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1 Scott Drenkard, State and Local Sales Taxes at Midyear 2012 1 (2012)

handle is hein.taxfoundation/ffdcdxz0001 and id is 1 raw text is: FONA1NFiscal Fac July 31, 2012 No. 323 State and Local Sales Taxes at Midyear 2012 By Scott Drenkard Introduction Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt. Less known, however, are the local sales taxes collected in 37 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states. This report provides a population-weighted average of local sales taxes in each state in an attempt to give a sense of the statutory local rate for each state. Combined Rates Five states do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Of these, Alaska and Montana allow localities to charge local sales taxes.1 In Alaska, high local rates in populous places like Juneau and Kodiak (5 and 6 percent, respectively) certainly increase the average local rate, but not enough to give Alaskans a higher combined rate than any state that charges a statewide rate. The five states with the highest average combined rates are Tennessee (9.43 percent), Arizona (9.12 percent), Louisiana (8.86 percent), Washington (8.83 percent), and Oklahoma (8.68 percent). The five states with the lowest average combined rates are Hawaii (4.35 percent), Maine (5 percent), Virginia (5 percent), Wyoming (5.18 percent), and Wisconsin (5.43 percent). The highest total sales tax rate in the United States is in Tuba City, Arizona, which has a combined rate of 13.725 percent. This rate is composed of a 6.6 percent state tax, a 1.125 percent Coconino county tax, and an additional 6 percent tribal tax levied by the To'Nanees'Dizi local government.2 The author would like to thank Thomas Cheeseman and Andrew McIntosh for their assistance on this report. 1 Due to data limitations, this study does not include local sales taxes in resort areas in Montana.

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