The race for the highest combined state and local sales tax rates among major U.S. cities is on, with Seattle and Tacoma leading the charge in the Tax Foundation’s recent report. Let’s dig into the details and explore the implications of these findings.
- Seattle and Tacoma take the top two spots in the Tax Foundation’s latest publication on the highest combined state and local sales tax rates among major U.S. cities.
- The report, “Sales Tax Rates in Major Cities, Midyear 2024,” provides data on average combined state and local sales tax rates by state, using zip code-level sales tax and population data.
- Major U.S. cities are defined as Census-designated incorporated places with populations over 200,000.
- According to the Tax Foundation, sales tax avoidance is most likely in areas where there is a significant difference between sales tax rates in different jurisdictions.
Washington residents often cross the border to Oregon for shopping due to the lack of retail sales taxes. From groceries to clothing, items are cheaper on the Oregon side, allowing Washingtonians to save even more on big-ticket items like appliances and electronics.
Seattle and Tacoma stand out in the report, with Seattle claiming the top spot with a combined state and local sales tax rate of 10.35%. On the other hand, Tacoma follows closely with a rate of 10.3%. These high rates can have significant implications for both consumers and businesses in the areas.
The impact of high sales tax rates goes beyond major cities, as smaller cities like Mill Creek and Lynwood in Washington also face high rates of 10.6%. This creates challenges for retailers and service providers, pushing some businesses to consider relocating to more tax-friendly locations.
Despite the high rates, Washington’s tax laws limit the municipalities’ ability to raise taxes further. However, the competition remains fierce, with Chicago and multiple cities in California tying for the third-highest combined state and major city sales tax rates at 10.25%.
In conclusion, the battle for the highest combined sales tax rates among major U.S. cities continues, with Seattle and Tacoma taking the lead. The implications of these rates extend beyond just numbers, impacting consumers, businesses, and even future economic decisions. It’s crucial to stay informed and be aware of the tax landscape to make informed financial decisions in these challenging times.
