April 22, 2015
Sales Tax Holds Steady for U.S. Consumers and Businesses in Q1 2015
NEW YORK – The U.S. average combined sales tax rate increased marginally in the first quarter with an increase in the number of indirect tax changes, according to the latest ONESOURCE Indirect Tax report from Thomson Reuters.
The report, which summarizes changes in sales, use and value-added tax, shows that the state-imposed portion of the retail sales tax remained unchanged across the nation, allowing the rate to remain steady for the third straight quarter at 5.457 percent. Local sales tax rate changes, however, showed a significant increase, from 201 in the fourth quarter of 2014 to 232 in Q1 2015.
“Tax professionals have to resist the temptation of being lulled into a false sense of security because of the stabilized state portion of the sales tax rate,” said Carla Yrjanson, vice president of tax research and content at Thomson Reuters. “Every quarter, there are significant updates that can create accounting stumbling blocks for even the most diligent businesses.”
At the local level, average county taxes rose marginally from 1.252 to 1.258 percent, while average city rates also showed a negligible rise from 1.764 to 1.767 percent.
Once again, Indiana, Mississippi, New Jersey, Rhode Island and Tennessee checked in with the highest state portion of the sales tax rate at 7 percent. Colorado had the lowest state rate at 2.9 percent among the non-zero states.
Alaska continues to be a costly tax state, with Wrangell County still boasting the highest county rate at 7 percent. Kodiak City remained the highest city rate at 7 percent, with 10 other Alaskan cities directly following Kodiak on the list. Tuba City, Arizona was the first non-Alaskan city to appear.
Tuba City, Arizona also retained the overall lead with a combined total burden, which raised from 12.6 percent to 12.9 percent in Q12015.
Internationally, Ghana introduced a flat real estate tax of 5 percent, effective Jan.1. Luxembourg increased their standard rate from 15 percent to 17 percent, while reduced rates of 12 and 6 percent became 14 and 8 percent respectively. Pakistan also introduced a 22 percent rate on the first of the year, which was raised to 27 percent on Jan. 31.
To download the full report, visit https://tax.thomsonreuters.com/reports/indirect-tax-rates/2015_q1.
For more information on ONESOURCE Indirect Tax, visit https://tax.thomsonreuters.com/products/brands/onesource/indirect-tax/.
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