When it comes to sales tax, not all states are created equal. Some states charge significantly higher rates than others, impacting your wallet more than you might realize. Here’s a look at 19 states where the sales tax might be making a bigger dent in your budget.
1. Tennessee
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Tennessee leads the nation with a combined state and local sales tax rate averaging 9.55%. That means nearly an additional dime for every dollar spent on taxable goods.
2. Louisiana
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Louisiana follows closely with an average combined rate of 9.52%. Despite a lower state rate of 4.45%, local jurisdictions can add taxes that nearly double the rate.
3. Arkansas
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With a combined average rate of 9.51%, Arkansas residents feel the pinch at checkout, particularly because of the high local rates that augment the state’s 6.5% sales tax.
4. Washington
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In Washington State, the combined average sales tax rate is 9.23%. The state rate is 6.5%, but local rates can be as high as 4%, pushing the total much higher.
5. Alabama
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Alabama’s combined sales tax rate averages around 9.22%. The state’s base rate is 4%, but additional local levies make it one of the highest in the country.
6. Oklahoma
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Oklahoma has an average combined rate of 8.95%. The state imposes a 4.5% sales tax, with cities and counties adding significant additional taxes.
7. Illinois
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Illinois residents face a combined rate averaging 8.83%. Chicago, in particular, has one of the highest rates in the nation when you factor in city sales taxes.
8. Kansas
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Kansas has an average combined sales tax rate of 8.69%. The state rate is 6.5%, but local taxes can significantly increase the total paid by consumers.
9. New York
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New York’s average combined rate stands at 8.52%. While the state rate is 4%, NYC and other localities impose additional taxes that can be steep.
10. California
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Despite a high state sales tax of 7.25%, the average combined rate in California is 8.82% due to various local rates.
11. Arizona
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Arizona has a combined state and local rate of 8.4%. The state tax is relatively modest at 5.6%, but local taxes take a hefty toll.
12. Texas
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In Texas, the combined average sales tax rate is 8.19%. The state itself charges a 6.25% rate, with local jurisdictions adding up to 2%.
13. Nevada
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Nevada’s combined rate averages around 8.23%. The state rate is 6.85%, with local rates contributing to the increased burden on consumers.
14. Missouri
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Missouri’s average combined sales tax rate is 8.25%. St. Louis and Kansas City, in particular, have higher local rates that push up the average.
15. New Mexico
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With an average combined rate of 7.82%, New Mexico’s sales tax includes a state rate of 5.125% plus local surcharges.
16. Minnesota
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Minnesota has a 7.88% combined average rate. The state sales tax is 6.875%, with local taxes making up the remainder.
17. Colorado
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Colorado has a relatively low state rate of 2.9%, but the average combined rate is 7.72% due to various local taxes.
18. South Carolina
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In South Carolina, the average combined sales tax rate is 7.46%, with the state imposing a 6% rate and local areas adding more.
19. Indiana
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Indiana rounds out the list with a combined sales tax rate of 7%. The state rate here is uniform, without any local sales tax additions.
Paying Attention Pays Off
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Navigating sales tax nuances can help you budget better, especially if you’re planning large purchases. Understanding these rates is essential for making informed financial decisions—after all, every penny saved is a penny earned!
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