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The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and local
levels. We are a 501(c)(3) non-profit
©2016 Tax Foundation
Creative Commons CC-BY-NC 4.0
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State and Local
Sales Tax Rates in 2016
By Scott Drenkard and Nicole Kaeding
of State Projects
· Forty-five states and the District of Columbia collect statewide sales taxes.
· Local sales taxes are collected in 38 states.
· The five states with the highest average combined state and local sales tax rates
are Tennessee (9.46 percent), Arkansas (9.30 percent), Louisiana (9.0 percent),
Alabama (8.97 percent), and Washington (8.90 percent).
· Sales tax rates differ by state, but sales tax bases also impact how much revenue is
collected from a tax and how the tax affects the economy.
· Sales tax rate differentials can induce consumers to shop across borders or buy
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, sales
taxes are easier to understand; consumers can see their tax burden printed directly on their
In addition to state-level sales taxes, consumers also face local-level sales taxes 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 and local rate compared to other states. This report
provides a population-weighted average of local sales taxes as of January 1, 2016 in an
attempt to give a sense of the average local rate for each state. Table 1 provides a full state-
by-state listing of st