Photo by Kateryna Hliznitsova for Unsplash+
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U.S. consumers complain about higher prices, but they still are paying them, largely through increased use of credit cards. While taxes generally are not a major price component, sales taxes do add to most products’ final retail costs. Here’s a look at state and local sales tax rates in mid-2026.
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Americans this year are all over the economic map.
We’re saving less, in large part because most of us have less disposable income. But we’re spending more, despite persistent inflation, because we are using our credit cards more than ever.
Those disparate Bureau of Economic Analysis findings don’t necessary presage a full-scale recession. But they are likely why some recent University of Michigan surveys of our collective U.S. economic outlook have been glum.
“While consumer sentiment can be wrong about the future, it is rarely wrong about what people are experiencing today,” notes Mayra Rodriguez Valladares, a Financial Risk Consultant and Managing Principal at MRV Associates.
A federal tax break wash: Taxes are another factor that come into play in determining American’s financial [dis]comfort.
That economic unease is part of the reason as we head toward November’s midterm elections that Republicans are trying to rebrand the tax changes in their year-old One Big Beautiful Bill Act (OBBBA) as the Working Families Tax Cuts.
It is true that millions of filers took advantage of some of the new federal tax provisions this filing season. But the refunds the OBBBA might have produced have been offset by increased prices.
Taxes and spending at the individual level: Taxes also play a part in those higher prices. They come from the more immediate state and local sales taxes that consumers pay on most items they purchase.
Retail sales taxes are a major revenue source for most states, accounting for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections),” writes Abir Mandal, a Senior Policy Analyst with the Tax Foundation’s Center for State Tax Policy.
And most of us pay sales tax, since 45 states levy a state-level tax and 38 states allow local sales taxes. That latter group includes Alaska, which doesn’t have a statewide sales (or income) tax.
Mid-2026 state and local sales tax rates: In its latest review of sales taxes, the Washington, D.C.-based tax policy think tank found that nationwide, the population-weighted average combined state and local sales tax rate is 7.53 percent.
The five states with the highest average combined sales tax rates are —
- Louisiana at 10.13 percent,
- Tennessee at 9.61 percent,
- Washington at 9.57 percent,
- Arkansas at 9.48 percent, and
- Alabama (9.46 percent).
The Tax Foundation also points out that since the start of this year, several states have experienced small changes in combined rates due to adjustments in local sales taxes.
Notable combined rate increases occurred in North Carolina, Georgia, Washington, California, and Vermont. Wyoming was the only state that saw a reduction in its combined rate. That was the result of several jurisdictions reducing their local option tax rates in February and July.
The interactive Tax Foundation map below offers a visual overview of how your state’s sales taxes compare.
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You can read the Tax Foundation’s latest full state sales tax analysis and explore its searchable sales tax table in “State and Local Sales Tax Rates, Midyear 2026.”
The data could help you as you work on your latest budget and/or make your next shopping list.
And remember, if you still itemize your taxes, you can claim the state and local sales taxes you paid during the year as a deduction. It’s one of the tax breaks that can help you maximize your Schedule A amount.
You also might find these items of interest:
- State tax departments directory
- State and city taxes add a lot to rental car costs
- Tax-free family vehicle transfers en route to Wyoming this summer
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