Some states are known for their high sales tax, but sometimes looks can be deceiving.
The Tax Foundation has put out a new report on U.S. sales tax rates that shows that local sales tax rates also have a big impact on state economies, and can sometimes either offset or worsen the impact of the state sales tax rate.
For example, the report said, Mississippi has a high state tax rate of 7 percent, which is tied for second as the highest in the nation. The average local sales tax rate is only 0.07 percent, creating what the report calculated to be a combined tax rate of 7.07 percent, which ranked 22nd in the nation.
The foundation report pointed out that sales tax rates exert an influence over state economies, sometimes causing consumers to cross state lines to shop.
Not all states charge a sales tax. Forty-five states and the District of Columbia are subject to statewide sales taxes, while local sales tax is collected in 38 states, according to the report.
The following, in ascending order, are the states that the Tax Foundation found to have the highest combined state and local sales taxes:
10. New York
Combined tax rate: 8.49 percent
State tax rate: 4.00 percent
Average local tax rate: 4.49 percent
New york was also ranked number one in state and local income tax collections per capita ($2,699).
9. California
Combined tax rate: 8.54 percent
State tax rate: 7.25 percent
Average local tax rate: 1.29 percent
California has the highest state sales tax rate in the country, at 7.25 percent, according to the report.
8. Kansas
Combined tax rate: 8.68 percent
State tax rate: 6.50 percent
Average local tax rate: 2.18 percent
The state taxes are somewhat offset by the fact that Kansas has among the lowest individual income tax rates (5.2 percent).
7. Illinois
Combined tax rate: 8.70 percent
State tax rate: 6.25 percent
Average local tax rate: 2.45 percent
The state also ranked 10th in state and income tax collections per capita, with an average collection of $1,292.
6. Oklahoma
Combined tax rate: 8.91 percent
State tax rate: 4.50 percent
Average local tax rate: 4.41 percent
Oklahoma has among the lowest state tax rates, but its local tax rates are among the highest in the nation.
5. Alabama
Combined tax rate: 9.10 percent
State tax rate: 4.00 percent
Average local tax rate: 5.10 percent
The state remains one of the highest locally taxed locations in the country. However, Alabama has one of the lowest statewide tax rates (4 percent).
4. Washington
Combined tax rate: 9.18 percent
State tax rate: 6.50 percent
Average local tax rate: 2.68 percent
The state has a high sales tax, but no income tax.
3. Arkansas
Combined tax rate: 9.41 percent
State tax rate: 6.50 percent
Average local tax rate: 2.91 percent
The local tax rate in some municipalities can soar as high as 11.25 percent. While combined tax rates remain high, Arkansas has the third-lowest property tax collections per capita ($675).
2. Tennessee
Combined tax rate: 9.46 percent
State tax rate: 7.00 percent
Average local tax rate: 2.46 percent
The state tied with Indiana, Mississippi and Rhode Island for the second-highest statewide sales tax in the country.
1. Louisiana
Combined tax rate: 10.02 percent
State tax rate: 5.00 percent
Average local tax rate: 5.02 percent
Governor John Bel Edwards increased the state sales tax from 4 percent to 5 percent in an effort to close a billion dollar budget gap. While the sales tax remains high, Louisiana does not tax groceries or prescription medications.
