State Sales Tax Breadth and Reliance: Fiscal Year 2022 Analysis and Trends

• Sales taxes make up 31.18% of state tax revenue, but are often imposed on narrow bases
• During the pandemic, more consumption was taxed due to changes in consumer habits and taxing remote transactions
• Sales tax bases range from 23.62% of personal income in Massachusetts to 118.94% in Hawaii
• The mean taxpayer cost of sales taxes is $1,334, or about $235 per percentage point of the tax rate
• Sales tax breadth has declined from a mean of 49.98% in 2000, offset by an increase in the mean state rate from 5.16% to 6.01%
• Consumption taxes are economically efficient but play a smaller role in the US compared to other developed countries
• The US is the only OECD nation without a value-added tax (VAT) and overall reliance on consumption taxes is low

Source: taxfoundation.org

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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