Special Report
States With the Highest (and Lowest) Sales Taxes
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The deadline for filing income tax returns is less than a few weeks away. In addition to income taxes, Americans pay property and general sales taxes as well, which also account for a significant share of taxes paid each year. State and local governments collect more than $1,000 per person each year through sales taxes.
State and regional sales tax rates can cause the total amount Americans pay to vary significantly. In Tennessee, for example, consumers are taxed close to 10 cents on the dollar for retail items and food. The state levies a 7% sales tax on a variety of goods and services, and local sales taxes add an additional 2.5%, on average, to the combined rate. Five states do not levy any sales tax, in four which the typical resident pays no local tax either.
As opposed to income and property taxes, Americans never see their final sales tax bill, and so many may be unaware of the role it plays in the budgets of many state and local governments. While individual income tax collections account for at least 30% of total tax revenue in eight states, sales taxes account for at least 30% of state revenue in 13 states.
Click here to see the states with the highest (and lowest) sales taxes.
In order to balance budgets, states and municipalities must make a decision as to how they will tax their populations. For example, many of the states that levy low income tax rates or none at all tend to have higher property tax rates. Similarly, of the seven states that levy no income tax, all but Alaska rely far more on sales taxes than other states.
The decision to levy a higher or lower tax is often a matter of intense political debate. The sales tax in particular is widely considered a regressive tax, because lower-income individuals tend to spend a greater share of their total income on necessities compared to more affluent Americans.
By contrast, the income tax, which is assessed in graduated income brackets, is considered relatively progressive. The result is that higher income individuals pay a greater share of their income than those who earn less.
Others argue that sales taxes are ideal because they are levied evenly and avoid the waste from the dazzlingly complex administrative framework necessary to levy income, property, and corporate taxes. Many have argued in favor of eliminating the federal income tax altogether, implementing a single, flat, nationwide sales tax.
Sales taxes can also affect consumer behavior. While a higher tax rate can produce greater revenues for the government, some make the argument that it dissuades state residents and tourists alike from spending money on local businesses. And the opposite may be true as well. For example, thousands of visitors travel each year to New Hampshire, which levies no sales tax, for the sole purpose of buying goods at a discount.
In fact, consumers in states with little or no sales tax tend to spend more each year on food. Each year, the average American spends $2,780 on food and beverages. Residents in all but one of the 10 states with the lowest state and local sales tax rates, on the other hand, spend more than $3,000 on average in off-premise food and beverages.
24/7 Wall St. reviewed tax data on state and local sales tax rates and collections from tax research group the Tax Foundation’s report, Facts & Figures 2016. State and local sales tax rates are as of January 1, 2016. The combined sales tax rate is based on an average local rate, as calculated by the Tax Foundation, combined with the statewide rate. State sales, individual, as well as corporate income tax collections per capita are from 2014. General sales tax rates and per capita collections are from January 1, 2016 and 2014 respectively. Excise tax data, including gasoline tax rates, are also as of January 1, 2016. We also looked at per capita personal consumption data as of 2014 from the Bureau of Economic Analysis (BEA).
These are the states with the highest and lowest sales tax rates.
50. Delaware
> Combined sales tax rate: N/A
> State sales tax rate: N/A
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: N/A
> State & local property tax collections per capita: $825 (7th lowest)
> State income tax collections per capita: $1,112 (14th highest)
49. Montana
> Combined sales tax rate: N/A
> State sales tax rate: N/A
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: N/A
> State & local property tax collections per capita: $1,407 (20th highest)
> State income tax collections per capita: $1,039 (19th highest)
48. New Hampshire
> Combined sales tax rate: N/A
> State sales tax rate: N/A
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: N/A
> State & local property tax collections per capita: $2,690 (3rd highest)
> State income tax collections per capita: $70 (9th lowest)
47. Oregon
> Combined sales tax rate: N/A
> State sales tax rate: N/A
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: N/A
> State & local property tax collections per capita: $1,285 (25th lowest)
> State income tax collections per capita: $1,674 (6th highest)
46. Alaska
> Combined sales tax rate: 1.8% (5th lowest)
> State sales tax rate: N/A
> Avg. local sales tax rate: 1.8% (19th highest)
> State and local sales tax collections per capita: $294 (5th lowest)
> State & local property tax collections per capita: $1,913 (10th highest)
> State income tax collections per capita: $0 (7th lowest)
45. Hawaii
> Combined sales tax rate: 4.4% (6th lowest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 0.4% (20th lowest)
> State and local sales tax collections per capita: $2,214 (the highest)
> State & local property tax collections per capita: $943 (13th lowest)
> State income tax collections per capita: $1,229 (11th highest)
44. Wisconsin
> Combined sales tax rate: 5.4% (7th lowest)
> State sales tax rate: 5.0% (18th lowest)
> Avg. local sales tax rate: 0.4% (22nd lowest)
> State and local sales tax collections per capita: $831 (18th lowest)
> State & local property tax collections per capita: $1,843 (12th highest)
> State income tax collections per capita: $1,180 (12th highest)
43. Wyoming
> Combined sales tax rate: 5.4% (8th lowest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 1.4% (20th highest)
> State and local sales tax collections per capita: $1,489 (4th highest)
> State & local property tax collections per capita: $2,173 (7th highest)
> State income tax collections per capita: $0 (7th lowest)
42. Maine
> Combined sales tax rate: 5.5% (9th lowest)
> State sales tax rate: 5.5% (22nd lowest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $807 (16th lowest)
> State & local property tax collections per capita: $1,907 (11th highest)
> State income tax collections per capita: $1,063 (16th highest)
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41. Virginia
> Combined sales tax rate: 5.6% (10th lowest)
> State sales tax rate: 5.3% (20th lowest)
> Avg. local sales tax rate: 0.3% (18th lowest)
> State and local sales tax collections per capita: $593 (7th lowest)
> State & local property tax collections per capita: $1,430 (18th highest)
> State income tax collections per capita: $1,306 (8th highest)
40. South Dakota
> Combined sales tax rate: 5.8% (11th lowest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 1.8% (17th highest)
> State and local sales tax collections per capita: $1,398 (8th highest)
> State & local property tax collections per capita: $1,231 (24th lowest)
> State income tax collections per capita: N/A
39. Michigan
> Combined sales tax rate: 6.0% (14th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $855 (20th lowest)
> State & local property tax collections per capita: $1,320 (25th highest)
> State income tax collections per capita: $794 (20th lowest)
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38. Maryland
> Combined sales tax rate: 6.0% (14th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: N/A (13th lowest)
> State and local sales tax collections per capita: $693 (10th lowest)
> State & local property tax collections per capita: $1,504 (17th highest)
> State income tax collections per capita: $1,301 (9th highest)
37. Kentucky
> Combined sales tax rate: 6.0% (14th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: N/A (13th lowest)
> State and local sales tax collections per capita: $687 (9th lowest)
> State & local property tax collections per capita: $732 (5th lowest)
> State income tax collections per capita: $850 (23rd lowest)
36. Idaho
> Combined sales tax rate: 6.0% (15th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $821 (17th lowest)
> State & local property tax collections per capita: $888 (10th lowest)
> State income tax collections per capita: $818 (21st lowest)
35. Vermont
> Combined sales tax rate: 6.2% (16th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 0.2% (16th lowest)
> State and local sales tax collections per capita: $571 (6th lowest)
> State & local property tax collections per capita: $2,331 (5th highest)
> State income tax collections per capita: $1,077 (15th highest)
34. West Virginia
> Combined sales tax rate: 6.2% (17th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 0.2% (17th lowest)
> State and local sales tax collections per capita: $677 (8th lowest)
> State & local property tax collections per capita: $798 (6th lowest)
> State income tax collections per capita: $958 (23rd highest)
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33. Massachusetts
> Combined sales tax rate: 6.3% (18th lowest)
> State sales tax rate: 6.3% (13th highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $773 (13th lowest)
> State & local property tax collections per capita: $2,069 (8th highest)
> State income tax collections per capita: $1,961 (3rd highest)
32. Pennsylvania
> Combined sales tax rate: 6.3% (19th lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 0.3% (19th lowest)
> State and local sales tax collections per capita: $778 (14th lowest)
> State & local property tax collections per capita: $1,376 (21st highest)
> State income tax collections per capita: $845 (22nd lowest)
31. Connecticut
> Combined sales tax rate: 6.4% (20th lowest)
> State sales tax rate: 6.4% (12th highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $1,072 (20th highest)
> State & local property tax collections per capita: $2,726 (2nd highest)
> State income tax collections per capita: $2,162 (2nd highest)
30. Florida
> Combined sales tax rate: 6.7% (21st lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 0.7% (23rd lowest)
> State and local sales tax collections per capita: $1,155 (18th highest)
> State & local property tax collections per capita: $1,216 (23rd lowest)
> State income tax collections per capita: $0 (7th lowest)
29. Utah
> Combined sales tax rate: 6.7% (22nd lowest)
> State sales tax rate: 6.0% (25th lowest)
> Avg. local sales tax rate: 0.7% (24th lowest)
> State and local sales tax collections per capita: $873 (21st lowest)
> State & local property tax collections per capita: $952 (14th lowest)
> State income tax collections per capita: $981 (22nd highest)
28. Iowa
> Combined sales tax rate: 6.8% (23rd lowest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 0.8% (25th lowest)
> State and local sales tax collections per capita: $913 (24th lowest)
> State & local property tax collections per capita: $1,515 (16th highest)
> State income tax collections per capita: $1,028 (21st highest)
27. Nevada
> Combined sales tax rate: 6.8% (24th lowest)
> State sales tax rate: 5.0% (18th lowest)
> Avg. local sales tax rate: 1.8% (18th highest)
> State and local sales tax collections per capita: $1,425 (6th highest)
> State & local property tax collections per capita: $972 (16th lowest)
> State income tax collections per capita: N/A
26. North Carolina
> Combined sales tax rate: 6.9% (25th lowest)
> State sales tax rate: 5.5% (22nd lowest)
> Avg. local sales tax rate: 1.4% (22nd highest)
> State and local sales tax collections per capita: $795 (15th lowest)
> State & local property tax collections per capita: $903 (12th lowest)
> State income tax collections per capita: $1,045 (18th highest)
25. Nebraska
> Combined sales tax rate: 6.9% (25th highest)
> State sales tax rate: 4.8% (16th lowest)
> Avg. local sales tax rate: 2.2% (14th highest)
> State and local sales tax collections per capita: $1,075 (19th highest)
> State & local property tax collections per capita: $1,649 (13th highest)
> State income tax collections per capita: $1,128 (13th highest)
24. New Jersey
> Combined sales tax rate: 7.0% (24th highest)
> State sales tax rate: 7.0% (2nd highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $949 (23rd highest)
> State & local property tax collections per capita: $2,989 (the highest)
> State income tax collections per capita: $1,340 (7th highest)
23. Indiana
> Combined sales tax rate: 7.0% (22nd highest)
> State sales tax rate: 7.0% (2nd highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $1,034 (22nd highest)
> State & local property tax collections per capita: $968 (15th lowest)
> State income tax collections per capita: $742 (18th lowest)
22. Rhode Island
> Combined sales tax rate: 7.0% (22nd highest)
> State sales tax rate: 7.0% (2nd highest)
> Avg. local sales tax rate: N/A
> State and local sales tax collections per capita: $837 (19th lowest)
> State & local property tax collections per capita: $2,282 (6th highest)
> State income tax collections per capita: $1,032 (20th highest)
21. Georgia
> Combined sales tax rate: 7.0% (21st highest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 3.0% (7th highest)
> State and local sales tax collections per capita: $916 (25th highest)
> State & local property tax collections per capita: $1,011 (19th lowest)
> State income tax collections per capita: $888 (24th highest)
20. Mississippi
> Combined sales tax rate: 7.1% (20th highest)
> State sales tax rate: 7.0% (2nd highest)
> Avg. local sales tax rate: 0.1% (15th lowest)
> State and local sales tax collections per capita: $1,067 (21st highest)
> State & local property tax collections per capita: $899 (11th lowest)
> State income tax collections per capita: $557 (11th lowest)
19. Ohio
> Combined sales tax rate: 7.1% (19th highest)
> State sales tax rate: 5.8% (24th lowest)
> Avg. local sales tax rate: 1.4% (21st highest)
> State and local sales tax collections per capita: $915 (25th lowest)
> State & local property tax collections per capita: $1,215 (22nd lowest)
> State income tax collections per capita: $726 (17th lowest)
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18. South Carolina
> Combined sales tax rate: 7.2% (18th highest)
> State sales tax rate: 6.0% (16th highest)
> Avg. local sales tax rate: 1.2% (23rd highest)
> State and local sales tax collections per capita: $749 (11th lowest)
> State & local property tax collections per capita: $1,077 (20th lowest)
> State income tax collections per capita: $709 (16th lowest)
17. Minnesota
> Combined sales tax rate: 7.3% (17th highest)
> State sales tax rate: 6.9% (7th highest)
> Avg. local sales tax rate: 0.4% (21st lowest)
> State and local sales tax collections per capita: $946 (24th highest)
> State & local property tax collections per capita: $1,547 (15th highest)
> State income tax collections per capita: $1,746 (5th highest)
16. New Mexico
> Combined sales tax rate: 7.5% (16th highest)
> State sales tax rate: 5.1% (19th lowest)
> Avg. local sales tax rate: 2.4% (13th highest)
> State and local sales tax collections per capita: $1,403 (7th highest)
> State & local property tax collections per capita: $685 (4th lowest)
> State income tax collections per capita: $622 (13th lowest)
15. Colorado
> Combined sales tax rate: 7.5% (15th highest)
> State sales tax rate: 2.9% (6th lowest)
> Avg. local sales tax rate: 4.6% (3rd highest)
> State and local sales tax collections per capita: $1,162 (16th highest)
> State & local property tax collections per capita: $1,333 (24th highest)
> State income tax collections per capita: $1,057 (17th highest)
14. Missouri
> Combined sales tax rate: 7.9% (14th highest)
> State sales tax rate: 4.2% (14th lowest)
> Avg. local sales tax rate: 3.6% (6th highest)
> State and local sales tax collections per capita: $880 (22nd lowest)
> State & local property tax collections per capita: $977 (17th lowest)
> State income tax collections per capita: $884 (25th highest)
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13. North Dakota
> Combined sales tax rate: 8.0% (13th highest)
> State sales tax rate: 6.9% (8th highest)
> Avg. local sales tax rate: 1.1% (24th highest)
> State and local sales tax collections per capita: $2,024 (2nd highest)
> State & local property tax collections per capita: $1,140 (21st lowest)
> State income tax collections per capita: $674 (15th lowest)
12. Texas
> Combined sales tax rate: 8.2% (12th highest)
> State sales tax rate: 6.3% (13th highest)
> Avg. local sales tax rate: 1.9% (16th highest)
> State and local sales tax collections per capita: $1,231 (14th highest)
> State & local property tax collections per capita: $1,560 (14th highest)
> State income tax collections per capita: N/A
11. Arizona
> Combined sales tax rate: 8.2% (11th highest)
> State sales tax rate: 5.6% (23rd lowest)
> Avg. local sales tax rate: 2.6% (9th highest)
> State and local sales tax collections per capita: $1,361 (9th highest)
> State & local property tax collections per capita: $1,009 (18th lowest)
> State income tax collections per capita: $515 (10th lowest)
10. California
> Combined sales tax rate: 8.5% (10th highest)
> State sales tax rate: 7.5% (the highest)
> Avg. local sales tax rate: 1.0% (25th highest)
> State and local sales tax collections per capita: $1,159 (17th highest)
> State & local property tax collections per capita: $1,365 (22nd highest)
> State income tax collections per capita: $1,753 (4th highest)
9. New York
> Combined sales tax rate: 8.5% (9th highest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 4.5% (4th highest)
> State and local sales tax collections per capita: $1,310 (10th highest)
> State & local property tax collections per capita: $2,494 (4th highest)
> State income tax collections per capita: $2,176 (the highest)
8. Kansas
> Combined sales tax rate: 8.6% (8th highest)
> State sales tax rate: 6.5% (9th highest)
> Avg. local sales tax rate: 2.1% (15th highest)
> State and local sales tax collections per capita: $1,307 (11th highest)
> State & local property tax collections per capita: $1,425 (19th highest)
> State income tax collections per capita: $865 (24th lowest)
7. Illinois
> Combined sales tax rate: 8.6% (7th highest)
> State sales tax rate: 6.3% (13th highest)
> Avg. local sales tax rate: 2.4% (11th highest)
> State and local sales tax collections per capita: $759 (12th lowest)
> State & local property tax collections per capita: $1,982 (9th highest)
> State income tax collections per capita: $1,247 (10th highest)
6. Oklahoma
> Combined sales tax rate: 8.8% (6th highest)
> State sales tax rate: 4.5% (15th lowest)
> Avg. local sales tax rate: 4.3% (5th highest)
> State and local sales tax collections per capita: $1,171 (15th highest)
> State & local property tax collections per capita: $595 (2nd lowest)
> State income tax collections per capita: $764 (19th lowest)
5. Washington
> Combined sales tax rate: 8.9% (5th highest)
> State sales tax rate: 6.5% (9th highest)
> Avg. local sales tax rate: 2.4% (12th highest)
> State and local sales tax collections per capita: $1,978 (3rd highest)
> State & local property tax collections per capita: $1,350 (23rd highest)
> State income tax collections per capita: N/A
4. Alabama
> Combined sales tax rate: 9.0% (4th highest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 5.0% (2nd highest)
> State and local sales tax collections per capita: $902 (23rd lowest)
> State & local property tax collections per capita: $548 (the lowest)
> State income tax collections per capita: $662 (14th lowest)
3. Louisiana
> Combined sales tax rate: 9.0% (3rd highest)
> State sales tax rate: 4.0% (13th lowest)
> Avg. local sales tax rate: 5.0% (the highest)
> State and local sales tax collections per capita: $1,465 (5th highest)
> State & local property tax collections per capita: $849 (9th lowest)
> State income tax collections per capita: $592 (12th lowest)
2. Arkansas
> Combined sales tax rate: 9.3% (2nd highest)
> State sales tax rate: 6.5% (9th highest)
> Avg. local sales tax rate: 2.8% (8th highest)
> State and local sales tax collections per capita: $1,303 (12th highest)
> State & local property tax collections per capita: $659 (3rd lowest)
> State income tax collections per capita: $877 (25th lowest)
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1. Tennessee
> Combined sales tax rate: 9.5% (the highest)
> State sales tax rate: 7.0% (2nd highest)
> Avg. local sales tax rate: 2.5% (10th highest)
> State and local sales tax collections per capita: $1,247 (13th highest)
> State & local property tax collections per capita: $838 (8th lowest)
> State income tax collections per capita: $37 (8th lowest)
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