Average U.S. State Sales Tax Rate Increases to a Record 5.52 Percent

Release date

Tuesday, October 12, 2010

Berwyn, PA – October 12, 2010 – The average U.S. state sales tax rate increased to a record average of 5.52 percent in the first nine months of 2010, exceeding the former record of 5.48 percent for the full year 2009. This is according to the Sales Tax Rate Report for the first three quarters of 2010 issued today by Vertex Inc., the leading provider of corporate enterprise tax solutions.

The average rate of 5.52 percent marks the highest average U.S. state sales tax rate since Vertex began tracking the data in 1982. The average sales tax rate continued to increase despite a decrease in the number of rate changes overall. In the first nine months of 2010 there were a total of 455 state, county, city and district sales tax rate changes, as compared to 496 in the same period of 2009 and 707 for the full year.

“The pace of rate changes and new impositions, which had been at a record level the past three years, has slowed to some degree in 2010,” says John Minassian, Vice President Tax Content Development for Vertex. “However, the continued increase in the average state sales tax rate suggests states, counties, cities and districts by and large are increasing rate levels when they change them.”

Minassian notes that as states, cities and municipalities battle budget deficits and shortfalls, they are increasingly turning to sales tax rate increases to help make up the difference.

“Based on the rate level for the first nine months of 2010, and our internal forecasts for the last quarter of the year, it appears that the average sales tax rate will be at a new record high by December 31, 2010,” comments Minassian.

In the nine month period from January to September 2010, three states increased their sales tax rates:

  • Arizona, increased its rate to 6.6 percent from 5.6 percent
  • Kansas increased its rate to 6.3 percent from 5.3 percent
  • New Mexico increased its rate to 5.125 percent from 5.0 percent

California remains the state with the highest state sales tax rate at 7.25 percent. Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee have the second highest rate at 7.0 percent.

Additional highlights from the Vertex’s nine month Sales Tax Rate Report:

  • The average county tax rate for the first nine-months of 2010 is down slightly at 1.5450 percent, compared to 1.5480 percent in the same period of 2009.
  • The average city rate increased modestly to 1.6580 percent, compared to 1.6490 percent in the first nine months of 2009.
  • The highest city sales tax rate is found in Wrangell, Alaska (7 percent).
  • The highest combined sales tax rate of 13.725 percent is found in Tuba City (including the surrounding areas in the To’Nanees’ Dizi Local Government), Coconino County, Arizona. The average combined sales tax rate (including special purpose tax districts) is 9.642 percent.

About Vertex

Since 1978, Vertex, Inc., has been a leading provider of tax technology and services, enabling companies of all sizes to realize the full strategic potential of the tax function by automating and integrating tax processes, while leveraging advanced and predictive analytics of tax data. Vertex provides cloud-based and on-premise solutions that can be tailored to specific industries for every major line of tax, including income, sales and consumer use, value added and payroll. Headquartered in Pennsylvania, and with offices worldwide, Vertex is a privately held company that employs over 900 professionals and serves companies across the globe.

For more information about Vertex, explore Our Company or follow Vertex on Twitter @vertexinc.

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Tricia Schafer-Petrecz
Vertex Inc.

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