5 States Hitting Residents With Big Tax Hikes

State deficit estimate for fiscal 2010: $1.2 billion
Percent of general fund budget: 32%
State and local tax burden: 6.6%; Rank: 49

Nevada's freewheeling, low-tax past is coming back to haunt it like a bad hangover. The state levies no personal income tax and imposes some of the lowest taxes on businesses in the nation, says Bert Waisanen, a fiscal analyst at the National Conference of State Legislatures.

Nevada used to be able to afford being so generous with its residents. Revenue from tourism and gambling supported the state just fine. But now, as consumers would rather put their coins in a bank account than a slot machine, that revenue source is drying up. In fact, the state boasts the dubious honor of having the largest deficit in the country as a percentage of its budget – 32%. It hiked the sales tax by 0.35% to 6.85% and taxes on hotel rooms are up 3%. It's even gambling with its business-friendly climate by raising taxes on businesses.