- Retail sales taxes are crucial for state and local revenue, making up 32 percent of state and 13 percent of local tax collections.
- Forty-five states have statewide sales taxes; 38 states have local sales taxes, including Alaska, which lacks a statewide tax.
- Local sales tax rates can be significant and sometimes exceed state rates.
- The highest average combined state and local sales tax rates are in Louisiana, Tennessee, Arkansas, Washington, and Alabama.
- The lowest average combined rates are in Alaska, Hawaii, Maine, Wyoming, and Wisconsin.
- The nationwide population-weighted average sales tax rate is 7.52 percent, an increase from 7.49 percent in January.
- Sales tax rate differences can lead consumers to shop across borders.
- Sales taxes are part of a broader tax structure and should be considered in context with other taxes like income taxes.
- The data provides a population-weighted average of local sales taxes as of July 1, 2025.
- City, county, and municipal rates vary and are weighted by population to compute an average local tax rate.
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.
