Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New York, and Wyoming. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percent. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. Subscribe State RatesĬalifornia has the highest state-level sales tax rate, at 7.25 percent. Subscribe to get insights from our trusted experts delivered straight to your inbox. Stay informed on the tax policies impacting you. The five states with the lowest average combined rates are Alaska (1.76 percent), Hawaii (4.44 percent), Wyoming (5.36 percent), Wisconsin (5.43 percent), and Maine (5.50 percent). The five states with the highest average combined state and local sales tax rates are Louisiana (9.550 percent), Tennessee (9.548 percent), Arkansas (9.46 percent), Alabama (9.25 percent), and Oklahoma (8.98 percent). Of these, Alaska allows localities to charge local sales taxes. Combined Ratesįive states do not have statewide sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. Table 1 provides a full state-by-state listing of state and local sales tax rates. This report provides a population-weighted average of local sales taxes as of January 1, 2023, to give a sense of the average local rate for each state. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state and local rate compared to other states. In addition to state-level sales taxes, consumers also face local sales taxes in 38 states. While graduated income tax rates and brackets are complex and confusing to many taxpayers, sales taxes are easier to understand consumers can see their tax burden printed directly on their receipts. Retail sales taxes are one of the more transparent ways to collect tax revenue.
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