You could say that sales taxes are the form of taxation that truly affects every person…it’s the classic consumption tax. It is also the one politicians often ratchet-up to fund their next big “project du jour.” That being said, the folks over at the Tax Foundation recently put together some numbers showing sales tax rankings from their 2022 State Business Tax Climate Index. States that rank poorly have high sales tax rates, high excise tax rates, complicated sales tax administration, and apply the sales tax to a variety of business inputs while exempting many final consumer purchases. The states scoring the lowest-scoring were Alabama, Washington, Louisiana, California, and Tennessee. Some of the highest scoring states might just surprise you.
“An ideal sales tax applies to a broad base of final consumer goods and services, with few exemptions, and is levied at a low rate. Broad-based, low-rate tax structures minimize tax-induced economic distortions that can occur when people change their purchasing behavior because of tax differences.”
Click here to read the full report at the Tax Foundation.
