California levies the highest state sales tax of any state of 7.25%. Help us continue our work by making a tax-deductible gift today. Sales tax rate differentials can induce consumers to shop across borders or buy products online. Sales and Use Tax Rates Effective October 1, 2020 Listed below by county are the total (4.75% State rate plus applicable local rates) sales and use tax rates in effect: * Includes the 0.50% transit county sales and use tax. items purchased for resale to everyday consumers, or items purchased as raw materials, for which tax will be paid at the time of resale of the final product – are not subject to sales tax either. Local sales taxes are collected in 38 states. [13] Mehmet Serkan Tosun and Mark Skidmore, “Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia,” Research Paper 2005-7, Regional Research Institute, West Virginia University, September 2005, http://rri.wvu.edu/wp-content/uploads/2012/11/Tosunwp2005-7.pdf. Use taxes are placed upon goods or services bought in one state that are subsequently transported to, consumed within, or resold in another state. For example, Tennessee has high sales taxes but no wage income tax, whereas Oregon has no sales tax but high income taxes. Georgia saw a small decrease in its average local rates, but it continues to levy the 19th highest combined sales taxes. Among states that do allow for a combined sales tax, Alabama, Arkansas, Louisiana, Tennessee, and Washington have the highest rates when state and local taxes are added together. Part of this increase can be traced to the city of Evanston, which raised its city tax from 1 percent to 1.25 percent,[5] and to Marion City, which raised its sales tax from 8.75 percent to 9.5 percent in an attempt to pay down city-levied property taxes. While graduated income tax rates and brackets are complex and confusing to many taxpayers, sales taxes are easier to understand; consumers can see their tax burden printed directly on their receipts. Click here for a PDF version of this table [15] Arthur Woolf, “The Unintended Consequences of Public Policy Choices: The Connecticut River Valley Economy as a Case Study,” Northern Economic Consulting, Inc., November 2010, http://www.documentcloud.org/documents/603373-the-unintended-consequences-of-public-policy.html. There are often multiple sales tax rates in each ZIP code, county, and city. New Jersey’s local score is represented as a negative. If you itemize deductions on Schedule A, your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if … State sales taxes range from 0.00% to 7.25%, with most states falling between 4% and 7%. The five states with the highest average combined state and local sales tax rates are Tennessee (9.53 percent), Louisiana (9.52 percent), Arkansas (9.47 percent), Washington (9.21 percent), and Alabama (9.22 percent). A home is both ours and a space for family and friends. [6] Brittany Jacob, “Marion City Council unanimously passes sales tax increase and a property tax decrease,”  KFVS-TV, Sept. 23, 2019, https://www.kfvs12.com/2019/09/24/marion-city-council-unanimously-passes-sales-tax-increase-property-tax-decrease/. Johnson County’s special purpose local option sales tax (SPLOST) expired in September, taking the county’s combined sales tax down from 8 percent to 7 percent.[12]. Sources: Sales Tax Clearinghouse; Tax Foundation calculations; State Revenue Department websites, Avoidance of sales tax is most likely to occur in areas where there is a significant difference between jurisdictions’ rates. [7] This new rate kicked in on April 1. 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