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US Average Sales Tax Rate Stayed Steady in Q4 2015

Feb 22nd 2016
Staff Writer and Editor AccountingWEB
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The US average combined sales tax rate for the fourth quarter of 2015 was nearly the same as the previous quarter, according to the latest ONESOURCE Indirect Tax report from Thomson Reuters.

The combined average rate for the fourth quarter was 8.571 percent, which stayed about the same as the 8.570 percent rate reported in the third quarter of last year.

The report, which summarizes quarterly changes in sales, use, and value-added tax, showed that state-imposed retail sales tax remained unchanged at 5.539 percent across the country.

In addition, the number of state and local tax rate changes decreased from 219 in the third quarter to 169 in the fourth quarter. There were also very slight differences in the average sales tax rates for US cities and counties. For cities, the average rate in the fourth quarter was 1.772 percent, up slightly from 1.770 percent the previous quarter. However, the average rate for counties was nearly unchanged – 1.260 percent in the fourth quarter versus 1.261 percent in the third quarter.

“The fourth quarter was a return to relative stability after significantly increased activity in Q3,” Carla Yrjanson, vice president of tax research and content at Thomson Reuters, said in a written statement. “Although fourth-quarter rate changes decreased from Q3, there were a total of 614 sales tax rate changes for the year in 2015, amounting to a great deal of potential impact to businesses. Tax professionals must stay abreast of these changes and corresponding filing requirements to meet compliance obligations accordingly.”

Puerto Rico once again held the top spot for the highest state or US-territory sales tax, at 10.5 percent, followed by Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee, which once again tied for the second-highest state sales tax rate of 7 percent. Minnesota and Nevada also held steady and followed at 6.875 percent and 6.85 percent, respectively.

According to the report, the local jurisdictions with the highest combined sales tax rates in the fourth quarter 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)

Kodiak, Alaska, shared the highest city sales tax rate with Winter Park, Colorado, at 7 percent, followed by two other Alaska cities – Hoonah and Selawik – at 6.5 percent. Alaska continued to claim the highest-taxing counties, with Wrangell and Petersburg at 7 percent and 6 percent, respectively.

Related article:

US Average Combined Sales Tax Rate Up Slightly in Q3


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