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US Average Combined Sales Tax Rate Up Slightly in Q3

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Dec 4th 2015
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The US average combined sales tax rate was 8.570 percent in the third quarter, a marginal increase from 8.454 percent reported in the second quarter, according to the latest ONESOURCE Indirect Tax report from Thomson Reuters.

The report, which summarizes quarterly changes in sales, use, and value-added tax, showed that state-imposed retail sales tax increased to 5.539 percent across the United States. That rate had remained unchanged at 5.457 percent for three consecutive quarters.

In addition, there was a significant increase in local tax code amendments in the third quarter – from 197 in the second quarter to 220. The average sales tax rates for cities and counties were also higher this quarter. For cities, the average rate was 1.770 percent, up from 1.759 percent the previous quarter, and for counties, the average rate was 1.261 percent, up from 1.238 percent in the second quarter.

“The increase in state tax rates and local tax changes this quarter marks a contrast to the relative stability in Q2,” Carla Yrjanson, vice president of tax research and content at Thomson Reuters, said in a written statement. “Recent changes should serve as a reminder for tax professionals to keep a vigilant eye on amendments and new filing requirements that could introduce additional complexity to their compliance efforts.”

Puerto Rico had the highest territory sales tax, at 10.5 percent, which is more than any other state or territory-level rate in the United States. This was followed by Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee, which all tied for the second-highest state sales tax rate of 7 percent. Minnesota and Nevada followed at 6.875 percent and 6.85 percent, respectively.

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

1. Tuba City, Arizona (12.9 percent)

2. (tie) Arab, Alabama (12.5 percent)

2. (tie) Piedmont, Alabama (12.5 percent)

4. Coconino County, Arizona (11.9 percent)

5. McKinley County, New Mexico (11.75 percent)

6. Pinal County, Arizona (11.7 percent)

7. Mansfield, Arkansas (11.625 percent)

8. (tie) Cibola County, New Mexico (11.5626 percent)

8. (tie) San Juan County, New Mexico (11.5626 percent)

Alaska once again claims the highest-taxing counties, with Wrangle, Petersburg, and Sitka peaking with rates between 6 and 7 percent. Kodiak, Alaska, held the highest city sales tax nationwide at 7 percent, with Hoonah and Selawik in Alaska both following at 6.5 percent.

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US Average Combined Sales Tax Rate Down Slightly in Q2

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