The Tax Foundation has published a report summarizing the sales and use tax rates for all of the states. This is a very interesting link (to me, anyway).
It's nice to see an acknowledgment that the effective rate, combining local and state rates, is the relevant number. Too many ignorant general media stories focus on the state rate, not factoring in the local taxes, which often are higher than the states'. The Tax Foundation gets it right, as they usually do. They give us a good way to compare sales and use taxes from state to state.
Colorado has the lowest rate in the country at 2.9%. But when you add in the local component, they work out to have the 13th highest at 7.24%.
The highest rate in the country is in Tennessee at a combined rate of 9.41%. But there are a few places in Alabama (Brookwood, Coaling, Coker and Vance) where the rate hits 11%.
How does my state rank? Illinois comes in with a state rate of 6.25%, which is pretty good. But then you add in the local taxes and we come out at the 6th highest rate in the country. Yay, Illinois!
Who's got the lowest rate of a state that actually has a state sales and use tax? Hawaii! Go figure.
See how your state ranks. You're probably going to be depressed. Have a nice weekend.
Sales Tax Guy
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