Sales Taxes Highest in Tennessee

Sales Taxes Highest in Tennessee, Arizona

“High tax” state New York has a sales tax rate of just 4 percent, second lowest among all states that do impose a statewide sales tax, but residents of the Empire State actually pay an average of 8.48 percent, one of the highest rates in the nation.

That’s because the average local (city or county) sales tax rate is 4.48, highest of all states except Colorado, at 4.58 percent.

The highest sales tax rate in the United States — including the state tax rate and the average local tax rate — is 9.43 percent in Tennessee.

But residents of four states pay no sales tax at all — Delaware, Montana, New Hampshire, and Oregon.

Alaska also has no state sales tax, but local rates average 1.74 percent.

While most Americans “have at least some idea of the sales tax in their state,” nearly three-quarters of states have some local sales taxes “that may be less known to residents, with rates varying from county to county,” the Tax Foundation observed.

The highest state tax rate is in California, 7.25 percent, including a mandatory statewide local add-on sales tax, and five states have the second-highest rate of 7 percent: Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee.

But when average local taxes are factored in, the highest sales tax rates after Tennessee are in Arizona (9.12 percent), Louisiana (8.84 percent), (Washington (8.79 percent), and Oklahoma (8.66 percent).

While Colorado has a 4.58 percent average local rate, Colorado residents enjoy a state tax rate of just 2.9 percent, lowest in the nation among non-zero states. Six other states in addition to New York follow with 4 percent: Alabama, Georgia, Hawaii, Louisiana, South Dakota, and Wyoming, according to a Tax Foundation analysis.

The five states 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).

The highest total sales tax in the U.S. is in Tuba City, Ariz., 13.725 percent, according to Vertex Inc., a leading provider of tax software. That includes a 6.6 percent state tax, a 1.125 percent county tax, and an additional 6 percent tribal tax levied by the local government.