Rank shows room for improvement, but competitive rate with surrounding states.
Georgia Ranked 21st for Sales Tax Rates
In
March, the Tax Foundation released their annual report analyzing
state-by-state sales tax rates. Here’s a look at how Georgia ranked.
For
its combined state and average local sales tax rate of 7.01 percent, Georgia
came up in about the middle of the pack, ranking as the 21st highest sales
taxes in the country. For state sales tax alone, however, the Peach State’s 4
percent rate earned a better spot on the list: 12th lowest.
The
Tax Foundation addressed the importance of competition in setting sales tax
rates: “Avoidance of sales tax is most likely to occur in areas where there is
a significant difference between two jurisdictions’ sales tax rates. Research
indicates that consumers can and do leave high-tax areas to make major
purchases in low-tax areas…”
Compared
to neighboring states, Georgia fares pretty well. Tennessee and Alabama have
the first and fourth highest combined state and local sales tax rates in the
country, and South Carolina’s combined rates of 7.22 percent is slightly higher
than Georgia’s. North Carolina and Florida do rank better, with combined rates
of 6.90 percent and 6.66 percent, respectively. The Tax Foundation does not
take into account sales tax bases.
In
another Tax Foundation report—on state-by-state Tax Freedom Day in 2016—Georgia ranked
as the 20th earliest date in the
nation, April 17, a week before the national date. Tax Freedom Day represents
the day when the U.S. as a whole has earned enough money to pay its total tax
bill for the year, meaning it takes more than a quarter of the year for taxpayers
to be free of their tax burden and keep their remaining income.
