As American consumers endure the most painful inflation rates in years, high sales taxes only exacerbate the problem.
But residents face a ZIP code lottery over how much sales tax they must pay, and those in red states fare worse than those in blue, a new study shows.
Research by the Tax Foundation found that Louisiana residents pay the highest combined state and local sales taxes in the country: a staggering 9.6 percent.
Not far from there are Tennessee, Arkansas, Washington and Alabama.
All of them are ahead of California, which has the eighth-highest combined sales tax in the country at 8.8 percent.
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In some US states, buyers do not have to pay sales tax on clothing.
Analysts found that Delaware, Montana, New Hampshire and Oregon offered the best deals for buyers.
Lucky residents of those states don’t pay any sales tax.
Alaska, Hawaii, Wyoming and Wisconsin followed closely behind with lower combined rates than the rest of the United States.
Jared Walczak of the Tax Foundation
Surprisingly, the states with the highest sales taxes were often led by Republicans in the South.
That contradicts what many voters believe about Republican states being more lenient on taxpayers.
Still, the overall tax burden facing residents is more complicated than counting sales tax alone.
State income taxes and average wages would also be taken into account.
Sales taxes are “just one part of an overall tax structure,” says group researcher Jared Walczak.
“Tennessee has high sales taxes but no income tax, while Oregon has no sales tax but high income taxes,” he added.
The investigation comes as residents in parts of South Carolina, Washington and California weigh whether to support a sales tax increase to cover local spending plans in the November elections.
Some areas in Minnesota, Kansas and Washington have already raised local sales taxes this year.
They have appeared in South Dakota, New Mexico and Louisiana in recent years.
Sales tax is applied to goods and services at the point of purchase.
Sales tax is levied on goods and services at the point of purchase, but food is usually exempt.
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Rules vary by state, but food is almost always excluded and clothing is often exempt or has a reduced rate.
Cassandra Happe says tax season is tough
According to Walczak, shoppers are savvy and willing to cross state lines or order online to get better deals.
To get a broader view, in May WalletHub researchers calculated which states had the highest “tax burden” overall.
The personal finance website looked at property, income and sales taxes, total, and excise taxes, while excluding federal taxes.
Unsurprisingly, their results showed that New Yorkers had the heaviest “tax burden,” as they are forced to shell out 12.02 percent of their income in taxes.
The Empire State was followed by Hawaii, where residents face a burden equal to 11.8 percent of their income.
The researchers defined “tax burden” as the proportion of total personal income that residents pay in state and local taxes.
Measures the proportion of total personal income that residents pay in state and local taxes.
They found that Alaska had the lowest tax burden of any U.S. state, with its citizens paying just 4.93 percent of their income in taxes.
New Hampshire, Wyoming and Florida followed, where residents face tax burdens of 5.63 percent, 5.7 percent and 6.05 percent respectively.
Commenting on the findings, WalletHub analyst Cassandra Happe said: “It’s easy to get discouraged about paying taxes when you see how much of your income you’re losing.
‘Living in a low-tax state can alleviate some of that stress.
‘Some states do not charge income or sales taxes, although all states have some form of property and excise taxes.’
The average rating for a Democratic state was 20.08, but it fell to 30.84 in Republican areas, WalletHub noted.
