Posted on 09/24/2011 6:25:25 PM PDT by SeekAndFind
September 22, 2011
Today we released a new report on local sales taxes, which updates a study we published in February. The new report updates the state and local sales tax rates across the country and ranks each state on its combined state rate and average local rate. Click here to read the report.
Most shoppers have some idea of the sales tax rate imposed by their state, or they can at least find the rate by looking at the receipts they receive with every taxed purchase. However, it's easy to forget about the local rates imposed by many jurisdictions on top of the statewide rate. Local option sales taxes can add significantly to the amount consumers pay for everyday goods; in some states, they can more than double the average sales tax paid by consumers.
The map below (click here to download it on our website) illustrates the combined rate and rank for each state, and a table in the new report displays the state rate, average local rate, combined rate, and rank of the combined rate for each state and the District of Columbia.
States with the Lowest State and Local Sales Taxes
Our report finds that although 14 states have no general local option sales tax, these states do not necessarily rank favorably. Indiana, for example, has no local general sales tax yet still ranks 21st because of a 7% statewide rate.
The following four states tie for the lowest rate because they impose neither a state sales tax nor a local sales tax:
Among states that do collect a statewide tax, the five with the lowest average combined rates are:
Mississippi has the lowest non-zero average local rate of 0.003%; attributable entirely to a 2.5% sales tax in the small city of Tupelo, which has a population of 34,546. After Mississippi, the following states have the lowest average local rates:
States with the Highest State and Local Sales Taxes
The highest sales taxes jurisdiction in the U.S. is Tuba City, Arizona, which has a combined rate of 13.725%. This is composed of a 6.6% state tax, a 1.125% Coconino county tax, and an additional 6% tax levied by the local Navajo tribal government.
Looking at state averages for local rates, we find the five highest average local rates in the following states:
These states have the five highest combined state and local rates:
Click here for the full study, the data by itself, or the map by itself.
In Crook County, Il we pay a total of 11% sales tax.
Is that why it’s called “Crook” county?
Not all towns pay the same in Texas. Mine is 8%. A mile down the road in another town it’s 8.5%.
8.25% is the ceiling in Texas. Unless they just very recently raised it.
The Texas sales tax rate is 6.25%. Individual city, county and transit authority rates vary. Combined the tax isn’t supposed to exceed 8.25%. Do you know why your neighboring town can charge more?
Nice but only a piece of a much larger puzzle.
I like http://www.bestplaces.net/col/ to illustrate the difference in cost of living at a particular salary level. I recently “downsized” my COL by 34%.
Yes, it included a move away from California.
One of the few victories in California was voting down the extension of sales tax hikes earlier this year. Dropped 1%
The map shows that Michigan has a combined sales tax of 32.2%. That can’t be right. I even put my glasses on and looked at it.
Need one that combines State Income tax, Sales Tax and Property Taxes to glean a better normalized comparison.
My property tax just dropped to half what it was a few years ago. I now pay $800.00 a year. There are places back east that have the same valuation and they are paying $5,000 a year.
What’s up with Tennessee? They also have an outrageous 17.25% rooms and meals tax the last time I was there in ‘06. I will avoid staying there in the future, not that anybody there cares.
Just one of the MANY.
Sales tax alone is not particularly meaningful as your comment suggests. The comparison that matters is total taxation. In Maryland we have only a 6 percent sales tax with no local version. However I pay $2500+ in property tax and 5+ percent state income tax with a 3 percent piggy-back income tax here in Prince George's County. Our governor and legislative leaders understand the current budget challenge to be a revenue problem.
Maybe because TN has no state income tax? Just a guess. Some TN residents might can comment about it.
Oregon, [in a 3-way tie at 47th] has no sales tax, but a hefty [but not as hefty as CA’s was in 1984 when I left CA for OR] income tax; and OR property taxes were (during the years 1997-2003 that we had comparably valued property in both states) considerably higher than SD
My point is not to tout SD, nor knock Oregon, but to merely point out that these single facet “analysis” are pretty much worthless. One must look at the entire state & local tax burdens in each state, based upon equal family size, income, deductions, spending, property value (NOT assessed value!) etc. Also needing to be included are vehicle related taxes and fees based on the same vehicle & miles driven/year.
Then there are still other factors not shown in this sales tax % map: WHAT is or isn't taxed? Everything? Everything except food? What about prescriptions? Items for resale? Are there any exemptions/rebates available to elderly/blind/”poor” or others? Are all, or some, “services” taxed as a “sale”; or none?
I'm not sure what the “average” state & local rate has to do with informing a consumer of anything useful, such as how their local rate compares to neighboring rates.
My county's unincorporated area businesses charge the flat state rate; if I shop inside city limits then the rate goes up, with the city's rate + state rate charged. If I go to Rapid City, I pay state + a lower city rate) rate...unless it is a large item from a large retailer that collects based on ZIP Code, in which case I pay my normal, state-only rate.
An aside to all this is, if it is so many different rates just to shop locally, then HOW is a retailer, especially a small one, on the Web supposed to collect the correct rate for each customer's sales tax correctly? Software that is constantly updated? Use of a specialized service? Either one will wipe out their margin; or they can price themselves out of business, to cover the increased costs.
Yep. Agreed. Separating out only one of the ways (sales taxes) that government pillages people doesn't mean much without the context of state and local income and nuisance taxes.
Need one that combines State Income tax, Sales Tax and Property Taxes to glean a better normalized comparison.
I live in NH. We have neither. Maybe it’s because they are tax happy - that would be a much more likely excuse in my mind.
17.25% rooms and meals tax the last time I was there in ‘06.
Here in Tn. they keep saying, “well, we have no state in-come tax”, which I agree. How-ever, if you could add up all the hidden tax’s on other act’s. you would understand why there is no state in-come tax. Example, all patients in Nursing Home beds, five year ago $100.00 per bed, I’m sure it’s more expensive by now. Like the tax you mention, many don’t know it exist.
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