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Louisiana’s Local Sales Taxes Highest in Nation

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State has third highest combined state and local sales tax rates, according to Tax Foundation study

NEW ORLEANS, La. – Despite having the second lowest statewide sales tax rate in the U.S., a new study shows that Louisiana’s combined state and local sales taxes are the third highest in the nation, at 8.84 percent.

In addition, Louisiana has the highest average local sales tax rate at 4.84 percent.

“The proliferation of local jurisdictions levying their own sales taxes can have an enormous impact on a state’s overall tax structure,” said Tax Foundation analyst Scott Drenkard.

The study, published by the Tax Foundation, contradicts the commonly held belief that states with low statewide sales tax rates often have lower total sales tax.

For example, at 4 percent, Louisiana has the second lowest statewide sales tax rate in the U.S., but the higher average local sales taxes pushes Louisiana to the third highest combined rate in the country.

Conversely, California has the highest state tax rate in the country, but only ranks 12th for combined state and local taxes because of their low local average tax rate.

According to Drenkard, local option sales taxes often cause consumers to pay far more for their goods, and, according to the study, can more than double the average sales tax paid by consumers.

The lowest combined sales tax rates in the country were recorded in Delaware, Montana, New Hampshire and Oregon, all of which do not levy state sales taxes, or allow local sales taxes.

In all, five states don’t have statewide sales taxes and fourteen don’t have local sales taxes.

Nationwide, total sales tax revenue dropped 30 percent in most states between 2007 and 2010.

Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at rross@pelicaninstitute.org, and you can follow him on twitter.

 

 


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