The average combined U.S. sales and use tax rate increased to a record high of 9.64 percent compared to the previous record of 8.63 percent in 2009, according to a new report.
The Vertex 2010 Sales Tax Rate Report found that the average combined rate of 9.64 percent marks the highest average since the corporate tax software developer started tracking the data in 1982.
States, districts, counties and cities continue to raise taxes in response to budget deficits, according to Vertex. As of Dec. 31, 2010, the average state level sales tax rate increased to 5.52 percent, compared to 5.48 percent in 2009. The average county tax rate increased to 1.55 percent, compared to 1.54 percent in 2009. The average city tax rate increased to 1.66 percent, compared to 1.65 percent in 2009.
“The combined average sales tax rate hit a record level at the end of 2010 due to the budget deficits being experienced at every level of government,” said Vertex vice president of tax content development John Minassian in a statement. “Budget-weary governments turned to new and increased taxes in 2010 to help offset these deficits and in some instances, stave off painful cuts.”
As of Dec. 31, 2010, California remained the state with the highest sales tax rate at 7.25 percent. Five states—Indiana, Mississippi, New Jersey, Rhode Island and Tennessee—have the second highest rate, 7.00 percent.
Three states had rate changes during the year. Arizona increased its sales, use and rental rate to 6.6 percent from 5.6 percent. Kansas increased its sales tax rate to 6.3 percent from 5.3 percent, and New Mexico increased its rate to 5.125 percent from 5.0 percent.
The report found the highest city sales tax rate in Wrangell, Alaska: 7.0 percent. The highest combined sales tax rate of 13.73 percent was found in Tuba City in Coconino County, Ariz.
The combined number of new and changed sales and use tax rates since 2003 is 5,407, an average of 676 per year. Since 2003 there have been 1,934 new sales and use taxes, an average of 242 per year, and 3,473 sales and use tax changes, an average of 434 per year.
The number of sales and use tax rate changes in the U.S. in 2010 decreased to 555, compared to 707 in 2009. Of the 555 changes, 273 were tax increases, 249 were new taxes, and 53 were decreases.
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