State and Local Sales Tax Rates Midyear 2014

Source: Scott Drenkard, Liz Emanuel, Jordan Yahiro, Tax Foundation, Fiscal Fact No. 438, September 2014

Key Findings
– 45 states collect statewide sales taxes.
– 38 states collect local sales taxes.
– The five states with the highest average combined state-local sales tax rates are Tennessee (9.45 percent), Arkansas (9.24 percent), Louisiana (8.91 percent), Washington (8.88 percent), and Alabama (8.85 percent).
– Sales taxes rates differ by state, but sales tax bases also impact how much revenue is collected from a tax and how the tax effects the economy.
– The District of Columbia successfully expanded its sales tax to include some services, which allowed reductions in its individual and corporate income tax rates.
– Differences in sales tax rates cause consumers to shop across borders or buy products online.