10 States With the Highest Sales Tax Rates - Avoid Making Big Purchases Here

Sales tax can have a blistering effect on purchases, especially if you live in a state with a high sales tax rate.

States set sales taxes on goods sold within the state but could make exceptions for purchases like groceries. Then, add local taxes that vary by city, county, or other local municipalities, and you can see how challenging it is to keep more cash in your wallet.

Check out the top 10 states where you’ll pay the most based on the state sales tax and average local sales tax, according to the Tax Foundation.

State and average local sales tax rate: 8.53%

New York has a 4% state sales tax, the lowest rate of the top 10 states. However, local sales taxes push that number much higher, with an average local sales tax of 4.53%.

There are some advantages to shopping in New York, though — both New York State and New York City, for example, don’t tax clothing or footwear purchases under $110.

State and average local sales tax rate: 8.65%

Kansas's average local tax rate is around 2.15%, but its state tax rate of 6.5% puts it among the top 10 states for sales tax.

Buying a $20,000 car in Kansas would cost you an additional $1,300 in state sales tax before you add in local taxes based on where you’re purchasing the vehicle.

State and average local sales tax rate: 8.85%

California is particularly unfriendly to retirees. In addition to the high sales tax, the state fully taxes retirees' withdrawals from retirement accounts and income from pensions.

State and average local sales tax rate: 8.86%

One of the biggest disadvantages for Illinois purchases is the state sales tax, which is 6.25%, while local sales taxes only average around 2.61%.

There are some exemptions that organizations should be aware of. For example, non-profit charitable organizations or government entities are exempt from sales taxes in the state.

State and average local sales tax rate: 8.99%

Oklahoma barely sneaks under 9% in sales taxes, with state and local taxes splitting the total tax rate. The state charges 4.5% in state taxes, while local sales taxes average around 4.49%.

You should also check on Oklahoma’s sales tax holiday as the state exempts tax on clothes and footwear up to $100 in early August, which could be helpful as you shop for school clothes.

State and average local sales tax rate: 9.29%

Like New York, Alabama has a state sales tax of 4%, making it the lowest state tax rate in the top 10 states. However, like New York, the state’s average local tax rate makes it much less friendly for shoppers, with an average of 5.29%.

Some states also have sales tax holidays, including Alabama. In February, the state has a sales tax holiday on generators and storm preparedness products and another in July for school supplies.

State and average local sales tax rate: 9.39%

Washington shoppers are hit hardest by the state’s 6.5% sales tax. Buying a $1,000 dining room set from Costco, headquartered in Washington, will cost you an average of $95 in state and local sales tax.

State and average local sales tax rate: 9.45%

Arkansas charges 6.5% in state sales tax and an additional average local tax of around 3%. Buying a $500 folding treadmill from Walmart, which is headquartered in Arkansas, will cost you $47.25 in sales tax.

State and average local sales tax rate: 9.55%

Tennessee’s rate is affected by its second-highest state sales tax in the country. It charges a state sales tax of 7%, which is only a quarter-percent less than the leading state sales tax in the country in California.

In addition to a sales tax holiday for school supplies in July, the state exempts food and ingredients. Check the dates for the exemption, as that could be a good time to head to bulk stores like Costco or Sam’s Club for extra savings.

State and average local sales tax rate: 9.56%

Louisiana has the highest sales tax rate, with an average rate of 9.56%. To put that in perspective, buying a luxury handbag for $1,000 would cost you an additional $96 in sales tax.

Almost every state has some form of state sales tax, but it can vary from state to state depending on each state’s laws. 

The good news is that you can catch a break if you’re buying items in Alaska, Delaware, Montana, New Hampshire, or Oregon. Those five states have zero sales tax, and four of the five states — excluding Alaska — also have zero sales tax at a local level.

Local sales taxes can be added to purchases based on where you’re buying a product, with different government agencies at county, city, or other local levels adding taxes to purchases. 

However, 14 states don’t allow local sales taxes to be implemented, so the state sales tax is the only tax you’ll likely pay on a purchase.

Sales tax can be an important factor in buying goods, especially big-ticket items.

If you live in a state with a high sales tax, it may be a good idea to research the best cash-back credit cards for your purchases. The cash-back option could help you get money back to offset any extra expenses you incur by paying a high sales tax.