My latest guest post at the Turbo Tax Blog is about State Sales Tax. How it varies from state to state, how it may be deductible on your income taxes, and best of all, why your bagel in New York will cost you nine cents more if sliced. I kid you not.
Joe
Having moved from “high sales tax” Tennessee to “low sales tax” Pennsylvania almost seven years ago, I contend that the sales tax map doesn’t mean anything until you combine it with the state (and local) income tax–THAT will show you the real burden.
After eight months in TN in 2004 and just four months in PA, we were still much better off claiming the federal tax deduction for PA income tax alone than for TN sales tax that year.
Since a greater part of our purchases are going towards services and entertainment, I think the trend will be the change the tax code to capture the change in consumption patterns.
Combined sales tax rate is useful for mapping purposes but I don’t find that useful. I am more concerned with population density and who are the people paying the most state sales tax. Maybe an average sales tax paid (in dollars) as a percentage of the eligible tax paying population would be more interesting to me.
I’m feeling the brute of NC’s state taxes right now as I just moved here from CT.