Taxation Across the United States in 2013
Source: Scott Drenkard, "State and Local Sales Tax Rates Midyear 2013," Tax Foundation, August 28, 2013
September 5, 2013
Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt, says Scott Drenkard of the Tax Foundation.
Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states.
The five states with the highest average combined rates are:
The five states with the highest average local sales tax rates are Louisiana (4.89 percent), Colorado (4.49 percent), Alabama (4.48 percent), New York (4.48 percent) and Oklahoma (4.22 percent).
Of course, sales taxes are just one part of an overall tax structure and should be considered in context. For example, Washington state has high sales taxes but no income tax; Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers' control that can have immediate impacts.
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Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states.
The five states with the highest average combined rates are:
- Tennessee (9.44 percent).
- Arkansas (9.18 percent).
- Louisiana (8.89 percent).
- Washington (8.87 percent).
- Oklahoma (8.72 percent).
- Alaska (1.69 percent).
- Hawaii (4.35 percent).
- Maine (5 percent).
- Wisconsin (5.43 percent).
- Wyoming (5.50 percent).
The five states with the highest average local sales tax rates are Louisiana (4.89 percent), Colorado (4.49 percent), Alabama (4.48 percent), New York (4.48 percent) and Oklahoma (4.22 percent).
Of course, sales taxes are just one part of an overall tax structure and should be considered in context. For example, Washington state has high sales taxes but no income tax; Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers' control that can have immediate impacts.
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