Saturday, March 13, 2010

U.S. Sales Tax Rates Hit Record High

There has been a lot of attention placed on Federal tax increases in the media, which has caused the steady rise of sales tax rates across the country to go nearly unnoticed. Between higher Internet sales taxes, and increases by local government agencies, some parts of the country are paying over 10% in sales taxes. As this article on explains, state governments across the country have raised sales tax rates over the past few years.

Vertex Inc., which calculates sales tax for Internet sellers, reports that the average general sales tax rate nationwide reached 8.629 percent at the end of 2009, the highest since the company started tracking data in 1982.

That was up a nickel on a taxable $100 purchase from a year earlier and up nearly 40 cents for the decade. The highest sales tax rate in the country now stands at 12 percent.

During 2009 seven states and the District of Columbia raised sales tax rates, with one jurisdiction — North Carolina — actually doing it twice. Only four states hiked rates in 2008 and only one in 2007.

Given state budget problems, the 2009 state sales tax increases aren't surprising. States have also been raising income tax rates on the wealthy and on corporations and boosting excise taxes on alcohol and tobacco. With states now facing record budget shortfalls, more tax increases seem likely.

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