What State Has the Highest Sales Tax 2024? Sales Tax Overview

There are five states that have a higher local tax than their state tax–Alabama, Louisiana, Colorado, New York, and Alaska. Alaska has no state sales tax. The combined sales taxes range from 0% to 9.55%. Thirty-one states fall above the 6.44% average combined sales tax and nineteen fall below. Four states—Oregon, New Hampshire, Montana, and Delaware—have a combined sales tax of 0%. Louisiana and Tennessee both have the highest combined sales tax rate of 9.55%.

California has the highest state sales tax in the US, at 7.25%. It relies heavily on sales tax revenue to fund state programs and services. Additionally, California has a large consumer base, so it can generate significant revenue from sales tax. California also has a reputation for high costs of living, reflected in the sales tax rate.

The highest state sales tax is 7%, which five states charge – Indiana, Tennessee, New Jersey, Mississippi, and Rhode Island. Average local taxes can bring total sales tax rates above 7% in almost twenty states. States depend on sales taxes because they have no income tax or low property taxes.

Tennessee has no income tax and low property taxes, but the nation’s second-highest state sales tax rate, 7%. Combined with local sales taxes, Tennessee has the highest total sales tax rate. The top five highest total sales tax states are:

  1. Tennessee
  2. Louisiana
  3. Arkansas
  4. Alabama
  5. Oklahoma

States with no income tax typically rely more on sales tax revenue. For example, Tennessee has no income tax but high sales taxes. Adding local sales taxes makes purchases more expensive. States with low or no sales tax include those with no state sales tax – Oregon, New Hampshire, Montana, and Delaware.

Meanwhile, New Jersey has a fairly low sales tax rate but the country’s highest average property tax and third-highest burden for state income tax. In most cases, sales tax is something controlled by state legislatures, and the policies they institute can fluctuate and have immediate and lasting impacts on businesses and consumers alike.

Sales Tax per State. Alabama has a 7% sales tax rate. The taxes in this study include the three basic types of taxes: sales taxes, income taxes, and property taxes.

California has the highest state-level sales tax rate, at 7.25 percent. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percent. Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New York, and Wyoming.

Yes, food taxes are in California. The state has a sales tax of 7.5%, which is applied to most items, including food. There are some exceptions, such as unprepared foods that are sold in grocery stores and restaurants. These foods are generally taxed at a lower rate of 2.5%.

Leave a Comment