City Sales Taxes Jump

At least 485 cities across the U.S. increased their sales tax rates last year, according to a newly released study.

Of those, 178 were newly imposed city tax rates and 307 were increases in existing municipal tax rates, according to an annual study by tax software developer Vertex. The company said this was the largest annual expansion in the past four years.

The largest increase nationwide occurred in North Courtland, Ala., which hiked its 1.0 percent sales tax rate to 4.0 percent. Seldovia, Alaska, boasted the second highest increase, from 2.0 to 4.5 percent. It was followed by Fredonia, Ariz., and Watts, Okla., which boosted their tax rates from 2.0 to 4.0 percent.

Several large U.S. cities also raised their sales tax rates between 0.1 and 0.2 percent in 2007, including Boulder, Phoenix, St. Louis, Denver and Seattle. States with the greatest number of city rate increases included Colorado, Missouri, Texas and Washington.

In 2007, the Catawba Indian Reservation in South Carolina joined Wrangell, Alaska, in having the highest city sales tax rate of 7.0 percent. South Carolina was the only state to raise its state-wide sales tax rate, from 5.0 to 6.0 percent.

The full report is available at http://www.vertexinc.com/TaxCybrary/SalesTax/2007_annual_rate_report.pdf.

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