(The Center Square) – Alaska’s sales tax rate is the lowest in the country, according to a report released Wednesday by the Tax Foundation.
The state does not collect a sales tax but does allow local governments to levy a sales tax. The 1.81% average local tax rate is the lowest in the country, according to the report.
According to the Alaska Division of Community and Regional Affairs, 107 of the state’s 166 municipalities impose a sales tax range. The percentages range from 1% to 7% but are typically between 2% to 5%.
Alaska Gov. Mike Dunleavy discussed the possibility of a statewide sales tax during the 2023 legislative session as lawmakers grappled with balancing the budget. A bill was never drafted.
Delaware, Montana, New Hampshire and Oregon do not charge statewide sales taxes, but they do not allow local sales taxes, according to the report.
Tennessee has the highest state and local combined sales tax rate at 9.548%, followed by Louisiana at 9.547%. California has the highest stand-alone sales tax rate at 7.25%, with Indiana, Mississippi, Rhode Island and Tennessee tying for second.
Alabama has the highest average local sales tax rate at 5.24%, followed by Louisiana at 5.24%. Colorado (4.89%), New York (4.53%) and Oklahoma (4.49%) round out the top five.
