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Best and Worst States for Sales Taxes


Sales tax makes everything you buy just a little more expensive.  And it’s not just state sales tax you have to worry about, some counties and cities tack on their own sales taxes in addition to the state sales tax.  So, where will you have to shell out more money each time you go shopping?   

The Tax Foundation, a non-partisan tax research group out of Washington D.C., has released a report that calculates each state’s average combined state and local sales tax rate, resulting in a list of the best and worst states for sales taxes.

States With the Lowest Sales Taxes

The obvious front runners are the states with no state or local sales tax, which are Delaware, Montana, New Hampshire and Oregon.  Alaska comes next with an average local sales tax rate of 1.11%.  Rounding out the top ten states with the lowest sales taxes are Hawaii (4.35%), Maine (5%), Virginia (5%), Wyoming (5.17%) and South Dakota (5.22%).

States With the Highest Sales Taxes

Tennessee came in as the state with the highest combined state and local sales tax rate with a top combined rate of 9.44%.  After Tennessee, the states with the highest state and local sales tax rates are California (9.08%), Arizona (9.01%), Louisiana (8.69%), Washington (8.61%), New York (8.52%), Oklahoma (8.33%), Illinois (8.22%), Arkansas (8.10%) and Alabama (8.03%).

Major Cities with High Sales Taxes

Along with the state sales tax report, the Tax Foundation also studied sales tax rates in the 107 major U.S. cities with populations over 200,000.  This study found that the cities with the highest combined state, county, and city sales taxes are Birmingham, AL (10%), Montgomery, AL (10%), Long Beach, CA (9.75%), Los Angeles, CA (9.75%), Oakland, CA (9.75%), Fremont, CA (9.75%), Chicago, IL (9.75%), Glendale, AZ (9.6%), Seattle, WA (9.5%) and San Francisco, CA (9.5%). 

More information: Full state sales tax report , Full city sales tax report

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