Connecting state and local government leaders

Which Major U.S. Cities Have the Highest Sales Tax Rates?

The interior of a Uniqlo store in Chicago during March of 2016.

The interior of a Uniqlo store in Chicago during March of 2016. Shutterstock / Sorbis

 

Connecting state and local government leaders

A new report from the Tax Foundation takes a look.

Long Beach, California and Chicago are tied for the top spot in a new ranking of combined state and local sales tax rates released this week.

The Tax Foundation issued the ranking, which looks at rates as of July 1 in U.S. cities with populations over 200,000.

Combined state and local sales tax rates in Long Beach and Chicago check in at 10.25 percent, according to the foundation's report. Contributing to that total rate is a local sales tax of 3 percent in Long Beach and 4 percent in Chicago. State tax accounts for the rest.

Baton Rouge and New Orleans, Louisiana and Birmingham and Montgomery, Alabama are next on the list with combined sales tax rates of 10 percent. In both of the Alabama cities, 6 percent of the total rate is local and 4 percent is state. In the Louisiana cities, the rate is evenly divided at 5 percent state, 5 percent local.

The chart below shows the 13 cities with the highest combined rates.

Major U.S. cities with the highest combined state and local sales tax rates, as of July 1, 2017. Click to expand this chart in a new window. (Source: Tax Foundation)

At the bottom of the rankings are Anchorage, Alaska and Portland, Oregon, where there are no state or local sales taxes imposed.

One common criticism of high sales tax rates is that they are regressive, with people earning less spending a larger share of their income to pay the tax, compared to those who earn more.

A full copy of the Tax Foundation report and rankings can be found here.

Bill Lucia is a Senior Reporter for Government Executive's Route Fifty and is based in Washington, D.C.

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