Sales Tax 101 Sales Tax Rates

Which Popular Metro Areas Stiff Us on Sales Tax?

by Jennifer Dunn

sales tax rates major cities
CNN Money recently published a list of 10 cities that people are moving to in droves. We love lists! But we noticed that our favorite topic – sales tax – wasn’t factored into the rankings (how dare they). SO we got to thinking about how these popular cities treat thier fine residents when it comes to sales tax. Are they friendly? Or are they looking for every penny they can get their hands on?

Using our Sales Tax Calculator, we re-ranked the cities from the lowest sales tax rate to the highest.

1. Orlando: 6.5%

Why They’re Moving: Love Disney World? If not, there are still plenty of fun things to do. It’s warm and the cost of living isn’t all that bad. Plus, tourist dollars flow like wine in this city.

What to Expect: Pretty cheap here, actually. Florida’s base rate is 6% and no sales tax for the city of Orlando, so just look to pay a 6.5% sales tax rate: 6% plus 0.5% for Orange County. Florida is a destination-based sales tax state, so your buyers get to contend with their own local sales tax rates. Your particular rate, should you move to the home of the Magic Kingdom, won’t factor in.

2. Tampa: 7.0%

Why They’re Moving: Beaches! It’s really hard to argue with moving to the city after you see a few pictures of the area. On top of that, CNN Money also points out many baseball and other teams head down to the area for spring training and other events.

What to Expect:  Tampa is the cheapest sales tax rate on our list, mainly because Tampa proper doesn’t charge a separate local sales tax rate. So look for 6% base rate for Florida and 1% for Hillsborough County.

Like we mentioned above with Orlando, Florida is a destination-based sales tax state, so even if you relocate your business there for the beautiful beaches, your buyers will have to pay sales tax at their own Florida locality’s rate.

3. Denver: 7.62%

Why They’re Moving: The Mile High City is beautiful as is the surrounding area. Lots of scenery, including the snow capped Rocky Mountains, means you’ll always have lots to look at as you work on your business.

What to Expect: Colorado is actually fairly cheap as far as sales tax rates at a 2.9% rate. However, Denver itself is 3.62%, and the district rate is 1.1%, so expect a 7.62% sales tax rate.

Colorado is also a destination-based sales tax state, so if you have sales tax nexus in Colorado, your in-state buyers will pay the sales tax rate from their own locality.

4. Atlanta: 8.0%

Why They’re Moving: Atlanta has been consistently on top city lists for a few years now. Tons of small and large businesses, a sprawling metro area perfect for families, and relatively low cost of living give it a big advantage over other areas.

What to Expect: Speaking of those sprawling areas, you might not necessarily want to do too much shopping in Atlanta proper. Atlanta itself has a steep 8% total sales tax: 4% for Georgia, 3% for Fulton County, and 1% city.  Of course, most people that move to Atlanta move to one of it’s sprawling suburbs, where you can deal with widely varying sales tax rates.

Georgia is a destination-based sales tax state, though, so even if you do relocate to Midtown or Buckhead, your in-state buyers will pay the sales tax rate from their own Georgia locality.

5. Las Vegas: 8.10%

Why They’re Moving: If you know how to make money, you can do it in Las Vegas. It’s a tourist city with tons of dollars flying in and out of pockets every day. Strangely, the cost of living is cheap if you know where to live and where to go.

What to Expect: Nevada’s sales tax rate is 4.6% with a Clark County addition of 3.5%, totaling at 8.10%. They’re much more interested in taking your money in other ways in Las Vegas. Plus, Nevada is another destination-based sales tax state, so you won’t have to charge your buyers that 8.10%. Instead, you’ll charge them the sales tax rate from their own locality within the state.

6. Dallas: 8.25%

Why They’re Moving: The area that has become known as the Silicon Prairie boasts a number of tech startups and corporations, including heavy hitters like AT&T. There are also a large amount of museums and other cultural sights to see.

What to Expect: There’s no county sales tax to worry about, but you do have district as well as the city. So look to pay an 8.25% sales tax on purchases in Dallas: 6.25% for the state, 1% for the city, and 1% for the district.

Further, Texas is an origin-based sales tax state. This means you’ll be required to charge your buyers that 8.25% rate, too. Do you think a high sales tax rate may turn your fellow Texans off? If you move to Dallas, you just might fine out.

7. Houston: 8.25%

Why They’re Moving: The oil and gas industries are booming in this town, and Houston actually has a pretty vibrant nightlife. In fact, it was named Forbes’ Coolest City in 2013, with the Space Center being a fun draw for many.

What to Expect: Sales tax here is about the same as in Phoenix, just with different factors at play. Businesses can expect a base Texas rate of 6.25% as well as 1% for Houston and 1% for district sales tax, bringing the total to 8.25% – just like Dallas. Again, Texas is an origin-based sales tax state, so expect to charge your buyers this 8.25%, too.

8. Phoenix: 8.30%

Why They’re Moving: While Phoenix was hit pretty hard by the housing crisis, the area is quickly turning itself around. Tons of corporations operate here, including Intel and many banks, such as Bank of America.

What to Expect: Phoenix’s sales tax rate totals out at 8.30%. Arizona’s base rate is 5.6%, but add onto that 0.7% for Maricopa County and Phoenix sales tax rate of 2%.

Any online seller who already lives in Phoenix or who has sales tax nexus in Arizona due to Amazon’s Fulfillment by Amazon program already knows that Arizona is a strange state. Not only do you have to file for a state sales tax permit, you must file in Phoenix, too. To top that off, Arizona is an origin-based sales tax state, meaning that your Arizona buyers will pay this slightly hefty 8.30% rate.

9. Chicago: 9.25%

Why They’re Moving: As CNN Money points out, Chicago is a sort of “New York lite.” You get a lot of the trappings of living in a huge American metropolitan area, but without the astronomical cost of living. Chicago is also another city that enjoys tons of cultural opportunities and nightlife options.

What to Expect: As cheap as the cost of living is, the sales tax situation is about as bad as Seattle, adding up to 9.25%. Illinois’ base rate is 6.25%, but you also have 0.75% for Cook County, 1.25% for Chicago, and 1% for district rate.

10. Seattle: 9.5%

Why They’re Moving: Seattle is definitely a unique place. We all know it for it’s gallons of rain, of course, but just as much delicious artisan coffee flows. Unique niches abound as well as all sorts of employment and business opportunities. Plus if you love soccer, there’s almost no better place (in the U.S.) to live.

What to Expect: Our highest totals yet. It’s a little expensive to do business in Seattle it seems. 6.5% is the base rate for Washington, but also look for a giant 3% rate for Seattle itself, bringing a Seattle shopper’s sales tax total to 9.5%.

That said, if you’re an online seller, you charge your Washington state buyers the sales tax from their own locality, since Washington is a destination-based sales tax state.

Illinois is another origin-based sales tax state. So if you sell goods online from your loft in the Windy City, expect your customers to fork over a steep 9.25% of their purchases in sales tax.

Start the conversation! Which of these cities would you most like to start a business in?

Start your 30 day free trial of TaxJar. No credit card required.
AIRPRESS LOADED

Cached Query Manual Filing?filterByFormula=OR({State} = "") needs refreshing in 214