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The 5 States That Tax Your Purchases The Most

Posted by on Feb. 9, 2011 at 11:22 AM
  • 15 Replies

A new report from the Tax Foundation computes the all-in sales tax shoppers pay in state and local taxes. It’s got to be California or New York, right? Actually, no. According to the Tax Foundation, the state with the highest combined state and average local rate is….Tennessee. Its combined 9.44 percent tax rate nudges out California’s average combined rate of 9.08 percent.

Turns out the old saw about all real estate being local actually applies to sales tax as well. Tennessee’s 7 percent state sales tax is indeed lower than the 8.25 percent California charges, but the average local sales tax in Tennessee is 2.44 percent, vs. less than 1 percent for California. So when you add ‘em up, Tennessee tops the list. Here are the five most taxing states to shop in, when state and average local tax rates are combined:

  1. Tennessee         9.44 percent
  2. California           9.08 percent
  3. Arizona               9.01 percent
  4. Louisiana            8.69 percent
  5. Washington        8.64 percent

And here are the states that go easiest on shoppers:

  1. Delaware               Zero percent
  2. Montana                Zero percent
  3. New Hampshire     Zero percent
  4. Oregon                  Zero percent
  5. Alaska                   1.1 percent

Interestingly, in some states it’s the local tax that takes a bigger bite out of shoppers’ wallets. For example, in Alaska there’s no state sales tax, yet purchases in Juneau are subject to a 5 percent city sales tax. (The average local sales tax across the state is a piddly 1.1 percent.) Here’s a list of states where the average local sales tax is higher than the state tax:

  1. Alabama 4.03 percent vs. 4.0 percent
  2. Alaska 1.1 vs. zero
  3. Colorado 4.08 vs. 2.9
  4. Louisiana 4.69 vs. 4.0
  5. New York 4.52 vs. 4.0

From a shopping perspective, Tennessee definitely loses out to the zero-sales tax states. But that doesn’t mean Tennessee is a terrible place to live in terms of taxes. According to a 2008 study from the Tax Foundation, when you factor in income and property tax, Tennesseans had the seventh lowest overall tax burden among the 50 states and the District of Columbia (the study also included estimates of how much tax residents of one state end up paying to other states.) By the Tax Foundation’s measures, the average national tax burden was 9.7 percent, while Volunteers paid just 8.3 percent. That gives Tennessee overall tax bragging rights over residents of New Jersey, New York, and Connecticut — the states with the highest tax burden, whose total taxes averaged more than 11 percent. So take these sales tax rankings with a grain of salt, especially if you can do at least some of your shopping out of state.

by on Feb. 9, 2011 at 11:22 AM
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Replies (1-10):
LilMissCupcake
by on Feb. 9, 2011 at 12:08 PM

oh wow thanks for sharing

RACINGMANIA
by on Feb. 9, 2011 at 12:09 PM

your welcomed

Quoting LilMissCupcake:

oh wow thanks for sharing


JMjonas
by on Feb. 9, 2011 at 12:11 PM
I knew Wa would be on the list. Orig from WA, lived in TN and now live in NY. Used to work in Oregon and no tax is awesome.
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mommyof3-2008
by on Feb. 9, 2011 at 12:22 PM

I want to move to ALaska!

onecuteladybug2
by on Feb. 11, 2011 at 1:45 AM

California taxes are crazy... We have city taxes on top of the state taxes around here.

nomadbrat83
by on Feb. 11, 2011 at 1:48 AM
Hubby is from TN. I'm just glad I live in a no state income tax state.
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iam4you2
by on Feb. 13, 2011 at 6:30 PM

WOW. thank you

elasmimi
by on Feb. 13, 2011 at 8:39 PM

I live in Tennessee, and I knew we were way up there.

Aqua_Jen
by on Feb. 13, 2011 at 8:51 PM
Oregon is awesome. Period. I never minded wa taxes when I lived there just because I loved it there so much!

Quoting JMjonas:

I knew Wa would be on the list. Orig from WA, lived in TN and now live in NY. Used to work in Oregon and no tax is awesome.
Posted on CafeMom Mobile
ilovemyboys84
by Gold Member on Feb. 13, 2011 at 8:59 PM


Quoting onecuteladybug2:

California taxes are crazy... We have city taxes on top of the state taxes around here.

when i visited there back when i was in HS i was shocked at some of the prices there when i went shopping with my cousin who lives there

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