Sales taxes are taxes on goods and services purchased. These are usually calculated as a percentage of the price paid. Sales taxes vary by state, and even by municipality. In some states, there are no sales taxes at either the state or local level. Other states and local authorities can charge a hefty amount. In Tennessee, for example, consumers can pay as much as 9.44% in sales taxes when combining state and local taxes, according to the Tax Foundation.
In 12 states, sales taxes are higher than 8%. Sales taxes are often considered to be regressive, meaning lower-income individuals and households spend a greater proportion of their earnings to pay the tax, compared to higher income residents.