While the Legislature wrangles over a state income tax cut and Congress dawdles over Internet sales tax collections, Oklahoma rises to near the top in a comparison of state and local sales taxes.
Much is made of the argument that Texas, which has no personal income tax, docks its citizens in other ways. The “it’s a wash argument” plays well and rings with truth. Yet The Tax Foundation says the average combined local/state sales tax rate south of the Red River ranks 11th. Oklahoma ranks fifth, meaning that only four states have a state/local sales tax burden greater, on average, than Oklahoma.
Some states levy high income taxes, property taxes and sales taxes. Yet when it comes to sales taxes alone, Oklahoma really stands out. One reason, as we’ve noted many times, is that municipal governments depend almost entirely on the sales tax for general revenues. This isn’t true elsewhere.
It’s also the reason Oklahoma continues to tax groceries and medicines. City governments depend on this, particularly in small towns where not much but groceries is on offer.
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