MultiState – Tax Foundation Ranks Sales Tax Rates by State

SALT Report 2921 – The Tax Foundation released its midyear report, which compiles and ranks the sales and use tax rates for every state based on population-weighted averages. The publication provides an overview of state tax ranks as well as the impact of recent rate changes and local sales taxes.  Below you will find the states with the highest rates.

Combined Rates

The five states with the highest average combined rates are: Tennessee-9.44%, Arkansas-9.18%, Louisiana-8.89%, Washington-8.87%, and Oklahoma-8.72%.

State Rates

California has the highest state-level rate at 7.5%.  Five states, Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee tie for the second-highest statewide rate with 7% each.

Local Rates

The five states with the highest average local sales tax rates are: Louisiana-4.89%, Colorado-4.49%, Alabama-4.48%, New York-4.48%, and Oklahoma-4.22%.

The publication also provides a discussion on the implications of consumers making their purchases in areas with a lower tax rate and the consequences of businesses moving just outside the border of a jurisdiction with a higher tax rate to avoid being subject to those rates.

For Further Information

Tax Foundation – State and Local Tax Rates Mid-Year