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leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
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State Sales Tax Breadth and
Reliance, Fiscal Year 2020
• Sales taxes account for about one-third of state tax revenue, but most sales
taxes are imposed on narrow—and still-narrowing—bases, with average sales
tax breadth of only 30.63 percent and a median of 36.26 percent.
• Sales tax bases range from 21.91 percent of personal income in
Massachusetts to 119.10 percent in Hawaii; the Massachusetts base is
extremely narrow, while the Hawaii base features significant tax pyramiding.
• Within states with a sales tax, the mean taxpayer cost of sales taxes is
$1,063, or about $178 per percentage point on the tax rate.
• An ideal sales tax is imposed on all final consumption, both goods and
services, but excludes intermediate transactions to avoid tax pyramiding.
• Sales tax breadth has declined from a mean of 49.98 percent in 2000 to the
current 30.63 percent, reflecting continued erosion that has largely been
offset by an increase in the mean state rate from 5.16 to 5.99 percent over
Vice President of State Projects
TAX FOUNDATION | 2
Sales taxes account for almost exactly one-third of all state tax revenue, second only to individual
income taxes (36 percent) in their contribution to state receipts. Reliance on sales taxes, however,
ranges from a low of less than 16 percent in Vermont (neglecting the five states which do not impose
state-level sales taxes) to a high of nearly 68 percent in Texas. State reliance on sales tax depends on
its mix of other