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August 28 2013
No. 392
State and Local Sales Tax Rates Midyear 2013
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 38 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 an attempt to give a
sense of the statutory local rate for each state. See Table 1 at the end of this Fiscal Fact for the full state-by-
state listing of state and local sales tax rates.
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 (9.44 percent), Arkansas (9.18
percent), Louisiana (8.89 percent), Washington (8.87 percent), and Oklahoma (8.72 percent).
The five states with the lowest average combined rates are Alaska (1.69 percent), Hawaii (4.35 percent),
Maine (5 percent), and Wisconsin (5.43 percent), Wyoming (5.50 percent).
The highest total sales tax rate in the United States is in Tuba City, Arizona, which has a combined rate of
12.725 percent. This rate is composed of a 5.6 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 Zachary Bartsch for his assistance on this report.
1 Due to data limitations, this study does not include local sales taxes in resort areas in Montana.
2 To'Nanees'Dizi Local Government Sales Tax Return, TC-FORM 600,
tL', :/w mit n a.dcoih,' anndRdN1 600 0-1-12- _ix_ . See also Vertex Inc., 2012 Sales Tax Rate Report,
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