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US Average Combined Sales Tax Rate Down Slightly in Q2

Aug 4th 2015
Staff Writer and Editor AccountingWEB
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The average combined sales tax rate in the United States for the second quarter of 2015 was 8.454 percent, a slight drop from 8.482 percent reported in the first quarter, according to the latest ONESOURCE Indirect Tax Rate report from Thomson Reuters.

The report, which summarizes quarterly changes in sales, use, and value-added tax (VAT), found that the state-imposed retail sales tax was 5.457 percent across the United States – a rate that has remained unchanged for three straight quarters.

It also showed that approximately 84 new local taxes were introduced in the second quarter, compared to 65 in the previous quarter. However, the nationwide average indirect tax rate for both cities and counties dropped slightly in the second quarter. The indirect tax rate for cities was 1.759 percent, down from 1.767 percent in the first quarter. The indirect tax rate for counties decreased from 1.258 percent in the first quarter to 1.238 percent in the second quarter. Fewer of these jurisdictions amended their existing sales tax rates in the second quarter.

“There is a lot of activity around the nonstandard rates or special taxes of which tax professionals should take notice,” Carla Yrjanson, vice president of tax research and content at Thomson Reuters, said in a written statement. “Equally more local jurisdictions are introducing new taxes with new tax-filing requirements, which calls for more vigilance for CPAs if they have to meet compliance standards.”

Once again, Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee tied for the highest state sales tax rate at 7 percent, followed by Minnesota at 6.875 percent and Nevada at 6.85 percent.

According to the report, the local jurisdictions with the highest combined sales tax rates were:

  • Tuba City, Arizona (12.9 percent)
  • Arab, Alabama (12.5 percent)
  • Piedmont, Alabama (12.5 percent)
  • Coconino County, Arizona (11.9 percent)
  • McKinley County, New Mexico (11.75 percent)
  • Pinal County, Arizona (11.7 percent)
  • Mansfield, Arkansas (11.625 percent)
  • Cibola County, New Mexico (11.5626 percent)
  • San Juan County, New Mexico (11.5626 percent)
  • Collinsville, Alabama (11.5 percent)
  • Dermott, Arkansas (11.5 percent)
  • Eudora, Arkansas (11.5 percent)
  • Lake Village, Arkansas (11.5 percent)
  • Menifee, Arkansas (11.25 percent)
  • Sunset, Arkansas (11.25 percent)

Despite a national average city sales tax rate of 1.759 percent, 12 Alaskan cities peaked with rates between 6 percent and 7 percent. Kodiak City, Alaska, was the highest-taxing city nationwide at 7 percent, while 11 other cities within the state ranged from 6 percent to 6.5 percent.

Wrangle, Petersburg, and Sitka counties in Alaska were the highest-taxing counties in the country with rates between 6.5 percent and 7 percent, while three other counties followed with the next highest rates at 5 percent. In addition, counties in Alabama, Colorado, and Louisiana also imposed a 5 percent rate.

Internationally, Brazil introduced new rates designated toward COFINS, a federal retirement and healthcare contribution. As of May 2015, corporate entities collecting VAT in the country are now mandated to pay rates of 8.54 percent and 10.68 percent toward the contribution. India implemented reduced VAT rates in two states, while Pakistan made multiple country-level VAT changes regarding various types of liquid fuel, beginning June 1, 2015.


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