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NASHVILLE - Tennessee shoppers continue to pay the highest average sales taxes in the nation, according to a report issued by the Tax Foundation.

The Washington-based, nonpartisan tax research organization said the statewide average state and local sales tax burden in Tennessee is 9.43 percent for every dollar spent on taxable items.

Tennessee is in a five-way tie with Indiana, Mississippi, New Jersey and Rhode Island for the highest state sales tax rate -- 7 percent.

But local governments' ability to add up to 2.75 percent catapults the Volunteer State into the No. 1 position in terms of state and local sales burden, the foundation analysis found.

Just south of Chattanooga, the burden is far lower. Alabama ranks sixth with a state sales tax of 4 percent and local option taxes of up to 4.64 percent -- a combined rate of up to 8.64 percent.

Georgia came in at No. 23 with a state rate at 4 percent and local options of up to 2.87 percent for a combined rate of 6.87 percent.

Some local jurisdictions in other parts of the country have a higher combined sales tax rate than Tennessee. Tuba City, Ariz., ranks No. 1 nationally with 13.725 percent. That's a combination of Arizona's 6.6 percent state sales tax, a 6 percent local government tax and 1.125 percent county tax, the Tax Foundation analysis found.

While Tennessee's combined sales taxes rank No. 1, its overall average state and local tax burdens rank favorably, according to the Tax Foundation report.

Tennessee residents live in a state that has the 47th lowest overall state and local tax burden -- 7.6 percent or the third lowest nationally -- according to another Tax Foundation report.

Tennessee has no general personal income tax although it does have a 6 percent tax on certain interest and dividend income as well as a 6.5 corporate income tax.

Alabama, which has a general income tax, ranked No. 40 with a combined overall state and local tax rate of 8.5 percent. Georgia, which has a general state income tax, was No. 32 with an overall state and local tax burden of 9.1 percent.

The latest Tax Foundation report largely focused on local sales taxes, saying they "add a significant burden on consumers."

Tennessee local sales taxes average 2.43 percent. The rate in Chattanooga and Hamilton County is 2.25 percent. Forty-four counties are at the maximum 2.75 rate. The lowest county sales tax is in Johnson County -- 1.5 percent.

The Tax Foundation's report is generating debate between advocates of tax reform and a free market-oriented advocacy group.

Tennesseans for Tax Reform spokeswoman Samantha Maples said the report bolsters the group's arguments that Tennessee's overall tax system is unbalanced and unfair.

"We have the highest sales tax in the country, and that's bad because it's a regressive tax," said Maples, whose group supports a state income tax. "It basically burdens those who can least afford it."

She said the state's 5.5 percent sales tax on food is the nation's third highest.

"The tax system really affects those who can least afford it," Maples said, noting the state's median income is less than $40,000. "The people at the higher scale, $100,000 or more, they're getting a nice break here, but anybody below that is not."

She argued the state's relatively low overall tax rates mean fewer services for people at the bottom of the economic ladder, leading to more crime and problems like the state's high infant mortality rate.

Beacon Center of Tennessee Executive Director Justin Owen countered that, saying, "I certainly think it's good that we rely heavily on a sales tax instead of an income tax or other types of taxes."

Dismissing the idea of a general state income tax, Owen said, "first of all, you shouldn't tax people for generating economic growth and wealth and taxing productivity."

A sales tax on consumption is "more even-keeled," he said.

Still, Owen said, officials "may come to some agreement on the sales tax on food. That hits low income and seniors harder. We think we could lower the sales tax on food -- if we cut and are not simply shifting taxation."

Tennessee should look at cutting waste, fraud and abuse, reducing the size of state government or turning some functions over to the private sector, he said.

The study's author, Tax Foundation analyst Scott W. Drenkard, said in an email that "on the topic of consumption taxes versus income taxes, you would be right to say that consumption taxes are favorable because they don't have some of the negative incentive problems associated with taxing income, i.e. people work less because they take less of that income home with them at the end of the day."

"With that said," Drenkard said, "the report ranks the states because people have options of how and where they spend their money. Tennessee is bordered by Kentucky and Virginia, which have combined state and average local rates of 6 and 5 percent, respectively."

Chattanooga businesses long have complained about the state's high sales tax, saying it sends residents down to Georgia to buy groceries, clothing and other items.

Drenkard noted businesses also are affected by sales taxes.

The foundation's State Business Tax Climate Index, which looks at sales taxes as well as corporate rates and other taxes that businesses pay, ranks Tennessee 27th among states. Georgia ranks 25th and Alabama is 28th.

South Dakota ranks No. 1.