When Connecticut’s sales tax inched upwards from 6 percent to 6.35 percent in 2011, the state made its way into the top ten sales tax states, leaving behind a gaggle of 16 states perched at 6 percent or slightly higher, but below the new Nutmeg rate of 6.35 percent.
Today, according to the Federation of Tax Administrators, Connecticut sits at number ten in the nation for its sales tax rate. Close on our heels are Massachusetts, Texas and Illinois at 6.25 percent, and Kansas at 6.3 percent. Leading the pack is California at 7.5 percent, with five states – Indiana, Mississippi, New Jersey, Rhode Island and Tennessee – at 7.0 percent.
Five states – Alaska, Delaware, Montana, New Hampshire and Oregon – have no sales tax. However, Alaska and Montana permit local sales taxes and Delaware imposes a rental and service tax. The five states with the highest average combined rates of state and local taxes are Tennessee (9.44 percent), Arizona (9.16 percent), Louisiana (8.87 percent), Washington (8.86 percent), and Oklahoma (8.67 percent), according to the Tax Foundation.
Many states have sales tax holidays on select products for specific time periods during the year, with the majority focusing on back-to-school items or energy saving products. Alabama, Louisiana and Virginia offer two or three tax-free days for the purchase of hurricane preparedness related equipment. In Connecticut, clothing and footwear are exempt for a week in late August, just as families are doing their last-minute shopping for the start of the school year.
Top ten sales tax rates (percentage):
- California 7.5
- Indiana 7.0
- Mississippi 7.0
- New Jersey 7.0
- Rhode Island 7.0
- Tennessee 7.0
- Minnesota 6.875
- Arizona 6.6
- Washington 6.5
- Connecticut 6.35
