Oklahomans pay some of the highest total sales tax rates in the U.S.
A review by the Tax Foundation ranks the state sixth, with an average combined state and local sales tax rate of 8.78 percent. Policy Analyst Jared Walczak said Oklahoma is a bit of an outlier.
"Oklahoma relies much more heavily on a sales tax than most states," Walczak said. "Almost a third of all state tax revenue comes from the sales tax in Oklahoma. That's not the case in most states, where it's less than a quarter of all state and local revenue."
Oklahoma’s state sales tax is 4.5 percent, while the average local sales tax is 4.28. The highest local rate in Oklahoma is 6.5 percent.
While the rate ranks sixth, Oklahoma’s sales tax collections rank 38th.
"Income per capita is lower than the national average in Oklahoma, and particular types of transactions, particularly transaction subject to sales tax, are lower in Oklahoma," Walczak said.
Part of Oklahoma’s low collection totals is sales tax doesn’t apply to services. Some states’ sales taxes, like New Mexico’s, do.
"You have someone near Oklahoma that is doing that, that has a fairly low rate but has a much broader base, and is, therefore, able to collect more revenue than you might expect," Walczak said.
New Mexico’s state sales tax is higher than Oklahoma’s, but its average local rate is about half as high.
Tennessee had the highest combined sales tax rate at 9.46 percent. The lowest among states with a sales tax is Alaska, at 7.5 percent.
