Sales tax

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State tax policy

Personal income tax

Sales tax

Excise taxes

Corporate income tax

Tax policy in the states
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming
Sales tax is one of the primary taxes levied by state governments. Sales tax is applied to goods and services at the point of purchase. It is most often collected by the seller of the good or service and then transferred to the taxing authority.[1]

Historically, general sales or use tax has been "one of the mainstays of state revenue systems." Presently, sales tax revenue comprises roughly one third of the total tax revenue the states collect. The lucrativeness of the sale tax for states has, however, diminished somewhat in recent years. In 1998, for the first time since the Depression, sales tax accounted for a smaller share of the states' tax collections than personal income tax.[2]

Some have claimed that the sales tax is unfair, unduly burdening the poor because they "pay a larger percentage of their income in sales taxes than do middle- or upper-income people." Nonetheless, surveys show that citizens view consumption taxes (sales and use tax, as well as specialized sales taxes, or excise taxes) as "the most acceptable forms of taxation."[2]

Sales tax rates

2014

The table below lists the sales tax rates for all 50 states, as well as the status of items commonly exempted from sales tax. Of the 50 states (and Washington, D.C.), only five do not collect a general sales tax. For the remaining states that do collect sales tax, rates range from 2.9 percent in Colorado to 7.5 percent in California. The numerical rankings listed have been tallied by excluding the states that do not collect sales tax and assigning the same numerical ranking to states with the same rate. Because several states share common rates, the rankings range from one, indicating the lowest sales tax rate, to 22, which indicates the highest.[3]

Sales tax rates, 2014
State Sales tax rate Exemption status Ranking
Food Prescription drugs Nonprescription drugs
Alabama 4.00 Taxable Exempt Taxable 2
Alaska No sales tax
Arizona 5.6 Exempt Exempt Taxable 11
Arkansas 6.5 1.54 Exempt Taxable 18
California3 7.5 Exempt Exempt Taxable 22
Colorado 2.9 Exempt Exempt Taxable 1
Connecticut 6.35 Exempt Exempt Taxable 17
Delaware No sales tax
District of Columbia 5.75 Exempt Exempt Exempt 12
Florida 6 Exempt Exempt Exempt 14
Georgia 4 Exempt 4 Exempt Taxable 2
Hawaii 4 Taxable Exempt Taxable 2
Idaho 6 Taxable Exempt Taxable 14
Illinois 6.25 1 1 1 16
Indiana 7 Exempt Exempt Taxable 21
Iowa 6 Exempt Exempt Taxable 14
Kansas 6.15 Taxable Exempt Taxable 15
Kentucky 6 Exempt Exempt Taxable 14
Louisiana 4 Exempt 4 Exempt Taxable 2
Maine 5.5 Exempt Exempt Taxable 9
Maryland 6 Exempt Exempt Exempt 14
Massachusetts 6.25 Exempt Exempt Taxable 16
Michigan 6 Exempt Exempt Taxable 14
Minnesota 6.875 Exempt Exempt Exempt 20
Mississippi 7 Taxable Exempt Taxable 21
Missouri 4.225 1.225 Exempt Taxable 3
Montana No sales tax
Nebraska 5.5 Exempt Exempt Taxable 10
Nevada 6.85 5 Exempt Exempt Taxable 19
New Hampshire No sales tax
New Jersey 7 Exempt Exempt Exempt 21
New Mexico 5.125 Exempt Exempt Taxable 7
New York 4 Exempt Exempt Exempt 2
North Carolina 4.75 Exempt 4 Exempt Taxable 5
North Dakota 5 Exempt Exempt Taxable 6
Ohio 5.75 Exempt Exempt Taxable 12
Oklahoma 4.5 Taxable Exempt Taxable 4
Oregon No sales tax
Pennsylvania 6 Exempt Exempt Exempt 14
Rhode Island 7 Exempt Exempt Taxable 21
South Carolina 6 Exempt Exempt Taxable 14
South Dakota 4 Taxable Exempt Taxable 2
Tennessee 7 5.00% Exempt Taxable 21
Texas 6.25 Exempt Exempt Exempt 16
Utah 5.95 4 1.75 4 Exempt Taxable 13
Vermont 6 Exempt Exempt Exempt 14
Virginia 5.3 2 2.5 2 Exempt Exempt 8
Washington 6.5 Exempt Exempt Taxable 18
West Virginia 6 Exempt Exempt Taxable 14
Wisconsin 5 Exempt Exempt Taxable 6
Wyoming 4 Exempt Exempt Taxable 2
1"Some states tax food but allow a rebate or income tax credit to compensate poor households. They are Hawaii, Idaho, Kansas, Oklahoma, Oklahoma and South Dakota."
2"Includes statewide 1.00 percent tax levied by local governments in Virginia."
3"Tax rate may be adjusted annually according to a formula based on balances in the unappropriated general fund and the school foundation fund."
4"Food sales subject to local taxes. Includes a statewide 1.25 percent tax levied by local governments in Utah."
5"Nevada sales tax rate scheduled to decrease to 6.5 percent on July 1, 2015."
Source: Tax Policy Center, "Sales Tax Rates 2000-2014," June 2, 2014

Recent news

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See also

External links

References