Sales taxes are highest in ...

map_tax_rates.top.gif By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Tennessee has the highest combined state and average local sales tax rate of any U.S. state, at 9.44%, according to a research group's report released Thursday.

The Tax Foundation report also said that, among major metropolitan areas, two Alabama cities are tied for the highest combined state, county and city sales taxes. Birmingham and Montgomery both levy an average of 10% on purchases.

Until recently, Chicago held the title of highest metro area sales tax. But the Windy City was unseated after Cook County lowered its rate by 0.5 percentage point in July, giving it the sixth highest rate at 9.75%

Among the nation's other metro areas with at least 200,000 inhabitants, there are five California cities with sales tax rates above 9%: Long Beach, Los Angeles, Oakland, Fremont and San Francisco. Glendale, Ariz., and Seattle also ranked high on the list.

"Larger cities have an increased demand for government services and a higher rate of tourism, so it should not be particularly surprising that they tend to have higher reliance on the sales tax," said Tax Foundation adjunct scholar Lawrence Summers.

Meanwhile, the state with the second highest combined sales tax rate after Tennessee is California, at 9.08%, while Arizona came in third, at 9.01%. Other states with particularly high rates are Louisiana, Washington, New York, Oklahoma, Illinois, Arkansas and Alabama.

Sales taxes are levied by state, county and city governments. As a result, rates vary widely across the nation, making it difficult to measure and compare sales tax trends, said Kail Padgitt, a Tax Foundation economist.

"Even within a state, it can be difficult to know what the average sales tax rate is when there can be hundreds of different jurisdictions charging different rates," said Padgitt.

There are 34 states that allow local governments to charge a local option sales tax on top of the state sales tax, while 16 states have no local sales tax. Then there are five states that have no statewide tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,353.56 91.00 0.56%
Nasdaq 4,056.17 22.01 0.55%
S&P 500 1,851.47 8.49 0.46%
Treasuries 2.65 0.03 0.99%
Data as of 10:33am ET
Company Price Change % Change
Bank of America Corp... 15.85 -0.54 -3.28%
Yahoo! Inc 36.48 2.27 6.64%
Intel Corp 26.90 0.13 0.49%
Facebook Inc 58.37 -0.72 -1.22%
Microsoft Corp 40.09 0.34 0.86%
Data as of 10:18am ET
Sponsors

Sections

Bank of America still feeling fallout of mortgage crisis. It shares down 3% after quarterly loss. More

Observers are warning that risks of a blow up in China's property market are rising, threatening a slowdown that could hurt global growth. More

Yahoo is still in the midst of its turnaround, but investors liked what they saw in the company's first-quarter results. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.