State and Local Sales Tax Rates, Midyear 2015

by Scott Drenkard and Jared Walczak, The Tax Foundation, July 9, 2015 (excerpts)

Key Findings

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 Tennessee (9.46 percent), Arkansas (9.27 percent), Louisiana (9.01 percent), Alabama (8.93 percent), and Washington (8.90 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.

Differences in sales tax rates cause consumers to shop across borders or buy products online....

Combined Rates

Five states do not have statewide sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. Of these, Alaska and Montana allow localities to charge sales taxes.[1]

The five states with the highest average combined state and local sales tax rates are Tennessee (9.46 percent), Arkansas (9.27 percent), Louisiana (9.01 percent), Alabama (8.93 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 (5.43 percent), Wyoming (5.43 percent), and Maine (5.43 percent).

State Rates

California has the highest state-level sales tax rate at 7.5 percent.[2] Five states tie for the second-highest statewide rate at 7 percent: Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee.

The lowest non-zero, state-level sales tax is in Colorado, which has a rate of 2.9 percent. Seven states follow with 4 percent rates: Alabama, Georgia, Hawaii, Louisiana, New York, South Dakota, and Wyoming.[3] ....

Hawaii has the broadest sales tax in the United States, but it taxes many products multiple times and, by one estimate, ultimately taxes 99.21 percent of the state's personal income.[18] This base is far wider than the national median, where the sales tax applies to 34.46 percent of personal income.[19] ...

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