State and Local Sales Tax Rates, 2022

Key Findings

  • 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 Louisiana (9.55 percent), Tennessee (9.547 percent), Arkansas (9.48 percent), Washington (9.29 percent), and Alabama (9.22 percent).
  • No state rates have changed since Utah increased the state-collected share of its sales tax from 5.95 percent to 6.1 percent in April 2019.
  • 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.

Introduction

retail sales tax vitamin e are one of the more crystalline ways to collect tax gross. While graduate income tax rates and brackets are building complex and confusing to many taxpayers, sales taxes are easier to understand ; consumers can see their tax effect printed directly on their receipts .
In addition to state-level sales taxes, consumers besides face local sales taxes in 38 states. These rates can be solid, so a state of matter with a moderate statewide sales tax rate could actually have a identical high combined state of matter and local pace compared to early states. This report provides a population-weighted average of local anesthetic sales taxes as of January 1, 2022, to give a smell of the median local pace for each state. board 1 provides a full state-by-state list of department of state and local sales tax rates .

Combined Rates

Five states do not have statewide sales taxes : Alaska, Delaware, Montana, New Hampshire, and Oregon. Of these, Alaska allows localities to charge local sales taxes. [ 1 ]
The five states with the highest average combined state and local sales tax rates are Louisiana ( 9.55 percentage ), Tennessee ( 9.547 percentage ), Arkansas ( 9.48 percentage ), Washington ( 9.29 percentage ), and Alabama ( 9.22 percentage ). The five states with the lowest median combined rates are Alaska ( 1.76 percentage ), Hawaii ( 4.44 percentage ), Wyoming ( 5.22 percentage ), Wisconsin ( 5.43 percentage ), and Maine ( 5.50 percentage ).

2022 sales taxes including 2022 sales tax rates 2022 state and local sales tax rates

State Rates

California has the highest state-level sales tax rate, at 7.25 percentage. [ 2 ] Four states tie for the second-highest statewide rate, at 7 percentage : Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percentage. Five states follow with 4 percentage rates : Alabama, Georgia, Hawaii, New York, and Wyoming. [ 3 ]
No state rates have changed since April 2019, when Utah ’ s state-collected rate increased from 5.95 percentage to 6.1 percentage. ( The state rate is now officially 4.85 percentage, but the department of state collects an extra 1.25 percentage in mandate taxes that are distributed to local governments, in addition to local anesthetic choice taxes imposed by localities. ) [ 4 ]

Local Rates

The five states with the highest average local sales tax rates are Alabama ( 5.24 percentage ), Louisiana ( 5.10 percentage ), Colorado ( 4.88 percentage ), New York ( 4.52 percentage ), and Oklahoma ( 4.47 percentage ) .
No states saw rank changes of more than one target since July. [ 5 ] Minnesota moved from 18th to 17th highest, largely because of an increase in Washington County ’ s dedicated Transit Sales and Use Tax from 0.25 to 0.5 percentage in October of 2021. [ 6 ] Beaufort County, South Carolina, saw the end of its 1 percentage transportation tax at the end of 2021, helping improve the state ’ s social station from 17th to 18th. [ 7 ]
It must be noted that some cities in New Jersey are in “ Urban Enterprise Zones, ” where qualifying sellers may collect and remit at half the 6.625 percentage statewide sales tax pace ( 3.3125 percentage ), a policy designed to help local retailers compete with neighboring Delaware, which forgoes a sales tax. We represent this anomaly as a negative 0.03 percentage statewide average local anesthetic rate ( adjusting for population as described in the methodology section below ), and the compound rate reflects this subtraction. Despite the slenderly favorable impact on the overall rate, this lower rate represents an implicit citation by New Jersey officials that their 6.625 percentage statewide rate is uncompetitive with neighboring Delaware, which has no sales tax .

State & Local Sales Tax Rates, as of January 1, 2022
State State Tax Rate Rank Avg. Local Tax Rate (a) Combined Rate Rank Max Local Tax Rate
Alabama 4.00% 40 5.24% 9.24% 5 7.50%
Alaska 0.00% 46 1.76% 1.76% 46 7.50%
Arizona 5.60% 28 2.80% 8.40% 11 5.60%
Arkansas 6.50% 9 2.97% 9.47% 3 6.125%
California (b) 7.25% 1 1.57% 8.82% 7 2.50%
Colorado 2.90% 45 4.87% 7.77% 16 8.30%
Connecticut 6.35% 12 0.00% 6.35% 33 0.00%
Delaware 0.00% 46 0.00% 0.00% 47 0.00%
D.C. 6.00% (17) 0.00% 6.000% (38) 0.00%
Florida 6.00% 17 1.01% 7.01% 23 2.00%
Georgia 4.00% 40 3.35% 7.35% 19 4.90%
Hawaii (c) 4.00% 40 0.44% 4.44% 45 0.50%
Idaho 6.00% 17 0.02% 6.02% 37 3.00%
Illinois 6.25% 13 2.56% 8.81% 8 4.75%
Indiana 7.00% 2 0.00% 7.00% 24 0.00%
Iowa 6.00% 17 0.94% 6.94% 28 1.00%
Kansas 6.50% 9 2.20% 8.70% 9 4.00%
Kentucky 6.00% 17 0.00% 6.00% 38 0.00%
Louisiana 4.45% 38 5.10% 9.55% 1 7.00%
Maine 5.50% 29 0.00% 5.50% 42 0.00%
Maryland 6.00% 17 0.00% 6.00% 38 0.00%
Massachusetts 6.25% 13 0.00% 6.25% 35 0.00%
Michigan 6.00% 17 0.00% 6.00% 38 0.00%
Minnesota 6.875% 6 0.61% 7.49% 17 2.00%
Mississippi 7.00% 2 0.07% 7.07% 22 1.00%
Missouri 4.225% 39 4.06% 8.29% 12 5.763%
Montana (d) 0.00% 46 0.00% 0.00% 47 0.00%
Nebraska 5.50% 29 1.44% 6.94% 29 2.50%
Nevada 6.85% 7 1.38% 8.23% 13 1.53%
New Hampshire 0.00% 46 0.00% 0.00% 47 0.00%
New Jersey (e) 6.625% 8 -0.03% 6.60% 30 3.313%
New Mexico (c) 5.125% 32 2.71% 7.84% 15 4.313%
New York 4.00% 40 4.52% 8.52% 10 4.875%
North Carolina 4.75% 35 2.23% 6.98% 26 2.75%
North Dakota 5.00% 33 1.96% 6.96% 27 3.50%
Ohio 5.75% 27 1.47% 7.22% 20 2.25%
Oklahoma 4.50% 36 4.47% 8.97% 6 7.00%
Oregon 0.00% 46 0.00% 0.00% 47 0.00%
Pennsylvania 6.00% 17 0.34% 6.34% 34 2.00%
Rhode Island 7.00% 2 0.00% 7.00% 24 0.00%
South Carolina 6.00% 17 1.44% 7.44% 18 3.00%
South Dakota (c) 4.50% 36 1.90% 6.40% 32 4.50%
Tennessee 7.00% 2 2.55% 9.55% 2 2.75%
Texas 6.25% 13 1.95% 8.20% 14 2.00%
Utah (b) 6.10% 16 1.09% 7.19% 21 2.95%
Vermont 6.00% 17 0.24% 6.24% 36 1.00%
Virginia (b) 5.30% 31 0.45% 5.75% 41 0.70%
Washington 6.50% 9 2.79% 9.29% 4 4.00%
West Virginia 6.00% 17 0.52% 6.52% 31 1.00%
Wisconsin 5.00% 33 0.43% 5.43% 43 1.75%
Wyoming 4.00% 40 1.22% 5.22% 44 2.00%
( a ) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate .
( bel ) Three states levy mandatary, statewide, local anesthetic accessory sales taxes at the express level : California ( 1 % ), Utah ( 1.25 % ), and Virginia ( 1 % ). We include these in their state sales tax .
( c ) The sales taxes in Hawaii, New Mexico, and South Dakota have broad bases that include many business-to-business services .
( five hundred ) special taxes in local anesthetic haunt areas are not counted here .
( einsteinium ) Salem County, N.J., is not topic to the statewide sales tax pace and collects a local pace of 3.3125 %. New Jersey ’ s local score is represented as a negative .
Sources : Sales Tax Clearinghouse ; Tax Foundation calculations ; State Revenue Department websites .

The Role of Competition in Setting Sales Tax Rates

avoidance of sales tax is most probable to occur in areas where there is a meaning difference between jurisdictions ’ rates. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs. [ 8 ] For exercise, testify suggests that Chicago-area consumers make major purchases in surrounding suburbs or on-line to avoid Chicago ’ s 10.25 percentage sales tax rate. [ 9 ]
At the statewide level, businesses sometimes locate equitable outside the borders of high sales-tax areas to avoid being subjected to their rates. A austere example of this occurs in New England, where even though I-91 runs up the Vermont side of the Connecticut River, many more retail establishments choose to locate on the New Hampshire side to avoid sales taxes. One learn shows that per caput sales in bound counties in sales tax-exempt New Hampshire have tripled since the belated 1950s, while per head sales in boundary line counties in Vermont have remained stagnant. [ 10 ] At one time, Delaware actually used its highway welcome signal to remind motorists that Delaware is the “ Home of Tax-Free Shopping. ” [ 11 ]
express and local governments should be timid about raising rates besides high relative to their neighbors because doing so will yield less gross than expected or, in extreme cases, gross losses despite the higher tax rate .

Sales Tax Bases: The Other Half of the Equation

This report card ranks states based on tax rates and does not account for differences in tax bases ( for example, the structure of sales taxes, defining what is taxable and nontaxable ). States can vary greatly in this respect. For case, most states nontaxable groceries from the sales tax, others tax groceries at a express rate, and still others tax groceries at the like rate as all other products. [ 12 ] Some states exempt clothing or tax it at a reduce rate. [ 13 ]
tax experts broadly recommend that sales taxes apply to all concluding retail sales of goods and services but not intermediate business-to-business transactions in the production range. These recommendations would result in a tax system that is not alone broad-based but besides “ right-sized, ” applying once and entirely once to each product the commercialize produces. [ 14 ] Despite agreement in theory, the application of most state of matter sales taxes is army for the liberation of rwanda from this ideal. [ 15 ]
Hawaii has the broadest sales tax in the United States, but it taxes many products multiple times and, by one calculate, ultimately taxes 119 percentage of the state ’ s personal income. [ 16 ] This base is far wider than the national median, where the sales tax applies to 36 percentage of personal income. [ 17 ]

Methodology

Sales Tax Clearinghouse publishes quarterly sales tax data at the state of matter, county, and city levels by ZIP code. We weight these numbers according to Census 2010 population figures to give a smell of the prevalence of sales tax rates in a particular express.

It is worth noting that population numbers are lone published at the ZIP code charge every 10 years by the U.S. Census Bureau, and that editions of this calculation published before July 1, 2011, do not utilize ZIP code data and are thus not strictly comparable. ZIP code degree data for the 2020 Census is not so far available, so the current edition continues to use 2010 Census numbers .
It should besides be noted that while the Census Bureau reports population data using a five-digit identifier that looks much like a ZIP code, this is actually what is called a ZIP Code Tabulation Area ( ZCTA ), which attempts to create a geographic area associated with a given ZIP code. This is done because a surprisingly large act of ZIP codes do not actually have any residents. For exemplar, the National Press Building in Washington, D.C., has its own ZIP code entirely for postal reasons .
For our purposes, ZIP codes that do not have a comparable ZCTA population figure are omitted from calculations. These omissions result in some amount of inexactness but overall do not have a palpable effect on attendant averages because proximate ZIP code areas which do have ZCTA population numbers capture the tax pace of those jurisdictions .

Conclusion

Sales taxes are equitable one part of an overall tax social organization and should be considered in context. For example, Tennessee has high sales taxes but no income tax, whereas Oregon has no sales tax but high income taxes. While many factors influence commercial enterprise location and investment decisions, sales taxes are something within policymakers ’ master that can have contiguous impacts .

[ 1 ] particular taxes in Montana ’ s resort areas are not included in our analysis .
[ 2 ] This number includes mandate accessory taxes which are collected by the country but distributed to local governments. Because of this, some sources will describe California ’ s sales tax as 6.0 percentage. A exchangeable position exists in Utah and Virginia .
[ 3 ] The sales taxes in Hawaii and South Dakota have bases that include many services and so are not rigorously comparable to early sales taxes .
[ 4 ] This pace includes two levies, summing 1.25 share points, which are imposed statewide but distributed to localities. See “ Second Quarter 2019 Changes, ” Utah State Tax Commission, Apr. 1, 2019, hypertext transfer protocol : //tax.utah.gov/sales/ratechanges .
[ 5 ] Illinois ranks 8th highest, a slender improvement from 7th highest in the July 2021 rankings, but this is due to an error in the beginning data on which we relied for the July effective rate calculations which has since been corrected, and not to any change in sales tax rates .
[ 6 ] Minnesota Department of Revenue, “ Local Sales and Use Taxes, ” November 2021, hypertext transfer protocol : //www.revenue.state.mn.us/sites/default/files/2021-11/FS164.pdf ; Washington County, MN, “ Local Option Sales Tax, ” hypertext transfer protocol : //www.co.washington.mn.us/3143/Local-Option-Sales-Tax .
[ 7 ] Kacen Bayless, “ Beaufort Co. voters say no to sales tax, government change in askew election, ” The Island Packet ( Bluffton, S.C. ), Nov. 3, 2021, hypertext transfer protocol : //www.islandpacket.com/news/politics-government/election/article255479436.html .
[ 8 ] Scott R. Baker, Stephanie Johnson, and Lorenz Kueng, “ Shopping for Lower Sales Tax Rates, ” National Bureau of Economic Research Working Paper 23665, May 2018, hypertext transfer protocol : //www.nber.org/papers/w23665. See besides Mehmet Serkan Tosun and Mark Skidmore, “ Cross-Border Shopping and the Sales tax : A follow-up of Food Purchases in West Virginia, ” Research Paper 2005-7, Regional Research Institute, West Virginia University, September 2005, hypertext transfer protocol : //researchrepository.wvu.edu/rri_pubs/109/, and T. Randolph Beard, Paula A. Gant, and Richard P. Saba, “ Border-Crossing Sales, Tax Avoidance, and State Tax Policies : An application to Alcohol, ” Southern Economic Journal 64:1 ( July 1997 ), 293-306 .
[ 9 ] Susan Chandler, “ The sales tax hedge, ” Chicago Tribune, July 20, 2008, hypertext transfer protocol : //articles.chicagotribune.com/2008-07-20/business/0807190001_1_sales-tax-tax-avoidance-tax-landscape .
[ 10 ] Arthur Woolf, “ The Unintended Consequences of Public Policy Choices : The Connecticut River Valley Economy as a Case Study, ” Northern Economic Consulting, Inc., November 2010, hypertext transfer protocol : //www.documentcloud.org/documents/603373-the-unintended-consequences-of-public-policy.html .
[ 11 ] Len Lazarick, “ Raise taxes, and they ’ ll travel, constituents tell one delegate, ” Marylandreporter.com, Aug. 3, 2011, hypertext transfer protocol : //marylandreporter.com/2011/08/03/raise-taxes-and-theyll-move-constituents-tell-one-delegate/ .
[ 12 ] For a number, see Janelle Cammenga and Jared Walczak, 2022 State Business Tax Climate Index, Tax Foundation, Dec. 16, 2021, hypertext transfer protocol : //www.peterswar.net/2021-state-business-tax-climate-index/ .
[ 13 ] Liz Malm and Richard Borean, “ How Does Your State Sales Tax See That Blue and Black ( or White and Gold ) Dress ? ” Tax Foundation, Feb. 27, 2015, hypertext transfer protocol : //taxfoundation.org/blog/how-does-your-state-sales-tax-see-blue-and-black-or-white-and-gold-dress .
[ 14 ] Justin M. Ross, “ A Primer on State and Local Tax policy : Trade-Offs among Tax Instruments, ” Mercatus Center at George Mason University, Feb. 25, 2014, hypertext transfer protocol : //mercatus.org/publication/primer-state-and-local-tax-policy-trade-offs-among-tax-instruments.

[ 15 ] For a representative list, see Jared Walczak and Janelle Cammenga, 2021 State Business Tax Climate Index .
[ 16 ] Janelle Cammenga, Facts and Figures 2021 : How Does Your State Compare ? table 22, Tax Foundation, Mar. 10, 2021, hypertext transfer protocol : //www.taxfoundation.org/publications/facts-and-figures .
[ 17 ] Id .

reservoir : https://www.peterswar.net
Category : Finance

Related Posts

How to Calculate Credit Card Interest Rates

interest rates are one of the ways to work out how much it will cost you to use your credit card, along with other charges and fees….

What debt collectors can & cannot do

If you are dealing with a debt collector, you have protections under the law. A debt collector must not mislead, harass, coerce or act unconscionably towards you….

Can You Afford a New Home? How to Determine Your Homebuying Budget

Can You Afford a New Home? How to Determine Your Homebuying Budget As with any major purchase, determining what you can afford before you look for a…

Why Did My Credit Score Drop?

Why Did My Credit Score Go Down When Nothing Changed? sometimes your mark does change based on factors outside of your control, but most times your behavior…

Why Do I Owe Taxes To The IRS & How To Avoid Them

Are you wondering why you owe indeed much in taxes this year ? Want to make certain you never owe a big tax bill – or any…

The 5 reasons why your credit score might suddenly drop

Select ’ s editorial team works independently to review fiscal products and write articles we think our readers will find useful. We earn a perpetration from affiliate…