Taxation Across the United States in 2013

9/5/13
 
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from NCPA,
9/5/13:

Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt, says Scott Drenkard of the Tax Foundation (look at all 50 states).

Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states.

The five states with the highest average combined rates are:

• Tennessee (9.44 percent).

• Arkansas (9.18 percent).

• Louisiana (8.89 percent).

• Washington (8.87 percent).

• Oklahoma (8.72 percent).

The five states with the lowest average combined rates are:

• Alaska (1.69 percent).

• Hawaii (4.35 percent).

• Maine (5 percent).

• Wisconsin (5.43 percent).

• Wyoming (5.50 percent).

California, which raised its sales and income taxes through the initiative process in November 2012, has the highest state-level rate at 7.5 percent. Five states tie for the second-highest statewide rate with 7 percent each: Indiana, Mississippi, New Jersey, Rhode Island and Tennessee.

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

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