The Tax Foundation has released its annual update on state sales tax rates. Sales taxes—classic consumption taxes—touch nearly everyone and are often viewed as more pro-growth than income taxes because they create fewer economic distortions. Policy trade-offs vary by state: for example, Tennessee relies on relatively high sales taxes and has no individual income tax, while Oregon forgoes a sales tax but imposes higher income taxes.
The Tax Foundation cautions that setting sales tax rates significantly higher than neighboring states can backfire, yielding less revenue than expected and, in extreme cases, even reducing overall collections.
States with the highest average combined state and local sales tax rates: – Louisiana: 10.11% – Tennessee: 9.61% – Washington: 9.51% – Arkansas: 9.46% – Alabama: 9.46%
Explore the full rankings, historical comparisons, and an interactive map in the Tax Foundation’s report: https://taxfoundation.org/data/all/state/sales-tax-rates/