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Best and Worst States for Sales Tax

  • Oct 29, 2014 | Gail Cole

 Home of the worst sales tax system in the nation.

Ever wondered which states have the best and worst sales tax systems? Each year, the non-partisan research organization Tax Foundation ranks the business tax climate of all fifty states. Sales tax is one of several taxes analyzed--others being corporate tax, individual income tax, unemployment tax, and property tax.

The best

  1. Delaware
  2. New Hampshire
  3. Montana
  4. Oregon
  5. Alaska
  6. Virginia
  7. Michigan
  8. Maryland
  9. Maine
  10. Indiana

Few surprises here, as the top five do not have a statewide sales tax. Michigan, Maryland, Maine and Indiana do not have local sales taxes.

The worst

  1. Louisiana
  2. Arizona
  3. New Jersey
  4. Tennessee
  5. Washington
  6. New Mexico
  7. Arkansas
  8. Colorado
  9. California
  10. Alabama

States at the bottom should know that change is possible. North Carolina jumped from 44th overall in 2013 to 16th in 2014, “the single largest rank jump in the history of the Index.” In other words, tax reform can work. This could give hope to the people Arizona, where transaction privilege tax simplification is already underway. And to this blogger, who moved from one of the best to one of the worst.

Read the Tax Foundation Index.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.