State Sales Taxes 2015

Forty-five states levy a general statewide sales tax, with rates ranging from 2.9 to 7.5 cents per $1 as of Jan. 1, 2015. Over the past decade, sales tax rates have remained relatively stable, with few states making significant changes. 

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Forty-five states plus the District of Columbia levied a general statewide sales tax as of Jan. 1, 2015.[1]

  • The five states that did not have a statewide sales tax were Alaska, Delaware, Montana, New Hampshire and Oregon.
  • Among the 45 states that levy a sales tax, the average rate was 5.64 percent in 2015, up from 5.35 percent in 2005.[2]
  • California has the highest sales tax rate at 7.5 percent and five states—Indiana, Mississippi, New Jersey, Rhode Island and Tennessee—tie for second highest with a rate of 7 percent each.   
  • Colorado has the lowest sales tax rate at 2.9 percent, followed by seven states—Alabama, Georgia, Hawaii, Louisiana, New York, South Dakota and Wyoming—each with a sales tax rate of 4 percent.

Over the past decade, state sales tax rates have remained relatively stable overall, although slight rate increases have been implemented in multiple states.[3]

  • Between 2005 and 2015, no state decided to start or stop levying a general sales tax.
  • The tax rate in 2015 is different than the tax rate in 2005 in 18 states. In 17 states, the rate has increased; Ohio was the only state to drop its rate, from 6 to 5.75 percent.
  • In nine of the states with increases, the rate increase was less than 1 cent per $1. The biggest rate increases occurred in Virginia (increase of 1.3 cents) and in Massachusetts and California (both added 1.25 cents).
  • From 2014 to 2015, the sales tax rate did not change in any state. From 2013 to 2014, Ohio and Maine increased their sales tax rates while Arizona—due to the expiration of a sales tax increase—and Kansas decreased their rates.

For many states, sales taxes are an important source of revenue, but that level of importance varies across states.[4]

  • In 2014, general sales tax revenue across all states totaled $271 billion and represented 31.3 percent of state taxes collected. General sales taxes make up the second-largest category of taxes across all states, with individual income taxes coming in first with 35.9 percent of taxes collected. In 2013, sales taxes represented 30.6 percent of taxes collected.
  • From 2013 to 2014, sales tax revenue grew significantly—by $12.4 billion or 4.8 percent—while overall tax revenue grew at a rate of 2.2 percent. From 2012 to 2013, sales tax revenue grew by $9.8 billion or 3.9 percent. By comparison, individual income tax revenue grew by $1.1 billion over this period, or less than one-half of 1 percent.
  • Florida relies the most heavily on sales taxes for revenue—61.7 percent of the state’s tax revenue came from sales taxes in 2014. Six states—Florida, Nevada, South Dakota, Tennessee, Texas and Washington—get more than 50 percent of their total tax revenue from sales taxes.
  • Among states that levy a sales tax, Vermont relies on the sales tax least, with 12 percent of tax revenue coming from the sales tax, followed by New York (16.5 percent) and Virginia (18.8 percent).

 

 


[1] Data Source: The Federation of Tax Administrators, http://www.taxadmin.org/fta/rate/tax_stru.html#Sales.

[2] The statewide rate used in calculations throughout this report for two states—Utah and Virginia—includes a local tax levied statewide. Otherwise, state tax rates do not include taxes levied by local jurisdictions. According to the Tax Foundation, local sales taxes are collected in 38 states.

[3] Data Source: The Federation of Tax Administrators.

[4] Data Source: U.S. Census Bureau, Annual Survey of State Government Tax Collections, http://www.census.gov/govs/statetax/

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