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Reports rank combined sales tax rates

MEDIA RELEASE

Tennessee has the highest combined state and average local sales tax rate of 9.44%, and the Alabama cities of Birmingham and Montgomery are tied for the highest combined state, county and city sales tax rates among major metropolitan areas at 10%, according to two new Tax Foundation reports on state and local sales taxes.

“General sales tax rates levied by state, county and city governments in the United States vary greatly,” said Tax Foundation Adjunct Scholar Lawrence Summers, who authored the report examining combined state, county and city sales tax rates in cities with populations greater than 200,000, of which there are 107.

The report, “Major Metropolitan Area Sales Tax Rates,” is No. 239 in the Tax Foundation Fiscal Fact series and may be found at: www.taxfoundation.org/publications/show/26622.html

“Even within a state, it can be difficult to know what the average sales tax rate is when there can be hundreds of different jurisdictions charging different rates,” said Tax Foundation Economist Kail Padgitt, Ph.D., who authored the report calculating combined state and average local option sales tax rates.

Tax Foundation Fiscal Fact, No. 240, “State and Local-Option General Sales Tax Rates,” is available at: www.taxfoundation.org/publications/show/26630.html

Five states do without a statewide general sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Thirty-four states allow localities to charge a local option sales tax on top of the state sales tax, and 16 states have no local sales tax.

After Tennessee, the states with the highest combined state and average local option sales tax rate 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%).

Delaware, Montana, New Hampshire and Oregon rank lowest with no state or local sales tax. Alaska comes next with a combined rate of 1.11%, followed by Hawaii (4.35%), Maine (5 percent), Virginia (5 percent), Wyoming (5.17%) and South Dakota (5.22%).

Among major metropolitan areas, the cities with the highest combined state, county and city sales tax rates 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%).

The report presents the top 25 ranking by combined rate as well as by population.

“Larger cities have an increased demand for government services and a higher rate of tourism, so it should not be particularly surprising that they tend to have higher reliance on the sales tax,” Summers notes.

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

— Find out more:
www.taxfoundation.org

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