Arizonans pay fairly high sales taxes when state rates are included along with those at city and county levels, according to a new report.
Arizona’s average combined sales-tax rate of 8.16 percent — equal to a tax of $8.16 on every $100 spent — ranks ninth-highest in the nation, the Tax Foundation reports in a midyear study.
The report singled out Tuba City in northeastern Arizona, a community on the Navajo Reservation, for charging the stiffest levies in the nation.
Tennessee had the highest combined rate at 9.44 percent, with Arkansas next at 9.18 percent.
Five states do not have a statewide sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon, the report said. However, Alaska and Montana allow towns, cities or other jurisdictions to charge local sales taxes. Arizona is one of 38 states where local sales taxes are levied.
The report from the Washington, D.C.-based research group cited Tuba City as having the highest combined sales-tax rate in the nation at 12.725 percent. “This rate is composed of a 5.6 percent state tax, a 1.125 percent Coconino County tax and an additional 6 percent tribal tax,” wrote the report’s author, Scott Drenkard.
Tuba City is not included in a separate sales-tax report compiled by the League of Arizona Cities and Towns and the Arizona Department of Revenue. It shows Fredonia in Coconino County with the state’s highest rate at 10.725 percent, with San Luis in Yuma County close behind at 10.7 percent. Huachuca City in Cochise County charges a state-low 7.6 percent.
Glendale is near the top at 9.2 percent. Phoenix’s combined rate is 8.3 percent. Among other larger Arizona cities, Chandler and Gilbert are at 7.8 percent, Scottsdale has a 7.95 percent rate, Mesa taxes sales at 8.05 percent, and Tucson is at 8.1 percent.
These rates are for general retail purposes. Different rates sometimes apply on restaurant meals, hotel stays and other special transactions.
According to the Tax Foundation, California has the highest state-only rate at 7.5 percent. Arizona ranks 27th in state sales taxes alone. It’s also among a few states that have cut their rates recently, to 5.6 percent from 6.6 percent when a temporary sales-tax increase expired around the end of May.
The Tax Foundation report noted that sales-tax rates tell only part of the story, adding that it’s also important to look at bases — the number and types of transactions on which sales taxes apply.
“States can vary greatly in this regard,” Drenkard wrote in the report. “For instance, most states exempt groceries from the sales tax; others tax groceries at a limited rate, and still others tax groceries at the same rate as all other products.”
Clothing is another item that sometimes is exempted or taxed at a lower rate.
Hula-seeking tourists should beware: “Experts generally agree that Hawaii has the broadest sales tax in the United States, taxing many products multiple times,” said Drenkard’s report, which also cited New Mexico and South Dakota as having very broad bases.