Amazon.com, Inc. (AMZN), eBay Inc (EBAY), And The States That Tax Shoppers The Hardest

3. Louisiana
Louisiana’s 4% general sales tax more than doubles when you add in 4.87% for locally imposed sales taxes. Those figures combine with excise tax to produce a total burden of $1,928, fourth highest in the nation. Again, though, modest property-tax revenue and income tax rates make the sales tax more palatable, especially given that visitors bear a substantial amount of its effects.

2. Arizona
Arizona’s overall combined tax rate tops the 9% mark, with 6.6% rates statewide added to 2.56% in average local taxes. Yet the state only ranks 20th in per-person sales and excise taxes at $1,365, suggesting that spending levels are relatively restrained compared to other states. Overall, Arizona’s ranks in the bottom quarter for total tax burden, with sales taxes being the biggest contributor to revenue.

1. Tennessee
Topping the sales-tax list is Tennessee, with a 7% statewide rate combined with a 2.44% local sales tax. But with an income tax that only applies to interest and dividends and with very low property-tax revenue, sales taxes are just about the only source of potential revenue left for state and local governments to go after.

Hitting visitors as well as residents
One thing to remember about sales taxes is that if structured well, they can transfer a substantial amount of tax liability away from residents and onto visiting tourists. The high rates that prevail in tourist locations like Louisiana and Arizona show just how attractive sales taxes can be. Yet opponents note their regressive impact on low-income residents. In the end, sales taxes are just one of many financial aspects associated with where you choose to live, and taking into your account your own spending patterns is essential to determine the impact sales taxes have on your personal finances.

The article These 7 States Tax Shoppers the Hardest originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com.

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