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​State and Local Sales Tax Rates, Midyear 2017


Retail sales taxes are one of the more transparent ways to collect tax revenue and is readily evident to consumers, who can see their tax burden printed directly on their receipts.

In addition to state-level sales taxes, consumers also face local sales taxes in thirty-eight states. According to The Tax Foundation, these rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state and local rate compared to other states.

The Tax Foundation report provides a population-weighted average of local sales taxes as of July 1, 2017, to give you a sense of the average local rate for each state.

Key Findings at midyear 2017

  • Forty-five states and the District of Columbia collect statewide sales taxes
  • Local sales taxes are collected in thirty-eight states
  • The five states with the highest average combined state and local sales tax rates are Louisiana (10.02 percent), Tennessee (9.45 percent), Arkansas (9.34 percent), Washington (9.20 percent), and Alabama (9.03 percent)
The takeaway
 
Sales tax rate differentials impact both business and consumer behaviors, causing both to make choices to work and shop where sales tax rates are lower. In addition to the combined sales tax rate, the complexity of calculating rates where state tax jurisdictions overlap causes detrimental effects on corporate behavior.
 

Let's talk simplifying sales tax

Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0093.

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