One Country, Thousands of Rates: A Guide to Local Sales Taxes

Across the U.S., most states allow local option sales taxes—additional taxes levied by cities, counties or special districts on top of the state rate. And as you might imagine, local sales tax rates vary dramatically across the country.

In some states you pay only the state rate. In others, local taxes can add several percentage points, sometimes nearly doubling the base tax. For businesses operating across multiple states (especially remote sellers), keeping track of the total state and local sales tax rate in each jurisdiction is both complex and essential.

Below we break down everything local sales tax, from which states allow them to which do not, how home-rule jurisdictions complicate things, and why they are apt to change so frequently.

States With and Without Local Sales Taxes

The reality is that most states allow local jurisdictions to impose additional sales taxes. These local collections often fund public infrastructure, transportation, education, and other community projects.

However, a handful of states do not permit local sales tax rates at all. In those states, sales tax is imposed only at the state level, meaning every shopper—whether resident or visitor—pays the exact same rate statewide.

States With No Local Sales Tax

State	State Sales Tax Rate	Notes
Connecticut	6.35%	State rate only
District of Columbia	6.0%	District-wide tax; no sub-local jurisdictions
Indiana	7.0%	State rate only
Kentucky	6.0%	State rate only
Maine	5.5%	State rate only
Maryland	6.0%	State rate only
Massachusetts	6.25%	State rate only
Michigan	6.0%	State rate only
New Jersey	6.625%	Limited outliers such as Urban Enterprise Zones, and luxury or tourism taxes
Rhode Island	7.0%	State rate only

A Note on NOMAD States

Beyond the states that only allow a uniform statewide sales tax, there are five states that have no statewide sales tax at all. They are New Hampshire, Oregon, Montana, Alaska, and Delaware—oft remembered by the acronym NOMAD.

However, the local tax picture differs among them:

• Alaska – No state tax, but local sales taxes are widely allowed.
• Montana – No statewide tax but allows limited resort taxes in certain communities.
• Delaware, New Hampshire, and Oregon – No state or local sales tax.

For businesses, that means Alaska still requires careful attention to local sales tax rates, even though there is no statewide tax.

Home-Rule vs Local Sales Taxes

Beyond the states we’ve already covered, the rest permit local option sales taxes of some kind. In most, local taxes simply add a percentage to the state rate, and businesses report everything on a single state-administered return.

But in a few states, things get more complicated.

Specifically, we’re talking about states with home-rule cities. A home-rule city or jurisdiction has constitutional or statutory authority to administer its own sales tax independently of the state.

In practical terms, this means a home-rule city may:

• Require separate tax registration
• Require separate filing and remittance
• Define its own tax base or exemptions
• Audit taxpayers independently of the state

For businesses operating in home-rule jurisdictions, compliance can be significantly more complex.

The following states are widely recognized for having home-rule sales tax systems or significant locally administered sales taxes:

State	Key Details
Alabama	Some local jurisdictions administer taxes independently, though the ONE SPOT system allows consolidated filing for most. Taxpayers should contact the localities in which they do business to determine if they need to register and collect local taxes separately.
Alaska	No statewide sales tax, but cities and boroughs establish their own. The good news is that the Alaska Remote Seller Sales Tax Commission (ARSSTC) helps streamline remote seller compliance.
Arizona	Cities administer Transaction Privilege Taxes (TPT) and require licensing; consolidated licensing is available through the state.
Colorado	Numerous self-collecting home-rule cities require separate registration and filing outside the state system.
Louisiana	Parishes administer many local sales taxes independently. The Louisiana Sales and Use Tax Commission for Remote Sellers allows centralized filing for remote sellers without physical presence.
Idaho	Some self-administered jurisdictions exist. However, reporting is done through the state.
Illinois	Over 200 home-rule municipalities have authority to impose additional sales taxes. Reporting typically occurs through the state system.

How Much Do Local Sales Taxes Increase Rates?

So now that we know which states allow local option sales taxes, the next question is obvious: how much can local sales tax rates actually increase the total rate?

The short answer: sometimes a lot. When local sales taxes are allowed, they can significantly bump up the total tax rate. 

Louisiana is the poster child. The state sales tax rate is 5%, but local parishes pile on up to 7% more. That means the total state and local sales tax rate can reach roughly 12% in some jurisdictions, earning Louisiana the current title for the highest combined sales tax rate in the country.

Why the high rates? Because parishes and cities can approve their own local taxes. The state’s 5% is just the floor; then local voters approve additional levies for local projects.

However, most states’ combined rates cluster lower. Some examples:

State	State Rate	Maximum Local Rate	Typical Combined Average
Wyoming	4%	Up to ~3%	~5.56%
Florida	6%	Up to ~2%	~6.98%
Texas	6.25%	Max 2% local	8.25% cap

Some states, such as Texas, impose statutory caps on local sales tax rates, limiting how high the combined rates can climb. But even in states with caps, local taxes often add 1–3 percentage points to the state rate.

For businesses operating nationally, local sales taxes can create significant compliance headaches. That’s what sales tax software and experts help you handle.

Why Local Sales Tax Rates Change So Frequently

One reason local sales tax compliance is challenging is that these taxes change frequently—often more often than state sales tax rates.

Local taxes are typically adopted or modified through:

Voter Referenda

Many local option taxes must be approved by voters, often to fund projects like schools, hospitals, transportation infrastructure, disaster recovery, and public safety initiatives.

For example, Georgia introduced the Floating Local Option Sales Tax (FLOST) in 2024, allowing counties to adopt a 1% tax to offset property taxes. By the 2025 election cycle, 34 counties had approved the measure.

Legislative Changes

Another way local rates change is through state legislative action. State lawmakers sometimes modify the rules governing how local jurisdictions can impose or structure their taxes.

A recent example comes from Nebraska. In 2025, the Nebraska Legislature enacted changes affecting local sales tax authority within “Good Life Districts” (GLDs)—special economic development zones designed to attract large retail and entertainment projects. Under the new law, cities are no longer allowed to impose a second local option sales tax within a GLD, and the state now allocates a portion of the statewide sales tax collected within those districts back to the host city instead.

While the statewide rate remained the same, the legislation altered how revenue can be imposed and distributed, demonstrating how state legislative changes can directly reshape local sales tax systems.

Tourism-Driven Taxes

An interesting and often highly debated sales tax trend is to implement seasonal rates. For example, certain boroughs in Alaska have considered or implemented seasonal tax rates to capture revenue during peak tourism periods while lowering the burden on residents during slower months. Haines Borough’s sales tax rate is 7% during the summer (April-September), and drops back down to 4.50% in winter (October-March).

Economic Pressures

Economic pressures—especially funding gaps for public services—also frequently drive changes in local sales tax rates.

A recent example occurred in Santa Clara County, California, where voters approved Measure A in November 2025, increasing the local sales tax by 0.625%. The tax was enacted specifically to help offset the financial impact of major federal Medicaid and Medicare funding reductions and to support the county’s public hospital system and health clinics.

The increase raised the combined local sales tax rate to as high as 9.75% in some cities and is expected to generate roughly $330 million in revenue over five years to sustain healthcare services for low-income residents.

Keeping Up With Local Sales Tax Rates

In practice, changes to local taxes come fast. Voters approve new taxes, incumbents might lift rates for new services, and states occasionally rewrite the rules.

At SalesTaxSolutions.US we help businesses navigate the ever-changing world of local sales tax rates, compliance requirements, and filing obligations. Instead of wondering whether you charged the correct total state and local sales tax rate, you can focus on running your business while we handle the complexity.

Because when it comes to sales tax compliance, the best solution is simple: get it right the first time.