Tenn., Ariz. top list of highest sales taxes

Bloomberg News
Residents of Tennessee and Arizona each pay a combined sales-tax rate of more than 9 percent, the highest in the U.S., according to the Tax Foundation. More

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GOVERNMENT

Tenn., Ariz. top list of highest sales taxes

Bloomberg News
Posted 2/20/12

Residents of Tennessee and Arizona each pay a combined sales-tax rate of more than 9 percent, the highest in the U.S., according to the Tax Foundation.

Louisiana, Washington and Oklahoma pay the next-highest rate, which combines state and average local sales taxes, the Washington-based nonprofit organization said last week in a report. Delaware, New Hampshire and Oregon all have no state or local levies on consumer purchases, the foundation said.

The report found that 36 states allow their municipalities to charge a local sales tax, according to Bloomberg News.

“The existence of thousands of local jurisdictions that set their own rates can lead to confusion,” said Scott Drenkard, an economist at the foundation, which has monitored fiscal policy since 1937.

Residents of states with moderate sales taxes “can end up with an extremely high burden when local rates are added to the total,” he said in the report.

Sales taxes charged by localities range from 0.25 percent to 7 percent, according to the study. Louisiana, Colorado and New York have the highest average local sales tax rates, the report said.

California charges the most sales tax, at 7.25 percent, followed by Indiana, Mississippi, New Jersey, Rhode Island and Tennessee at 7 percent, according to the study.

Gov. Lincoln D. Chafee’s budget for fiscal 2013 would extend the state’s 7 percent sales tax to currently-exempt transactions including pet supplies, taxi rides, freight shipments, car washes, warehousing, storage and clothing items costing more than $175.

When combining the sales taxes at the state and local level, Tennessee pays the most, at 9.45 percent, and Arizona is second, with a 9.12 percent rate, according to the report. •

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