exception of Arizona and North Dakota (where the state withholding amount is a fixed percentage of the federal withholding amount) and Pennsylvania (where the state withholding amount is a fixed percentage of an employee's gross wages), all of the states provide wage-bracket tables that you can use to compute state withholding amounts
