Tennessee Has the Highest Combined Sales Tax: How Does Your State Rate?

As the battle rages on between state governments and online retailers who refuse to collect taxes, which states have the most to lose from the missing revenue stream?
Published
Lindsay Sakraida
BY:
Contributing Writer

The issue of state sales tax is a constant area of discussion within the world of retail, since the surge of online shopping has meant that many consumers aren't paying these fees at the time of purchase. And since many people don't actually report these instances on their annual income tax returns, as they are legally expected to do, many state governments argue that they are unjustly missing out on a sizable revenue stream.

This issue will continue to warrant heavy debate amongst retailers and state politicians. And while they do so, many shoppers will also continue to base their shopping decisions on which online retailers collect taxes, and which don't. In this light, it's interesting to note which residents might have the greatest interest in shopping this way — and, conversely, which states have the most at stake if online retailers aren't collecting on their behalf.

Enter the Tax Foundation, which did a comprehensive evaluation of current state and local sales tax rates across the nation. As it turns out, Tennessee, Arkansas, Louisiana, Washington, and Oklahoma have the highest combined rates. And as the foundation notes, "Differences in sales tax rates cause consumers to shop across borders or buy products online."

To read more about the varying rates, read the full report here. Or, check out the infographic below to see where your state ranks. (You can click on the image to view a larger version.)

Readers, do any of you live in one of the pricier states for sales tax? Anyone lucky enough to be in the lower brackets?

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Lindsay Sakraida
Contributing Writer

Lindsay Sakraida specializes in writing about retail trends and lifestyle subjects. She's also obsessed with music, movies, and tennis. Follow her on Twitter at @LinSakraida.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).

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14 comments
OOOO
As others pointed out - TN has no state income tax.

I live in a state which does tax income in addition, I pay 7% sales tax. We also have a 6% use tax for internet & out of state purchases.

9.45% is less than what I pay.

How will you pay for fire & police protection or HWY repairs if you don't pay taxes? Why cheat on your taxes?
April 24, 2014
OOOO
Where is Jim's book store? NOT TN.

What state has a combined 20% state & local sales tax rate? It's NOT TN. State tax is 7% plus local option tax where applicable can be as high as 2.45%. Do the math...
April 24, 2014
Sooke
The people in Vancouver, Washington have it figured out . They live in Washington (no state income tax) and shop across the river in Oregon (no sales tax).
April 23, 2014
Sooke
Here in British Columbia, it's 12%, 5% federal and 7% provincial. It used to be 14%. In Britain it's 20%, in Sweden 25%.

I sometimes order online from Walmart and pick it up at the store in Grant's Pass, Oregon - no sales tax.

My theory about taxes is, the higher the tax, the larger the underground economy. And the Laffer Curve points out that if governments don't keep taxes reasonable, tax revenue goes down, not up, when they raise taxes.
April 23, 2014
twg
Just to point out, Tennessee has no state income tax. I would gladly take my state's sales tax from 6 to 9 percent if they did away with the state income tax.
April 23, 2014
iowac
im not going to buy online only because i save 9% from tax. Seriously if you buy a 10 dollar item that will save you a whopping 90 cents woo you go buy some stuff with that. Usually if I want the item and can get it same price or even a buck or 2 more nearby I will buy nearby. I can take it back easier too if needed. I have to save a good chunk to make it worthy.
April 23, 2014
eric39
Anyone near the borders of those high tax states just go shop in the adjacent states instead. Take a look at the license plates at Kentucky mall on a weekend... At least half of them have Tennessee plates. That means Tennessee gets 0% those purchases, which doesn't help them out at all.
April 23, 2014
Dan de Grandpre (DealNews)
@shelly78 But OUCHIE on that state income tax rate! Almost everyone in Oregon pays 9% or more in income tax. I'd rather have a 15% sales tax. ;-)
April 23, 2014
shelly78
No sales tax for us.... Go Oregon
April 23, 2014
drreese
I have long suspected that tax free purchasing on the internet would eventually go away but my issue is that the wrong state feels it is entitled to the tax. If I drive across the state lines to make a purchase, the state I'm visiting gets the sales tax. The same logic should apply for internet purchases. This would reward the state that created a business friendly climate to encourage a business to offer goods. If I have to pay sales tax to my state for a purchase I made from another state, my state is getting something for nothing. My state has no right to tax me on items I didn't purchase from businesses in my state.
April 23, 2014
grapenuts
So, now the states are looking at passing more tax laws. Doesn't that interfere with interstate commerce? Next they'll want us to declare what we buy when we drive to another state while on vacation.
Home State: "So you bought gas while there? Well well well ~ you owe us tax......." "You say you paid tax there?" "Oh well, you'll just have to pay us too, and NO you can't get back what you paid to the other state"
State 2: "so you drove through our state getting there?" "looks like you owe use tax for the gas you burned to drive on our road." "OH YES ~and we want to tax you for the emergency services that were on stand-by as you drove through our state. (you may have needed them)" "and there is a transportation tax. ( you hauled those goods you bought 'through' our state)"

What a joke..... Next they'll want to tax us for farting. "you have a large carbon footprint lady"
April 23, 2014
Pilm
@ski, the Boston Tea Party was a protest of taxation WITHOUT representation, not a protest of taxation in general! Seems like you need to go back to grade school my friend, LOL!
April 23, 2014
ski522
Tax, tax, tax, tax...apparently all that was learned from the Boston Tea Party back in 1773 has long been forgotten! The problem with taxes is that eventually the citizens run out of money!
April 23, 2014
Pandp
Have to look at the overall taxes in the state. Like having no property tax and no tax on clothing and food, Or no personal income tax. I live in the highest overall taxed cities in the third highest taxed states in America on top of having to pay for seven plus months of heating. Looking at moving to Florida soon!
April 23, 2014