(THE CENTER SQUARE) – Ohio ranks in the top half of states when it comes to sales taxes when state and local rates are combined.
In a recent report, the Tax Foundation called sales taxes part of an overall tax structure that should be considered in context. Overall, local sales taxes are collected along with state taxes. It examined the sales tax rates in each state, providing a population-weighted average of local sales taxes.
Ohio’s state sales tax rate is 5.75%, the 27th-highest in the nation. The state’s average local rate is 1.49%, which leads to a combined rate of 7.24%. That ranks 20th in the nation.
The five states with the highest average combined state and local sales tax rates are Louisiana (9.55%), Tennessee (9.547%), Arkansas (9.48%), Washington (9.29%) and Alabama (9.22%).
Tennessee, however, does not collect a state income tax; Alabama primarily uses sales tax to fund its schools.
The states with the lowest average combined rates are Alaska (1.76%), Hawaii (4.44%), Wyoming (5.36%), Wisconsin (5.43%) and Maine (5.50%).
Five states – Alaska, Delaware, Montana, New Hampshire and Oregon – do not have statewide sales taxes.
The tax foundation cautioned against states and municipalities from raising sales taxes above neighboring jurisdictions.
“State and local governments should be cautious about raising rates too high relative to their neighbors because doing so will yield less revenue than expected or, in extreme cases, revenue losses despite the higher tax rate,” the foundation said in its report.
