Saturday Finances—2016 Sales Tax Findings

State & local sales taxes as of 1 January 2016

From the Tax Foundation Fiscal Facts, No. 504 (pdf)_March 2016_by economists, Scott Drenkard & Nicole Kaeding



2016 State & Local Sales Tax Rates

Source:  Tax Foundation Fiscal Facts, No. 504_March 2016

Interesting Findings

Methodology

The Sales Tax Clearinghouse publishes quarterly sales tax data by zip code at the state, county & city levels.  These figures are then weighted by population according to the 2010 U.S. Census.  Some zip codes have no residents, so the findings in this study are based on populated areas known as Zip Code Tabulation Areas (ZCTA).

  • 45 states & the District of Columbia collect sales taxes
  • Local sales taxes are collected in 38 states
  • The highest average combined state & local sales taxes are collected in Tennessee (9.46%), Arkansas (9.30%), Louisiana (9.0%), Alabama (8.97%), and Washington (8.9%)
  • The lowest average combined state & local sales taxes are collected in Alaska (1.78%), Hawaii (4.35%), Wisconsin (5.41%), Wyoming (5.42%), and Maine (5.55%).  
  • Five states do not have statewide sales tax:  Alaska, Delaware, Montana, New Hampshire & Oregon.  Alaska & Montana (Montana imposes resort taxes) charge local sales taxes.
  • California has the highest state-level sales tax rate at 7.5%.  Indiana, Mississippi, New Jersey, Rhode Island & Tennessee are tied for the second highest statewide tax rate at 7%.
  • No state increased their state-level sales tax at the beginning of 2016.  
  • The five states with the highest average local sales taxes are Louisiana (5.01%), Alabama (4.93%), Colorado (4.54%), New York (4.48%) & Oklahoma (4.28%).
  • County-wise, local sales tax in Clark County, Nevada, increased from 8.10% to 8.15% effective 1 January 2016.
  • Cook County, Illinois, (includes Chicago) raised its county-level sales tax by 1 percent, from 1.75% to 2.75% on 1 January 206.  
  • As a result of the increase in Cook County, the sales tax rate in the city of Chicago increased to 10.25%, giving Chicago the highest sales tax rate of any large city in the U.S. 

For more interesting findings in this report, click here 

Find more Tax Foundation publications here



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