Income tax is paid to the state the property is in?

[Katrina Cabral]

Do you pay ‘state’ income tax on a property to the state that the property is in? And do some states have higher tax rates for rental property income? And if so, then does it make sense to structure a deal such that you’re less cash flow positive in higher tax states? 

I have my primary residence in California. I’m leaving the state. Going to rent it out but I suspect that state income tax is higher than where I’m moving. I have taken on a mortgage at my new location. Now I’m wondering if I should refinance my old primary in California to make it less cash flow positive and reduce my mortgage at my new place.