Lowest Tax Highest Tax No Sales Tax All but five U.S. states have a statewide sales tax which is collected on most consumer purchases made within state borders. Like Florida, Michigan exempts out-of-state car buyers from sales tax when their home state has no sales tax on cars. For example, while Illinois does not tax retirement income, it has one of the highest sales and property taxes in the U.S. Other low-tax states may have fewer programs that you might find helpful, such as senior centers and public transportation. The sun shines a little brighter in the Sunshine State thanks to no income tax. These rates are weighted by population to compute an average local tax rate. The five states that charge the lowest average sales tax are Alaska, Hawaii, Wisconsin, Wyoming, and Maine. Alaska only levies a paltry 1.76% sales tax rate. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percent. Property taxes are comparable to most other states, as are the combined state and local sales taxes, which range between 7 and 8%. Some states with low or no income taxes have higher property or sales taxes. The state sales tax rate is 6.5%, which is well above average. Vermont has one of the highest rates for cigars at 92% the wholesale price or up to $4.00 a cigar depending on the cigar’s category. As of 2020, they include: Plus, at 9.23%, the Tax Foundation's average combined state and local sales tax rate for Washington is … While most states do charge a statewide sales tax, not all of these tax rates are particularly high. 2021 State Sales Tax Rates. Among states that do have a sales tax, some are less significant than others. Thirteen states impose taxes of 5% of the purchase price or less, including five states where the tax is just 4%. Taxes aren't everything. 37 states, including sales-tax-free Alaska and Montana, allow local municipalities to impose a sales tax, which can add up. Of these, Alaska also has no income tax, thanks to the severance tax it levies on oil and natural gas production. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. States With Low Sales Taxes . Average state and local taxes stay in the low range as a result. Comparing tax rates for other tobacco products is difficult as some states levy a per unit rate and others take a percentage of wholesale or manufacturer prices. California has the highest state-level sales tax rate, at 7.25 percent. City, county and municipal rates vary. Overall, the average combined state and local sales tax is 7.12%. Although Alaska doesn’t have a statewide sales tax, the state does allow localities to impose a local sales tax on residents. 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