Tennessee has the highest combined sales tax rate in the nation, a new study by the Tax Foundation shows, even as the state’s overall tax burden remains low.
Tennessee’s rate of 9.47 percent, a weighted average that takes into account the 7-cent state levy and local rates as high as 2.75 percent, garnered the state the dubious honor of first place. Arizona, with a rate of 9.12 percent, and Louisiana, at 8.86 percent, came in second and third, respectively.
But the payout at the cash register is but one piece when looking at the whole pie.
The Tax Foundation has consistently found that Tennessee has one of the lowest tax burdens of the states, a measure of what portion of residents’ income goes toward state and local taxes. On that measure, Tennessee tied with South Dakota at 7.6 percent, according to the foundation’s latest survey using 2009 data. Only two states, Alaska, at 6.3 percent, and Nevada, at 7.5 percent, had lower tax burdens. The national average is 9.8 percent.