Colorado Springs wasn’t the only government to increase sales and use tax during the first quarter of 2016, but the overall state-level tax rate across the United States remained unchanged in most of the country — except in California, according to OneSource Indirect Tax Report from Thomson Reuters.
California was the only state to institute a sales tax change — dropping the state level from 6.5 percent to 6.25 percent and increasing local tax rates to .25 percent. The change at the state level created a large number of tax amendments in city and country jurisdictions in the state. Changes in California attirute the the nationwide increase of average sales and use ax from 8.571 percent to 8.579 percent, according to the report.
Colorado Springs started a .62 percent sales tax increase to pay for road repairs starting the first quarter. And it joined 542 other cities with tax changes — 90 percent of those changes took place in California. Similarly, 79 counties changed their sales and use tax rates, with three-quarters of those in California.
“Apart from the busy tax activities in California, much of the sales and use tax figures around the country stayed relatively stable,” said Carla Yrjanson, vice president of tax research and content. “However, even small changes can have a significant impact on revenue if not accounted for properly. Business leaders must keep a vigilant eye on changes that potentially affect the jurisdictions in which they do business.”
The five localities with the highest combined sales tax rates in the United States included Tuba City, Ariz.(12.9 percent); Arab, Ala. (12.5 percent); Piedmont, Ala. (12.5 percent); Sunset, Ark. (12.25 percent); and Coconino, Ariz. (11.9 percent).
Once again, Indiana, Mississippi, New Jersey, Rhode Island and Tennessee tied for the highest state sales tax rate at 7 percent, followed by Minnesota (6.875 percent) and Nevada (6.85 percent).
At the county level, Wrangell, Alaska, remains the highest-taxing jurisdiction for the last several quarters at 7 percent, followed by Petersburg, Alaska (6.0 percent); and 11 other counties throughout Alaska, Alabama, Colorado and Louisiana at 5 percent. The average county sales tax rates dropped to 1.259 percent in Q1, from 1.26 in Q4 2015. Two counties in Colorado came in third with a sales tax of 5 percent: Hinsdale and San Juan, according to the analysis
About 11 Alaskan cities registered the highest city sales tax rates ranging from 6 to 7 percent. The average city sales tax rates rose from 1.772 percent in the fourth quarter of 2015 to 1.785 percent in the first quarter of 2016..
Worldwide, Barbados and Italy introduced special rates of 22 percent and 12.5 percent, respectively, effective Jan. 1, 2016, while the same tax rate dropped from 24 to 21 percent in Pakistan. Cape Verde, Sri Lanka and Fiji’s standard tax rates decreased to 15 percent, 8 percent and 9 percent, respectively, and Burkina Faso introduced its own standard tax rate at 8 percent. Dominican Republic and Norway’s reduced rates rose to 16 and 10 percent, respectively, while the same rate reduced to 12.5 percent in Trinidad and Tobago, the report said.