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State Tax Rates

State and Local Tax Rates

Current State and Local Sales Tax Rates and Rankings as of June 2019

  • Forty-five states and the District of Columbia collect statewide sales taxes.
  • Local sales taxes are collected in 38 states. In some cases, they can rival or even exceed state rates.
  • The five states with the highest average combined state and local sales tax rates are Tennessee (9.47 percent), Louisiana (9.45 percent), Arkansas (9.43 percent), Washington (9.17 percent), and Alabama (9.14 percent).
  • No state rates have changed since July 2018, when Louisiana’s declined from 5.0 to 4.45 percent.
  • The District of Columbia’s sales tax rate increased to 6 percent from 5.75 percent.
  • Sales tax rates differ by state, but sales tax bases also impact how much revenue is collected from a tax and how the tax affects the economy.
  • Sales tax rate differentials can induce consumers to shop across borders or buy products online.

California has the highest state-level sales tax rate, at 7.25 percent. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero, state-level sales tax is in Colorado, which has a rate of 2.9 percent. Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New York, and Wyoming.

No states have changed their statewide sales tax rates since July 2018, although the District of Columbia raised its sales taxes from 5.75 percent to 6 percent in October.

The five states with the highest average local sales tax rates are Alabama (5.14 percent), Louisiana (5.00 percent), Colorado (4.73 percent), New York (4.49 percent), and Oklahoma (4.42 percent).

Average local rates rose the most in Florida, jumping the state from the 28th highest combined rate to the 22nd highest. The change was largely due to a 1 percent sales tax in Broward County and a 1.5 percentage-point local increase in Hillsborough County. Colorado maintained its ranking, but saw 39 counties raise their sales taxes, including Central City’s increase from 4 percent to 6 percent at the start of 2019.

Utah’s rank rose three spots, to 26th. This is largely due to Salt Lake County and Salt Lake City increasing their local sales taxes by and 0.25 and 0.5 percent, respectively.

Nebraska saw the largest decrease in sales taxes this year, improving its combined state and local sales tax ranking by two spots. Lincoln drove this change by decreasing its sales tax from 1.5 percent to 1.0 percent, offsetting increases in a few smaller Nebraska municipalities.

While Wyoming’s ranking did not change, the state saw the year’s second-largest combined sales tax decrease when Carbon County’s 1 percent special purpose tax expired.[9]

Sales taxes are just one part of an overall tax structure and should be considered in context. For example, Tennessee has high sales taxes but no wage income tax, whereas 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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