Ranking Sales Taxes on the 2022 State Business Tax Climate Index

2022 State Business Tax Climate Index with a map showing states’ rankings on the Index’s sales and excise tax component.

The sales tax rate and structure can make a state more or less attractive to businesses for two key reasons:

1. Some states apply the sales tax to business inputs, which drives up the costs of production.
2.  As sales tax rates increase, consumers may cut back on purchases or move their shopping to lower-tax jurisdictions.

The states that are most in need of sales tax reform, according to our Index, are Alabama, Washington, Louisiana, California, and Tennessee.

Source Tax Foundation

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