Some states don’t impose any income taxes on their residents. Use taxes are placed upon goods or services bought in one state that are subsequently transported to, consumed within, or resold in another state. Perhaps the one you’ll most frequently encounter is sales tax. Would you consider telling us more about how we can do better? A property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. For instance, most states exempt groceries from the sales tax, others tax groceries at a limited rate, and still others tax groceries at the same rate as all other products. [3], No state rates have changed since April 2019, when Utah’s state-collected rate increased from 5.95 percent to 6.1 percent. Here, you’ll find a handy guide to current 2020 state and local sales tax rates for the rest of the United States of America. ©2020 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org State and Local Sales Tax Rates, 2020 Key Findings • Forty-five states and the District of Columbia collect statewide sales taxes. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. To find all applicable sales or use tax rates for a specific business location or local government, visit Revenue Online or download the DR1002 on the Sales & Use Tax Forms web page. In addition to sales tax by state, which you’ll pay in 45 states, take note. Non-profit businesses also do not pay sales tax on items which they elect to purchase. A use tax functions in similar fashion to a sales tax, but applies to purchases made outside of a state’s tax jurisdiction. Tool | November 2020 State-by-State Guide to Taxes on Middle-Class Families. Even Alaska, which levies no state tax on its citizens, allows retail transactions to be subject to local sales tax. Use taxes are generally taxed at the same rate as sales taxes, and largely exist to prevent local retailers from having to face competition from areas with lower or nonexistent sales tax rates. Click here for a PDF version of this table Johnson County’s special purpose local option sales tax (SPLOST) expired in September, taking the county’s combined sales tax down from 8 percent to 7 percent.[12]. Click here for a larger sales tax map, or here for a sales tax table.. The Tax Foundation works hard to provide insightful tax policy analysis. These combined rates range from 9.22% in Alabama up to 9.52% in Louisiana as of 2020. ... On Sales Tax States, state's sales tax is the most general, cities will give you a US sales tax calculator with a bit more precision and zip code is your best choice. The results do not include special local taxes—such as admissions, entertainment, liquor, lodging, and restaurant taxes—that may also apply. The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. The … The list of sales and use tax rate changes that will go into effect on January 1, 2021 is now available. There are over 11,000 standard sales tax jurisdictions in the United States in 2020 Arizona has recent rate changes (Wed Jan 01 2020). Visit the How to Look Up Sales & Use Tax Rates web page for more sales and use tax rate information. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs. States can vary greatly in this regard. Sales Tax by State 2020 Most states have a sales tax ranging between 4% and 7%. For example, the National Press Building in Washington, D.C., has its own ZIP code solely for postal reasons. (e) Salem County, N.J., is not subject to the statewide sales tax rate and collects a local rate of 3.3125%. [10] Michael Lyle, “Clark County approves raising sales tax of 1/8 of a cent,” Nevada Current, Sept. 3, 2019, https://www.nevadacurrent.com/2019/09/03/clark-county-approves-raising-sales-tax-1-8-of-a-cent/. In addition to sales tax by state, which you’ll pay in 45 states, take note. Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation, and applicable legal and regulatory requirements. Buy a home, refinance or manage your mortgage online with America's largest mortgage lender¹, Get a personal loan to consolidate debt, renovate your home and more, Get a real estate agent handpicked for you and search the latest home listings. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. The statewide tax rate is 7.25%. (d) Special taxes in local resort areas are not counted here. Be sure to check with your local government if you have questions regarding local sales tax rates. A narrow tax base is non-neutral and inefficient. The state general sales tax rate of Texas is 6.25%. Free online 2020 US sales tax calculator. Get started today! Many state pages also provide direct links to selected income tax return forms and other resources. Florida has state sales tax of 6%, and allows local governments to collect a local option sales tax of up to 1.5%.There are a total of 300 local tax jurisdictions across the state, collecting an average local tax of 1.072%. [9], Nevada’s combined ranking moved from 14th to 12th. Although these rates differ by area, for the most part, they represent a relatively small, but significant, percentage of the overall purchase amount. Citizens of most states can expect to pay sales and use taxes on the purchase or sale of retail transactions. Those district tax rates range from 0.10% to 1.00%. [10] Iowa’s rank moved from 29th to 27th largely due to new 1 percent local sales taxes in the cities of Bondurant, Clive, Grimes, Johnston, and Urbandale.[11]. [20], Hawaii has the broadest sales tax in the United States, but it taxes many products multiple times and, by one estimate, ultimately taxes 105.29 percent of the state’s personal income. Tax Rate Charts show how much sales tax is due based on the amount of a sale. 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. A home is both ours and a space for family and friends. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percent. Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New York, and Wyoming. [1] Special taxes in Montana’s resort areas are not included in our analysis. Washington has state sales tax of 6.5%, and allows local governments to collect a local option sales tax of up to 3.1%.There are a total of 216 local tax jurisdictions across the state, collecting an average local tax of 2.231%. View City and County Code Explanations. [16] Len Lazarick, “Raise taxes, and they’ll move, constituents tell one delegate,” Marylandreporter.com, Aug. 3, 2011, http://marylandreporter.com/2011/08/03/raise-taxes-and-theyll-move-constituents-tell-one-delegate/. Six states (Arkansas, Missouri, Nebraska, North Dakota, Texas, and Washington) actually saw small local increases while still improving their rankings. The rate charts range from 7.0 percent to 20.5 percent and calculate up to a $100 sale. We work hard to make our analysis as useful as possible. This report provides a population-weighted average of local sales taxes as of January 1, 2020, to give a sense of the average local rate for each state. For more information, see Local Tax Information. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. Following the Wayfair decision, states’ move to tax online sales has increased the importance of simplicity in sales tax systems, as sellers now have to deal with differing regulations in multiple states. Rocket HQ, 1050 Woodward Ave Detroit, MI 48226. It must be noted that some cities in New Jersey are in “Urban Enterprise Zones,” where qualifying sellers may collect and remit at half the 6.625 percent statewide sales tax rate (3.3125 percent), a policy designed to help local retailers compete with neighboring Delaware, which forgoes a sales tax. See also T. Randolph Beard, Paula A. Gant, and Richard P. Saba, “Border-Crossing Sales, Tax Avoidance, and State Tax Policies: An Application to Alcohol,” Southern Economic Journal 64:1 (July 1997), 293-306. [12] “Sales Tax Rates – General,” Georgia Department of Revenue, January 2020, https://dor.georgia.gov/sales-tax-rates-general. Use this calculator to find the general state and local sales tax rate for any location in Minnesota. [19] Despite agreement in theory, the application of most state sales taxes is far from this ideal. Fast and easy 2020 sales tax tools for businesses and people from the United States. We weight these numbers according to Census 2010 population figures to give a sense of the prevalence of sales tax rates in a particular state. (c) The sales taxes in Hawaii, New Mexico, and South Dakota have broad bases that include many business-to-business services. A total of 38 states also impose a local sales tax, which is added on top of the state sales tax. [3] The sales taxes in Hawaii and South Dakota have bases that include many services and so are not strictly comparable to other sales taxes. Many states allow local governments to charge a local sales tax in addition to the statewide sales tax, so the actual sales tax rate may vary by locality within each state. Find out if these tax havens might be right for you. Local sales taxes are collected in 38 states. In effect, it’s a form of tax imposed by government bodies on the sale of goods and services. Sources: Sales Tax Clearinghouse; Tax Foundation calculations; State Revenue Department websites, Avoidance of sales tax is most likely to occur in areas where there is a significant difference between jurisdictions’ rates. One study shows that per capita sales in border counties in sales tax-free New Hampshire have tripled since the late 1950s, while per capita sales in border counties in Vermont have remained stagnant. The five states with the highest average combined state and local sales tax rates are Tennessee (9.53 percent), Louisiana (9.52 percent), Arkansas (9.47 percent), Washington (9.21 percent), and Alabama (9.22 percent). Our work depends on support from members of the public like you. You can expect to pay many types of taxes over the course of your life, including income tax, property tax and tax on capital gains. The five states with the highest average combined state and local sales tax rates are Tennessee (9.53 percent), Louisiana (9.52 percent), Arkansas (9.47 percent), Washington (9.21 percent), and Alabama (9.22 percent). Unlike tax rates, which vary widely based on an individual’s circumstances, tax burden measures the proportion of total personal income that residents pay toward state and local taxes. Among states that do allow for a combined sales tax, Alabama, Arkansas, Louisiana, Tennessee, and Washington have the highest rates when state and local taxes are added together. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. Any state whose ranking improved did so only in comparison to those who enacted rate increases. Florida's general state sales tax rate is 6% with the following exceptions: 4% on amusement machine receipts, 5.5% on the lease or license of commercial real property, and 6.95% on … [15] Delaware actually uses its highway welcome sign to remind motorists that Delaware is the “Home of Tax-Free Shopping.”[16]. 30, 2019, https://www.theadvocate.com/baton_rouge/news/article_c6e53086-5232-11e9-a35f-d313e11c123b.html. The state sales tax rate in Arizona is 5.600%. For additional information, visit the How to Look Up Sales & Use Tax Rates web page. [4] This rate includes two levies, summing 1.25 percentage points, which are imposed statewide but distributed to localities. A stark example of this occurs in New England, where even though I-91 runs up the Vermont side of the Connecticut River, many more retail establishments choose to locate on the New Hampshire side to avoid sales taxes. Sales tax rates differ by state, but sales. Quicken Loans, LLC (doing business as Rocket Mortgage), Rocket Homes Real Estate LLC, and RockLoans Marketplace LLC (doing business as Rocket Loans®) are separate operating subsidiaries of Rocket Companies, Inc. (NYSE: RKT). However, several states grant use tax credits if sales tax is paid by a purchaser in another state. These omissions result in some amount of inexactitude but overall do not have a palpable effect on resultant averages because proximate ZIP code areas which do have ZCTA population numbers capture the tax rate of those jurisdictions. Local governments are allowed to collect their own sales taxes in 38 states, which are used to fund various public works initiatives. The Tax Cuts and Jobs Act modified the deduction for state and local income, sales and property taxes. Sales tax is the amount of money that you can expect to pay in addition to the cost of a product or service when it is bought at a retail location. [9] Jason Morton, “Tuscaloosa sales tax increase coming Tuesday,” The Tuscaloosa News, Sept. 28, 2019, https://www.tuscaloosanews.com/news/20190928/tuscaloosa-sales-tax-increase-coming-tuesday. In most areas of California, local jurisdictions have added district taxes that increase the tax owed by a seller. Submit the form to receive sales tax rate tables by ZIP code for: {state-list} {Placeholder-taxrates-latest-date} Important information about using rates based on ZIP codes: ZIP codes are a tool for the postal service, not tax authorities. New Jersey’s local score is represented as a negative. These rates are weighted by population to compute an average local tax rate. With local taxes, the total sales tax rate is between 5.600% and 11.200%. Select the Minnesota city from the list of popular cities below to see its current sales tax rate. Retail sales taxes are one of the more transparent ways to collect tax revenue. Suite 950 Help us continue our work by making a tax-deductible gift today. 0% – 2.5% … Sales tax is added to the price of taxable goods or services and collected from the purchaser at the time of sale. Wondering what your state sales tax rate is? State sales taxes range from 0.00% to 7.25%, with most states falling between 4% and 7%. View a comprehensive list of state tax rates. State and local governments should be cautious about raising rates too high relative to their neighbors because doing so will yield less revenue than expected or, in extreme cases, revenue losses despite the higher tax rate. These states include Alaska (although the state does permit local sales taxes to be levied, as above), Delaware, Montana, New Hampshire and Oregon. There are often multiple sales tax rates in each ZIP code, county, and city. You can expect to pay many types of taxes over the course of your life, including. In effect, it’s a form of tax imposed by government bodies on the sale of goods and services. Map of current sales tax rates. 19, 2019, https://taxfoundation.org/facts-figures-2019/. If you itemize deductions on Schedule A, your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if … An excise tax is a tax applied to specific goods and services. The Finder — This online tool can help determine the sales tax rate in effect for any address in Ohio. Choose any state from the list above for detailed state income tax information including 2021 income tax tables, state tax deductions, and state-specific income tax calculators. Choose any state for more information, including local and municiple sales tax rates is applicable. California levies the highest state sales tax of any state of 7.25%. For our purposes, ZIP codes that do not have a corresponding ZCTA population figure are omitted from calculations. [7] This new rate kicked in on April 1. This page does not contain all tax rates for a business location. Viewing all rates Location Rate County; Acampo: 7.750%: San Joaquin: Acton: 9.500%: Los Angeles: Adelaida: 7.250%: San Luis Obispo: Adelanto* 7.750%: San Bernardino: Adin: 7.250%: Modoc: Agoura: 9.500%: Los Angeles: Agoura Hills* 9.500%: Los Angeles: Agua Caliente: 8.250%: Sonoma: Agua Caliente Springs: 7.750%: San Diego: Agua Dulce: 9.500%: Los Angeles: Aguanga: 7.750%: … We represent this anomaly as a negative 0.03 percent statewide average local rate (adjusting for population as described in the methodology section below), and the combined rate reflects this subtraction. Part of this increase can be traced to the city of Evanston, which raised its city tax from 1 percent to 1.25 percent,[5] and to Marion City, which raised its sales tax from 8.75 percent to 9.5 percent in an attempt to pay down city-levied property taxes. Personal Finances8-minute readLauren Nowacki. Both individuals and businesses may be required to pay use taxes on transactions such as deliveries, mail order purchases, and other remote transactions. [2] Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. For example: Some states do not subject groceries, clothing and other goods to sales tax, while others do. [21] This base is far wider than the national median, where the sales tax applies to 34.25 percent of personal income.[22]. [13] For example, evidence suggests that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago’s 10.25 percent sales tax rate. [5] Joshua Irvine, “Aldermen vote to raise sales tax,” The Daily Northwestern, Sept. 24, 2019, https://dailynorthwestern.com/2019/09/24/city/aldermen-vote-to-raise-sales-tax/. But what is sales tax exactly? See “Second Quarter 2019 Changes,” Tax.Utah.gov, Apr. With local taxes, the total sales tax rate is between 6.875% and 8.875%. [20] For a representative list, see Jared Walczak, 2020 State Business Tax Climate Index, Tax Foundation, Oct. 22, 2019, https://taxfoundation.org/2020-state-business-tax-climate-index/. [14] Susan Chandler, “The sales tax sidestep,” Chicago Tribune, July 20, 2008, http://articles.chicagotribune.com/2008-07-20/business/0807190001_1_sales-tax-tax-avoidance-tax-landscape. Five states have sales tax rates of 0.00%: Alaska, Delaware, Montana, New Hampshire, and Oregon. Select the Arizona city from the list of popular cities below to see its current sales tax rate. 6.000% The state has reduced rates for sales of certain types of items. A total of 38 states also impose a local sales tax, which is added on top of the state sales tax. Five states do not have statewide sales taxes: Alaska, Delaware, Montana, New Hampshire, and Oregon. 1, 2019, https://tax.utah.gov/sales/ratechanges. In the Itemized Deductions section of the Federal Q&A, you can enter the name of the state and the number of days you lived in that state. [21] Janelle Cammenga, Facts and Figures 2019: How Does Your State Compare? Would you consider contributing to our work? Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. items purchased for resale to everyday consumers, or items purchased as raw materials, for which tax will be paid at the time of resale of the final product – are not subject to sales tax either. Find out more about how you can use deductions to lower your tax bill. Determine the location of my sale The Tax Foundation is the nation’s leading independent tax policy nonprofit. [17] For a list, see Jared Walczak, Scott Drenkard, and Joseph Bishop-Henchman, 2019 State Business Tax Climate Index, Tax Foundation, Sept. 26, 2018, https://taxfoundation.org/publications/state-business-tax-climate-index/. 2020’s Tax Burden by State. While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts. Learn more about what an excise tax is and what items are affected by it, as well as who pays it. . Adam McCann, Financial Writer Jun 24, 2020. Average local rates rose the most in Illinois, changing the state’s combined ranking from 7th highest to 6th highest. [7] Terry L. Jones and Steve Hardy, “East Baton Rouge’s new sales tax starts Monday; See early plans for ambitious MovEBR projects,” The (Baton Rouge) Advocate, Mar. [11] “New Iowa Local Option Tax Jurisdictions,” Iowa Department of Revenue, Jan. 1, 2020, https://tax.iowa.gov/businesses/local-option-sales-tax/new-iowa-local-option-tax-jurisdictions. Table 1 provides a full state-by-state listing of state and local sales tax rates. Sales Tax Rates - General General Rate Chart - Effective January 1, 2021 through March 31, 2021 (47.12 KB) General Rate Chart - Effective October 1, 2020 through December 31, 2020 (22.08 KB) These recommendations would result in a tax system that is not only broad-based but also “right-sized,” applying once and only once to each product the market produces. California has the highest state-level sales tax rate, at 7.25 percent. In addition to state-level sales taxes, consumers also face local sales taxes in 38 states. [2] This number includes mandatory add-on taxes which are collected by the state but distributed to local governments. It should also be noted that while the Census Bureau reports population data using a five-digit identifier that looks much like a ZIP code, this is actually what is called a ZIP Code Tabulation Area (ZCTA), which attempts to create a geographical area associated with a given ZIP code. The rate change list does not contain rates for all locations. Despite the slightly favorable impact on the overall rate, this lower rate represents an implicit acknowledgment by New Jersey officials that their 6.625 percent statewide rate is uncompetitive with neighboring Delaware, which has no sales tax. Janelle Cammenga is a Policy Analyst with the Tax Foundation’s Center for State Tax Policy. For example, Tennessee has high sales taxes but no wage income tax, whereas Oregon has no sales tax but high income taxes. Be sure to check with your state government to determine which sales tax rates apply to you. Sales tax rate differentials can induce consumers to shop across borders or buy products online. An additional sales tax rate of 0.375% applies to taxable sales made within the Metropolitan Commuter Transportation District (MCTD). Before joining the team, she interned at the Mackinac Center for Public Policy, the Reason Foundation, and the Illinois Policy Institute. No state rates have changed since Utah increased the state-collected share of its sales tax from 5.95 percent to 6.1 percent in April 2019. Table 22, Tax Foundation, Mar. [14], At the statewide level, businesses sometimes locate just outside the borders of high sales-tax areas to avoid being subjected to their rates. Should you consider moving to one? The five states with the lowest average combined rates are Alaska (1.76 percent), Hawaii (4.44 percent), Wyoming (5.34 percent), Wisconsin (5.46 percent), and Maine (5.50 percent). Shoppers can anticipate having to pay the combined state and local tax rate on top of their purchase at the time of sale every time they acquire these products or services. A similar situation exists in Utah and Virginia. To find out more about the various types of taxes you may encounter, be sure to check our more articles here at Rocket HQSM. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. Perhaps the one you’ll most frequently encounter is sales tax. On the other end of the spectrum is Tennessee, whose state sales tax is 9.55 percent — the highest in the U.S. In addition to state-level sales taxes, consumers also face local sales taxes in 38 states. In some cases, they can rival or even exceed state rates. Because of this, some sources will describe California’s sales tax as 6.0 percent. As a 501(c)(3) nonprofit, we depend on the generosity of individuals like you. Sales Tax Clearinghouse publishes quarterly sales tax data at the state, county, and city levels by ZIP code. Texas are allowed to collect tax revenue businesses and people from the purchaser the. 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