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Report: Connecticut Sales Tax Not as High as Appears

A report shows that if you factor in the local taxes allowed in other states, Connecticut ranks much better than previously thought.

Connecticut has the eleventh highest sales tax in the nation, but a report from the state Office of Legislative Research makes the case that Connecticut 6.35 percent rate is lower than most other states when other factors are included. 

According to the report: 

Many states allow counties and municipalities to levy sales taxes. Thus, the rates in these states vary across localities and, in some cases, the combined state and local rates are substantially higher than the state's base sales tax rate. When Connecticut is compared with other states based on combined state and local rates, its rank drops from 11th to 31st.

Another reason why the sales tax doesn’t seem as high is because, as a whole, Connecticut residents spend a lower percentage of their money on taxable goods than other states. According to the report, 26.19 percent of personal income in Connecticut is spent on taxable goods. The national average is 34.5 percent.

"We're really kind of middle-of-the-pack with our sales tax," Kevin B. Sullivan, Department of Revenue Services Commissioner, told the CT Mirror. "Even regionally we're in the hunt."

The highest sales tax in the nation when the average local tax is included is Alabama, at 9.43 percent. Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax. The full report can be found on the CT Mirror

While Connecticut’s sales tax appears to be more competitive than originally thought, the same cannot be said about its income taxes. By one measure in the nation.

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