Local and state sales taxes “add significantly” to the amount consumers pay for everyday goods, with Tuba City, Arizona, charging 13.725 percent, the most of any municipality, the Tax Foundation reported.
Tennessee has the highest combined sales-tax rate at 9.43 percent, the foundation reported today. Arizona followed with 9.12 percent; Louisiana, 8.84 percent; Washington, 8.79 percent; and Oklahoma, 8.66 percent. The foundation calculated the liabilities by averaging all local sales taxes in each state, giving added weight by population, and combining the average with the statewide rate.
The five with the lowest average combined rates are Hawaii, 4.35 percent; Maine, 5 percent; Virginia, 5 percent; Wyoming, 5.34 percent; and Wisconsin, 5.43 percent. Of the most populous states, California ranked 12th, with a combined average levy of 8.13 percent; Texas, 11th, at 8.14 percent; and New York, eighth, with a combined 8.48 percent, the foundation reported.
“The proliferation of local jurisdictions levying their own sales taxes can have an enormous impact on a state’s overall tax structure,” Scott Drenkard, an analyst for the nonprofit foundation, said in a statement. “In some states, local rates can more than double the average sales tax paid by consumers.”
The Washington-based research foundation, created in 1937 out of concern about the effect government spending and expansion might have on businesses, has received financial support from organizations such as the Business Roundtable and corporations including General Electric Co., PepsiCo Inc., Hewlett-Packard Co. and Wal-Mart Stores Inc., according to its website.
The Tuba City tax rate is so high because it combines a 6.6 percent state sales tax with a 1.125 percent county levy and an additional 6 percent charge on all purchases to benefit the Navajo tribal government, Drenkard wrote.
States with the lowest average local rates include Mississippi, Idaho, New Jersey, Vermont and Minnesota, the foundation reported. The five states with the highest average rates are Louisiana, Alabama, Colorado, New York and Oklahoma, according to the study.
Delaware, Montana, New Hampshire and Oregon are the states with no state or local sales tax, the report said.