HIGHEST STATES FOR SALES TAXESThe states with the highest average combined state and local sales tax rates are:1. Tennessee, 9.45 percent2. Arizona, 9.12 percent3. Louisiana, 8.85 percent4. Washington, 8.8 percent5. Oklahoma, 8.66 percentSource: Tax Foundation
Tennessee has the highest combined state and local sales tax rate of any state, the Tax Foundation said Tuesday.
The 7 percent state sales tax rate in Tennessee, combined with an average 2.45 percent local sales tax rate across the state, boosts the average tax levy in the Volunteer State to $9.45 for every $100 of purchases.
Critics of Tennessee’s sales tax-dependent system complain that the relatively high sales rate puts retailers in border towns such as Chattanooga at a competitive disadvantage and disproportionately hurts the poor who spend more of their income on purchases.
But supporters of Tennessee’s tax system insist it is better to tax consumption than income.