Ranking State and Local Sales Taxes

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Five states do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Four of these five (all but Alaska) do not allow localities to charge a local sales tax. In Alaska, high local rates in populous places like Juneau and Kodiak (5 and 6 percent, respectively) certainly increase the average local rate, but not enough to give Alaskans a higher combined rate than any state that charges a statewide rate.

Among states that do collect a statewide tax, the five with the lowest average combined rates are Hawaii (4.35 percent), Maine (5 percent), Virginia (5 percent), Wyoming (5.34 percent), and Wisconsin (5.43 percent). The five highest combined rates are Tennessee (9.43 percent), Arizona (9.12 percent), Louisiana (8.84 percent), Washington (8.79 percent) and Oklahoma (8.66 percent).

Real-Estate Tax Rankings
Real-Estate Tax Rankings

The highest total sales tax burden in the United States is in Tuba City, Arizona, which has a combined rate of 13.725 percent.1] This rate is composed of a 6.6 percent state tax, a 1.125 percent Coconino county tax, and an additional 6 percent tribal tax levied by the To’Nanees’Dizi local government.

Table 1: State and Local General Sales Tax Rates as of July 1, 2011

State State Tax Rate Average Local Tax Rate Combined Rate Rank
Alabama 4.00% 4.64% 8.64% 6
Alaska None 1.74% 1.74% 46
Arizona 6.60% 2.52% 9.12% 2
Arkansas 6.00% 2.50% 8.50% 7
California (a) 7.25% 0.88% 8.13% 12
Colorado 2.90% 4.58% 7.48% 15
Connecticut 6.35% None 6.35% 31
Delaware None None None 47
Florida 6.00% 0.65% 6.65% 29
Georgia 4.00% 2.87% 6.87% 23
Hawaii (b) 4.00% 0.35% 4.35% 45
Idaho 6.00% 0.02% 6.02% 35
Illinois 6.25% 2.02% 8.27% 9
Indiana 7.00% None 7.00% 21
Iowa 6.00% 0.81% 6.81% 25
Kansas 6.30% 1.96% 8.26% 10
Kentucky 6.00% None 6.00% 36
Louisiana 4.00% 4.84% 8.84% 3
Maine 5.00% None 5.00% 43
Maryland 6.00% None 6.00% 36
Massachusetts 6.25% None 6.25% 33
Michigan 6.00% None 6.00% 36
Minnesota 6.875% 0.30% 7.18% 17
Mississippi 7.00% 0.003% 7.00% 20
Missouri 4.225% 3.45% 7.67% 14
Montana (c) None None None 47
Nebraska 5.50% 1.27% 6.77% 27
Nevada 6.85% 1.08% 7.93% 13
New Hampshire None None None 47
New Jersey 7.00% 0.03% 7.03% 19
New Mexico (b) 5.125% 2.11% 7.23% 16
New York 4.00% 4.48% 8.48% 8
North Carolina 4.75% 2.10% 6.85% 24
North Dakota 5.00% 1.38% 6.38% 30
Ohio 5.50% 1.28% 6.78% 26
Oklahoma 4.50% 4.16% 8.66% 5
Oregon None None None 47
Pennsylvania 6.00% 0.34% 6.34% 32
Rhode Island 7.00% None 7.00% 21
South Carolina 6.00% 1.14% 7.14% 18
South Dakota (b) 4.00% 1.81% 5.81% 40
Tennessee 7.00% 2.43% 9.43% 1
Texas 6.25% 1.89% 8.14% 11
Utah (a) 5.95% 0.73% 6.68% 28
Vermont 6.00% 0.14% 6.14% 34
Virginia (a) 5.00% None 5.00% 43
Washington 6.50% 2.29% 8.79% 4
West Virginia 6.00% None 6.00% 36
Wisconsin 5.00% 0.43% 5.43% 41
Wyoming (b) 4.00% 1.34% 5.34% 42
D.C. 6.00% 6.00%

(a) Three states levy mandatory, statewide, local add-on sales taxes at the state level: California (1%), Utah (1.25%), and Virginia (1%). We include these in their state sales tax.

(b) Hawaii, New Mexico, South Dakota, and Wyoming have broad sales taxes that also apply to many services. These states’ rates are not directly comparable to other states’ rates.

(c) Due to data limitations, table does not include sales taxes in local resort areas in Montana.

Source: Tax Foundation calculations; Sales Tax Clearinghouse; 2010 Census

State Rates

California, despite a recent 1 percent reduction in its sales tax rate, still has the highest state-level rate at 7.25 percent.[2] Five states tie for the second-highest rate of 7 percent: Indiana, Mississippi, New Jersey, Rhode Island and Tennessee.

The lowest non-zero state-level sales tax is in Colorado, which boasts a rate of 2.9 percent. Seven states follow with 4 percent: Alabama, Georgia, Hawaii, Louisiana, New York, South Dakota and Wyoming.

In addition to California, there have been two recent changes in state rates since the publication of the most recent Tax Foundation report on local sales taxes in February, 2011. On July 1, 2011 North Carolina lowered its sale tax rate by 1 percentage point to 4.75 percent, and Connecticut raised its state rate by 0.35 percentage points to 6.35 percent.

Local Rates

The five highest average local rates are in Louisiana (4.84 percent), Alabama (4.64 percent), Colorado (4.58 percent), New York (4.48 percent) and Oklahoma (4.16 percent).

Fourteen states have no local option general sales tax, but this does not always make for favorable rankings. Indiana, despite having no local general sales taxes, still ranks 21st because of a 7 percent statewide rate.

Mississippi has the lowest non-zero average local rate of 0.003 percent; attributable entirely to a 2.5 percent sales tax in the small city of Tupelo, which has a population of 34,546. [3] After Mississippi, the states that round out the lowest five non-zero rates are Idaho (0.02 percent), New Jersey (0.03 percent), Vermont (0.14 percent) and Minnesota (0.30 percent).

The highest local rate is 7 percent in Wrangell, Alaska, which–thanks to its small population (Census estimates 2,369 people)–does not have a substantive effect on the average local rate.

 

 

 

-See more: http://taxfoundation.org/article/ranking-state-and-local-sales-taxes-1

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