OBBBA Average Tax Cuts by State & County Map

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, makes the most significant legislative changes to federal taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. policy since the 2017 Tax Cuts and Jobs Act (TCJA).

Notably, the OBBBA makes permanent the individual tax changes first put in place by the TCJA, which avoids a tax hike on an estimated 62 percent of tax filers in 2026. The law provides additional tax cuts to individuals and businesses on top of TCJA extensions, including new deductions for tipped and overtime income, an expanded child tax credit and standard deductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. Taxpayers who take the standard deduction cannot also itemize their deductions; it serves as an alternative., and permanence for 100 percent bonus depreciationDepreciation is a measurement of the “useful life” of a business asset, such as machinery or a factory, to determine the multiyear period over which the cost of that asset can be deducted from taxable income. Instead of allowing businesses to deduct the cost of investments immediately (i.e., full expensing), depreciation requires deductions to be taken over time, reducing their value and disco and domestic research and development (R&D) expensing.

To visualize the OBBBA tax changes, Tax Foundation has estimated the average change in taxes paid per individual taxpayer under the OBBBA relative to prior law across each state and county from 2026 through 2035. As such, the map below illustrates the considerable geographic variation in tax benefits from the OBBBA, relative to a scenario in which the TCJA individual tax provisions expire, and business taxes increase as previously scheduled starting in 2026.

We estimate the OBBBA will reduce federal taxes on average for individual taxpayers in every state. Taxpayers in Wyoming ($5,375), Washington ($5,372), and Massachusetts ($5,139) will see the largest average tax cuts in 2026, while taxpayers in West Virginia ($2,503) and Mississippi ($2,401) will see the smallest average tax cuts that year.

At the county level, the largest average tax cuts are found in mountain resort towns. For example, we estimate Teton County in Wyoming will see an average tax cut of $37,373 per taxpayer in 2026, the highest in the US. Pitkin County, CO ($21,363), and Summit County, UT ($14,537), rank number two and three for the largest average tax cuts, likely representing the residences of business owners and higher-earning taxpayers. The smallest average tax cuts are found in rural counties, such as Loup County, NE, with an average tax cut of $824 in 2026.

Across all individual tax filers throughout the country, the average tax cut per taxpayer will be $3,752 in 2026. The average tax cut falls to $2,505 in 2030 as certain individual changes like deductions for tips and overtime income expire, before rising again up to $3,301 in 2035 as inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spendin increases the nominal value of the permanent tax cuts.

Specific tax changes also exhibit geographic variation. For example, the $40,000 cap on state and local tax (SALT) deductions ($10,000 cap post-2029) will tend to have the greatest impact on taxpayers in higher-tax localities on the coasts of the US.

Tax Foundation estimates the OBBBA will create about 938,000 full-time equivalent jobs over the long run, ranging from more than 132,000 jobs in California and 81,000 jobs in Texas to about 1,700 new jobs in Vermont. The map below provides a state-level breakdown of the full-time equivalent jobs created from the OBBBA’s passage.

Table 1: State Average Tax Changes per Filer per State Under One Big Beautiful Bill Tax Changes, 2026 – 2035

Source: Tax Foundation General Equilibrium Model, June 2025

Methodology

We estimate the geographic distribution of tax changes under the OBBBA individual and business provisions using conventional revenue estimates at the national level generated by the Tax Foundation’s General Equilibrium Model. In this map, we do not include the impact of the OBBBA estate taxAn estate tax is imposed on the net value of an individual’s taxable estate, after any exclusions or credits, at the time of death. The tax is paid by the estate itself before assets are distributed to heirs. changes.

We allocate to individual tax filers in counties using data from the IRS Statistics of Income for individual tax returns in 2022. The IRS data provides various tax characteristics broken down by county. The conventional revenue estimates do not include impacts on GDP and other economic aggregates.

From the IRS data, certain tax characteristics are used to allocate to counties the conventional national revenue estimates for each of the OBBBA provisions, as described in Table 2, and then averaged by the number of filers in each county. This analysis’s accuracy is limited by the extent of the IRS data at the county level, which is particularly limited for OBBBA’s new and narrowly targeted provisions, such as the deduction for tipped income.

For the OBBBA business provisions, we assume these fall partly on capital income and partly on labor income, in accordance with several studies. In particular, we assume the corporate tax is initially borne mainly by capital income (90 percent in the first year), and over time the burden shifts to labor income until it is evenly split across capital and labor income in the long run (50 percent capital income and 50 percent labor income in the fifth year and beyond).

Our state-level jobs impacts are allocated based on the national jobs estimated from the Tax Foundation General Equilibrium Model and the distribution of labor and capital income across the states.