If you had to pick a sales tax rate that would be "typical" for what consumers pay when they buy things in your state, what rate would you pick?
That's a tough question to answer because in addition to state sales taxes, you may also have county, city, and municipal sales taxes added onto your receipts whenever you buy something. Plus, it's quite unlikely you only do all your shopping within your home town or county. What you pay in combined state and local sales taxes will differ depending on where your transactions take place.
The Tax Foundation has a neat solution for determining the average combined state and local sales tax rate for an entire state. They start with the most local sales tax rate data they can get, roughly all the way down to the zip code level. They take these super-local sales tax rates and add them to the state's sales tax rate, then weight them according to the percentage of the state's population that lives within the super-local regions these combined sales tax rates apply. The final result is a population-weighted average combined state and local sales tax rate.
In the following interactive map, we've presented their results for each state.
Here's a little more background for what this data shows:
Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, sales taxes are easier to understand; consumers can see their tax burden printed directly on their receipts.
In addition to state-level sales taxes, consumers also face local sales taxes in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state and local rate compared to other states. This report provides a population-weighted average of local sales taxes as of January 1, 2023, to give a sense of the average local rate for each state.
As of this writing, the data reflects the nation's population distribution as of 2010. It may be interesting to see how the population-weighted combined state and local sales taxes change after the 2020 Census data becomes available, even if the state and local taxes themselves didn't change.
But wait, there's more!
Although they didn't map it, the Tax Foundation also included the basic statewide sales tax rates with their analysis. That data is presented in our next interactive map!
If you go back and forth between the two maps, you can get a sense of how much local sales taxes add to the shopping bills of consumers in your state of interest. Assuming, of course, they do most of their shopping where most the population of the state lives!
