How State and Local Sales Tax Rates Differ in US

Accounting Web | April 5, 2016

By Terry Sheridan

Sales taxes, for all their transparency and ease of understanding compared to other taxation, have more pervasive influences than taxpayers, business owners, and policymakers might think. They can affect where taxpayers choose to shop and buy, bolster online purchases, and influence where businesses decide to locate – all of which, naturally, affects local economies.

That’s the underlying message in the Tax Foundation’s recent report, State and Local Sales Tax Rates in 2016.

There’s a wide gamut nationwide among states that collect state sales taxes, or state and local sales taxes, or none at all.

  • Statewide sales taxes are levied in 45 states and the District of Columbia.
  • Local taxes are collected in 38 states.
  • The five states with the highest average combined state and local sales tax rates are Tennessee (9.46 percent), Arkansas (9.30 percent), Louisiana (9.0 percent), Alabama (8.97 percent), and Washington (8.90 percent).
  • The five states with the lowest average combined rates are Alaska (1.78 percent), Hawaii (4.35 percent), Wisconsin (5.41 percent), Wyoming (5.42 percent), and Maine (5.55 percent).
  • The five states that don’t levy state sales taxes are Alaska, Delaware, Montana, New Hampshire, and Oregon. But Alaska and Montana allow local governments to levy sales taxes.

Read the full article here.

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