The average general sales tax hit an all-time high of 8.63% toward the end of 2009. Here’s where it’s the worst.
Seven states raised their sales tax rates in 2009, as did Washington, DC. North Carolina thought it was such a good idea, it did so twice. That’s in addition to countless small cities and towns that have raised the sales tax in response to budget constraints and a dip in commerce.
Among the major U.S. cities where the sales tax is highest:
- Chicago – 10.25%
- Seattle – 9.50%
- San Francisco – 9.50%
- New Orleans – 9%
- Phoenix – 8.3%
- Dallas – 8.25%
- Charlotte – 8.25%
- Las Vegas – 8.1%
- Philadelphia – 8.0%
- Atlanta – 8.0%
While these metropolitan areas rake in huge profits thanks to exorbitant sales tax rates, some tourist destinations profit from tax rates as high as 12%. New Orleans International Airport charges 10.75% sales tax. Snowmass, a Colorado resort, charges 10.4%.
Arab, Alabama tops the charts with a ridiculously high 12% sales tax rate, due in large part to the fact that 4% goes to the state of Alabama, 4% goes to the county Arab is located in, and the final 4% goes to the town itself. There are several other small towns that adhere to a similar model — kicking back to the county and state at the expense of the locals and tourists.
The question is: How do we stop the bleeding?
What steps need to be taken to ensure the sales tax rate doesn’t spiral completely out of control? Are we headed in the right direction or is the current administration moving us in a direction where city and local businesses will have no choice but to continue imposing higher rates
on their patrons?
Feel free to share your thoughts in the comments section below.
Source: “U.S. Sales Tax Rates Hit Record High,” by William P. Barrett, Forbes, 3/8/10