Tenn. Has Highest State and Local Sales Tax with 9.44%

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WASHINGTON — Tennessee has the highest combined state and local sales tax rate at 9.44%, a Tax Foundation study said Wednesday.

The Tax Foundation report, released twice a year, provides a population-weighted average of local sales taxes in an attempt to give a sense of the statutory local rate for each state.

"Our comprehensive analysis addresses the fact that 38 states allow local governments to levy sales taxes within their jurisdiction," said Scott Drenkard, Tax Foundation economist. "These local rates, when combined with the statewide rates, can result in substantially larger tax bites."

The four other states with the highest combined state and local sales tax rates are Arkansas with 9.18%, Louisiana with 8.89%, Washington with 8.87%, and Oklahoma with 8.72%.

The five states with the lowest average combined rates are Alaska (1.69%), Hawaii (4.35%), Maine (5%), Wisconsin (5.43%) and Wyoming (5.5%).

The report also detailed changes several states have made in the past year with their sales tax rates. For example, Virginia's statewide sales tax rate increased on July 1, 2013 from 5% to 5.3% as a result of new transportation legislation.

Not all states are increasing their rates. Arizona cut its rate from 6.5% to 5.5% as a temporary sales tax increase expired. The District of Columbia is scheduled to lower its sales tax from 6% to 5.75% on Oct. 1.

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