Michael B. Sauter, 24/7 Wall Street, USA TODAY
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On or before April 17, millions of Americans will file their income, property, and other taxes. Not included in the filings are sales taxes, but many Americans pay thousands of dollars each year in state and local taxes on goods purchased.
Americans pay between 2.9% and 7.25% of the price of the goods they buy in the majority of states. A few states, however, levy no sales tax whatsoever. On average, across all states, sales taxes actually account for a larger share of total revenue than either property or individual income tax.
The sales tax for many is controversial, because unlike the property tax, income tax, or corporate taxes, it is not taxed on a scale but as a flat percentage of the total assessed figure. This system is referred to as a regressive tax, because its burden is higher on lower-income taxpayers.
Critics of flat sales taxes argue that poor people for whom basic necessities like groceries represent a significantly larger share of their budget are greatly affected by sales taxes than wealthier people who spend less on necessities as a proportion of their income. Proponents of the tax suggest that a flat tax is the most just and least complex.
In addition to state sales taxes, local governments can charge their own sales taxes, which can average as high as an additional 5% in some states, and are nonexistent in others. In some of the states with the lowest statewide sales tax figure, average local taxes are among the highest. Louisiana levies a 5% statewide rate, which is less than that of the majority of states. However, the average combined state and local sales taxes in Louisiana surpass 10%.
Many states balance revenue of a number of taxes, including income, sales, and property taxes. A few states opt out of one or more major types of taxation entirely. In New Hampshire, where there is no sales tax, the state levies the highest per capita corporate taxes of any state.
To determine the states with the highest and lowest sales tax, 24/7 Wall St. reviewed sales tax rates from the Tax Foundation’s State and Local Sales Tax Rates in 2017 report. Combined sales tax figures include statewide sales tax as well as the average local sales tax for residents as of Jan. 1, 2017. Regional price parity data comes from the Bureau of Economic Analysis for 2014. Personal income per capita is also from the BEA for the third quarter of 2016. In New Jersey, the average local tax is -0.03%, because businesses in Salem County are exempt from collecting state sales taxes.
50. Delaware
Combined sales tax: 0.0%
State sales tax: 0.0% (tied–the lowest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: 0.4% more than nat’l avg. (14th highest)
Personal income per capita: $42,917 (22nd lowest)
49. Montana
Combined sales tax: 0.0%
State sales tax: 0.0% (tied–the lowest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -5.2% less than nat’l avg. (24th lowest)
Personal income per capita: $40,985 (16th lowest)
48. New Hampshire
Combined sales tax: 0.0%
State sales tax: 0.0% (tied–the lowest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: 5.0% more than nat’l avg. (9th highest)
Personal income per capita: $47,530 (11th highest)
47. Oregon
Combined sales tax: 0.0%
State sales tax: 0.0% (tied–the lowest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -0.8% less than nat’l avg. (17th highest)
Personal income per capita: $40,881 (15th lowest)
46. Alaska
Combined sales tax: 1.8%
State sales tax: 0.0% (tied–the lowest)
Avg. local sales tax: 1.8% (19th highest)
Cost of living: 5.6% more than nat’l avg. (8th highest)
Personal income per capita: $48,973 (7th highest)
45. Hawaii
Combined sales tax: 4.3%
State sales tax: 4.0% (tied–7th lowest)
Avg. local sales tax: 0.4% (19th lowest)
Cost of living: 18.8% more than nat’l avg. (the highest)
Personal income per capita: $37,634 (5th lowest)
44. Wisconsin
Combined sales tax: 5.4%
State sales tax: 5.0% (tied–16th lowest)
Avg. local sales tax: 0.4% (21st lowest)
Cost of living: -6.9% less than nat’l avg. (20th lowest)
Personal income per capita: $45,151 (21st highest)
43. Wyoming
Combined sales tax: 5.5%
State sales tax: 4.0% (tied–7th lowest)
Avg. local sales tax: 1.5% (20th highest)
Cost of living: -3.8% less than nat’l avg. (25th highest)
Personal income per capita: $53,512 (4th highest)
42. Maine
Combined sales tax: 5.5%
State sales tax: 5.5% (tied–21st lowest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -2.0% less than nat’l avg. (19th highest)
Personal income per capita: $39,998 (10th lowest)
41. Virginia
Combined sales tax: 5.6%
State sales tax: 5.3% (20th lowest)
Avg. local sales tax: 0.3% (17th lowest)
Cost of living: 2.5% more than nat’l avg. (12th highest)
Personal income per capita: $46,582 (14th highest)
40. Kentucky
Combined sales tax: 6.0%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -11.4% less than nat’l avg. (5th lowest)
Personal income per capita: $39,743 (9th lowest)
More: U.S. economy: A rundown of the poorest county in every state
39. Maryland
Combined sales tax: 6.0%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: 9.6% more than nat’l avg. (5th highest)
Personal income per capita: $46,969 (12th highest)
38. Michigan
Combined sales tax: 6.0%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -6.5% less than nat’l avg. (22nd lowest)
Personal income per capita: $42,173 (19th lowest)
37. Idaho
Combined sales tax: 6.0%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.0% (14th lowest)
Cost of living: -6.6% less than nat’l avg. (21st lowest)
Personal income per capita: $38,074 (7th lowest)
36. Vermont
Combined sales tax: 6.2%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.2% (16th lowest)
Cost of living: 1.6% more than nat’l avg. (13th highest)
Personal income per capita: $44,019 (25th lowest)
35. Massachusetts
Combined sales tax: 6.3%
State sales tax: 6.3% (tied–15th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: 6.9% more than nat’l avg. (7th highest)
Personal income per capita: $53,782 (3rd highest)
More: Economic climate: The best (and worst) states for business
34. Pennsylvania
Combined sales tax: 6.3%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.3% (18th lowest)
Cost of living: -2.1% less than nat’l avg. (21st highest)
Personal income per capita: $46,537 (15th highest)
33. Connecticut
Combined sales tax: 6.4%
State sales tax: 6.4% (12th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: 8.7% more than nat’l avg. (6th highest)
Personal income per capita: $57,520 (the highest)
32. West Virginia
Combined sales tax: 6.4%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.4% (20th lowest)
Cost of living: -11.1% less than nat’l avg. (6th lowest)
Personal income per capita: $37,622 (4th lowest)
31. South Dakota
Combined sales tax: 6.4%
State sales tax: 4.5% (tied–13th lowest)
Avg. local sales tax: 1.9% (17th highest)
Cost of living: -11.8% less than nat’l avg. (4th lowest)
Personal income per capita: $49,463 (6th highest)
30. New Jersey
Combined sales tax: 6.6%
State sales tax: 6.6% (8th highest)
Avg. local sales tax: 0.0% (the lowest)
Cost of living: 13.4% more than nat’l avg. (3rd highest)
Personal income per capita: $48,590 (8th highest)
29. Utah
Combined sales tax: 6.8%
State sales tax: 6.0% (25th lowest)
Avg. local sales tax: 0.8% (25th lowest)
Cost of living: -3.0% less than nat’l avg. (23rd highest)
Personal income per capita: $37,435 (3rd lowest)
28. Florida
Combined sales tax: 6.8%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.8% (24th lowest)
Cost of living: -0.5% less than nat’l avg. (16th highest)
Personal income per capita: $41,781 (18th lowest)
27. Iowa
Combined sales tax: 6.8%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 0.8% (24th lowest)
Cost of living: -9.7% less than nat’l avg. (12th lowest)
Personal income per capita: $46,359 (17th highest)
26. North Dakota
Combined sales tax: 6.8%
State sales tax: 5.0% (tied–16th lowest)
Avg. local sales tax: 1.8% (18th highest)
Cost of living: -7.7% less than nat’l avg. (18th lowest)
Personal income per capita: $54,997 (2nd highest)
25. Nebraska
Combined sales tax: 6.9%
State sales tax: 5.5% (tied–21st lowest)
Avg. local sales tax: 1.4% (22nd highest)
Cost of living: -9.4% less than nat’l avg. (15th lowest)
Personal income per capita: $50,054 (5th highest)
More: Economic disparity: 10 States where the middle class is being left behind
24. North Carolina
Combined sales tax: 7.0%
State sales tax: 4.8% (15th lowest)
Avg. local sales tax: 2.2% (14th highest)
Cost of living: -8.8% less than nat’l avg. (17th lowest)
Personal income per capita: $41,532 (17th lowest)
23. Indiana
Combined sales tax: 7.0%
State sales tax: 7.0% (tied–5th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -9.3% less than nat’l avg. (16th lowest)
Personal income per capita: $42,197 (20th lowest)
22. Rhode Island
Combined sales tax: 7.0%
State sales tax: 7.0% (tied–5th highest)
Avg. local sales tax: 0.0% (tied–13th lowest)
Cost of living: -1.3% less than nat’l avg. (18th highest)
Personal income per capita: $46,119 (19th highest)
21. Mississippi
Combined sales tax: 7.1%
State sales tax: 7.0% (tied–5th highest)
Avg. local sales tax: 0.1% (15th lowest)
Cost of living: -13.8% less than nat’l avg. (the lowest)
Personal income per capita: $36,889 (2nd lowest)
20. Georgia
Combined sales tax: 7.2%
State sales tax: 4.0% (tied–7th lowest)
Avg. local sales tax: 3.2% (7th highest)
Cost of living: -7.4% less than nat’l avg. (19th lowest)
Personal income per capita: $40,540 (13th lowest)
More: Skyscrapers across the U.S.: Tallest building in every state
19. Ohio
Combined sales tax: 7.2%
State sales tax: 5.8% (24th lowest)
Avg. local sales tax: 1.4% (21st highest)
Cost of living: -10.8% less than nat’l avg. (7th lowest)
Personal income per capita: $44,943 (22nd highest)
18. South Carolina
Combined sales tax: 7.4%
State sales tax: 6.0% (tied–25th highest)
Avg. local sales tax: 1.4% (23rd highest)
Cost of living: -9.7% less than nat’l avg. (12th lowest)
Personal income per capita: $39,308 (8th lowest)
17. Minnesota
Combined sales tax: 7.4%
State sales tax: 6.9% (6th highest)
Avg. local sales tax: 0.6% (22nd lowest)
Cost of living: -2.6% less than nat’l avg. (22nd highest)
Personal income per capita: $48,052 (9th highest)
16. Colorado
Combined sales tax: 7.5%
State sales tax: 2.9% (6th lowest)
Avg. local sales tax: 4.6% (3rd highest)
Cost of living: 3.2% more than nat’l avg. (11th highest)
Personal income per capita: $46,016 (20th highest)
15. New Mexico
Combined sales tax: 7.7%
State sales tax: 5.1% (19th lowest)
Avg. local sales tax: 2.5% (11th highest)
Cost of living: -5.6% less than nat’l avg. (23rd lowest)
Personal income per capita: $36,814 (the lowest)
More: These are America’s drunkest states
14. Missouri
Combined sales tax: 8.0%
State sales tax: 4.2% (12th lowest)
Avg. local sales tax: 3.8% (6th highest)
Cost of living: -10.7% less than nat’l avg. (8th lowest)
Personal income per capita: $43,444 (24th lowest)
13. Nevada
Combined sales tax: 8.1%
State sales tax: 6.9% (7th highest)
Avg. local sales tax: 1.3% (tied–24th highest)
Cost of living: -2.0% less than nat’l avg. (19th highest)
Personal income per capita: $40,242 (11th lowest)
12. Texas
Combined sales tax: 8.2%
State sales tax: 6.3% (tied–15th highest)
Avg. local sales tax: 1.9% (16th highest)
Cost of living: -3.2% less than nat’l avg. (24th highest)
Personal income per capita: $44,269 (24th highest)
11. Arizona
Combined sales tax: 8.3%
State sales tax: 5.6% (23rd lowest)
Avg. local sales tax: 2.7% (9th highest)
Cost of living: -3.8% less than nat’l avg. (25th highest)
Personal income per capita: $37,694 (6th lowest)
10. New York
Combined sales tax: 8.5%
State sales tax: 4.0% (tied–7th lowest)
Avg. local sales tax: 4.5% (4th highest)
Cost of living: 15.3% more than nat’l avg. (2nd highest)
Personal income per capita: $46,445 (16th highest)
9. California
Combined sales tax: 8.5%
State sales tax: 7.3% (the highest)
Avg. local sales tax: 1.3% (tied–24th highest)
Cost of living: 13.4% more than nat’l avg. (3rd highest)
Personal income per capita: $44,173 (25th highest)
8. Kansas
Combined sales tax: 8.7%
State sales tax: 6.5% (tied–11th highest)
Avg. local sales tax: 2.2% (15th highest)
Cost of living: -9.6% less than nat’l avg. (13th lowest)
Personal income per capita: $47,547 (10th highest)
7. Illinois
Combined sales tax: 8.7%
State sales tax: 6.3% (tied–15th highest)
Avg. local sales tax: 2.5% (13th highest)
Cost of living: -0.3% less than nat’l avg. (15th highest)
Personal income per capita: $46,657 (13th highest)
6. Oklahoma
Combined sales tax: 8.9%
State sales tax: 4.5% (tied–13th lowest)
Avg. local sales tax: 4.4% (5th highest)
Cost of living: -10.1% less than nat’l avg. (10th lowest)
Personal income per capita: $44,757 (23rd highest)
5. Alabama
Combined sales tax: 9.1%
State sales tax: 4.0% (tied–7th lowest)
Avg. local sales tax: 5.1% (the highest)
Cost of living: -13.2% less than nat’l avg. (2nd lowest)
Personal income per capita: $40,267 (12th lowest)
More: Women in the workforce: 20 jobs that have become dominated by women
4. Washington
Combined sales tax: 9.2%
State sales tax: 6.5% (tied–11th highest)
Avg. local sales tax: 2.7% (10th highest)
Cost of living: 4.8% more than nat’l avg. (10th highest)
Personal income per capita: $46,330 (18th highest)
3. Arkansas
Combined sales tax: 9.4%
State sales tax: 6.5% (tied–11th highest)
Avg. local sales tax: 2.9% (8th highest)
Cost of living: -12.6% less than nat’l avg. (3rd lowest)
Personal income per capita: $40,858 (14th lowest)
2. Tennessee
Combined sales tax: 9.5%
State sales tax: 7.0% (tied–5th highest)
Avg. local sales tax: 2.5% (12th highest)
Cost of living: -10.1% less than nat’l avg. (10th lowest)
Personal income per capita: $42,902 (21st lowest)
Louisiana's combined sales taxes top out at 10%, the highest in the country.
1. Louisiana
Combined sales tax: 10.0%
State sales tax: 5.0% (tied–16th lowest)
Avg. local sales tax: 5.0% (2nd highest)
Cost of living: -9.4% less than nat’l avg. (15th lowest)
Personal income per capita: $43,277 (23rd lowest)
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