Reliance on sales taxes in Louisiana highest among all 50 states, study finds

The Center Square

As a share of total state and local tax revenues, sales tax collections in Louisiana came in at 42.3%, representing the highest percentage among the 50 states, according to a new Tax Foundation analysis.  

That percentage was well above the average level of state reliance on sales taxes (23.3%). The Tax Foundation study is based on the most recent data available, which reflects tax collections during fiscal year 2018. 

Consumption levies such as sales taxes are considered more stable than other taxes, including state income taxes, during economic downturns, according to the Tax Foundation. During the coronavirus era, sales tax collections initially dropped, but they recovered as more businesses reopened and consumers turned to online venues for products, the study said.

Four states – Delaware, Montana, New Hampshire and Oregon – have no state or local sales taxes, while Alaska allows for local sales taxes but has no statewide sales tax, according to the Tax Foundation. The remaining 45 states have statewide sales taxes in place, the study said, and 38 allow local governments to collect separate sales taxes.

Which States Are Most Dependent on Sales Taxes?

RankState% of Total State and Local Revenues Coming From Sales Taxes
1Louisiana42.3%
2Nevada41.3%
3Tennessee40.7%
4Arizona40.5%
5South Dakota39.3%
6Florida38.3%
7Arkansas37.8%
8New Mexico37.3%
9Hawaii36.7%
10Washington36.4%
11Texas34.5%
12Oklahoma32.7%
13Mississippi31.7%
14Alabama30.5%
15Kansas29.6%
16Indiana28.5%
17Missouri27.4%
18Ohio26.8%
19Colorado26.7%
20Idaho26.6%
21Wyoming26.5%
22North Carolina26.2%
23Georgia23.9%
24Utah23.9%
25Nebraska22.5%
26Michigan22.3%
27Iowa22.2%
28South Carolina21.1%
29Maine20.6%
30Kentucky20.3%
31Wisconsin20.2%
32North Dakota20.1%
33California19.7%
34Illinois18.4%
35West Virginia18.1%
36Rhode Island17.1%
37Pennsylvania17.0%
38Minnesota16.9%
39New York16.6%
40New Jersey15.9%
41Connecticut14.9%
42Massachusetts13.5%
43Virginia13.0%
44Maryland12.0%
45Vermont10.4%
46Alaska6.9%
47 (tie)Delaware0.0%
47 (tie)Montana0.0%
47 (tie)New Hampshire0.0%
47 (tie)Oregon0.0%

Source: Tax Foundation