The Tax Series: Refunds by State

In which state do companies get the biggest tax refunds? In the 2007 tax year it was the District of Columbia. Helps to be near the IRS, it seems.

The District of Columbia also came in on top in individual tax refunds at $2,615 per filing. Montana residents got the lowest individual tax refunds at $1,685 each.

There are some interesting stories in the data. For example, look at excise taxes. Why does Arkansas have such high refunds?

Excise taxes are a form of sin taxes. They're often levied on alcohol, tobacco and gasoline produced within a country. The Tax Foundation has a nice chart of excise taxes by state, which shows that Arkansas doesn't have much higher rates of excise taxes than other states. However, there were very few filings of excise taxes in 2007 in Arkansas, so perhaps the data is distorted by a few big refunds.

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Source data:

IRS Table 8: Amount of Internal Revenue Refunds Issued, Including Interest, by State, 2007

IRS Table 7: Number of Internal Revenue Refunds Issued, by State, 2007