Top Ten Jurisdictions with the Highest Taxes on Retail Transactions
Top Ten States with the Highest Sales Taxes in the U.S. for 2025
Rising prices and inflation have been a concern for many shoppers this year, and one factor that can significantly impact the order total at checkout is sales tax. According to data from the Tax Foundation, summarized by TurboTax and Kiplinger, the ten states with the highest combined state and local sales taxes in the U.S. for 2025 are:
- Louisiana — 9.56%
- Tennessee — 9.55%
- Arkansas — 9.45%
- Washington — 9.38%
- Alabama — 9.29%
- Oklahoma — 8.99%
- Illinois — 8.85%
- California — 8.85%
- Kansas — 8.66%
- New York — 8.53%
These figures represent the average combined rate of state plus local sales taxes, reflecting both statewide and municipal levies. It's important to note that some states have no sales tax at all, such as Delaware, Montana, New Hampshire, and Oregon.
Local sales tax can add significant variation, for example, New York City's local sales tax boosts the combined rate closer to 8.5% even though the statewide tax is just 4%. Additionally, sales taxes can vary by item type; for instance, Louisiana does not tax groceries or prescriptions, even though its overall sales tax rate is the highest.
These rankings are based on average combined rates for 2025 as reported by the Tax Foundation and summarized by leading tax information sources. It's worth noting that a few states with high sales taxes can be more tax-friendly overall. For instance, some states may offer various tax credits or deductions that can offset the sales tax burden.
The specific localities (cities and counties) often have separate sales tax rates from the statewide rate, and the specific parts of the state where shopping takes place can impact sales tax expenditure. Tariffs are potentially increasing costs for shoppers, adding to the overall sales tax burden.
Inflation is straining household budgets, and these high sales taxes can significantly impact the overall cost for shoppers. However, the specific impact on household budgets or the potential impact of these high taxes on shoppers' spending habits was not discussed in the data.
In conclusion, it's essential for shoppers to be aware of sales taxes when budgeting for purchases, especially in the states with the highest combined state and local sales tax rates. Shoppers should consider the specific localities they plan to shop in and the types of items they plan to buy to get a more accurate understanding of their potential sales tax expenditure.
- Understanding the sales tax landscape is crucial for personal-finance management, especially when shopping in states with high sales taxes, such as Louisiana, Tennessee, and Arkansas, which are among the top states with the highest combined state and local sales taxes in 2025.
- When it comes to managing business expenses, it's essential to factor in sales taxes, as they can significantly affect the cost of goods and services, particularly in states with higher sales taxes like Louisiana, Tennessee, and Arkansas, where sales taxes can exceed 9%.
