The Tax Foundation has released its midyear assessment of sales tax rates across major cities. While there are more than 10,000 separate sales tax jurisdictions with varying rates, this study focused on 115 cities with populations greater than 200,000. Even in this small sample, rates vary greatly.
They range from a high of 10.25% in Long Beach CA and Chicago IL to a low of 0% in Portland OR and Anchorage AK. Reno comes in the lower half of cities, ranked 70th with a combined state and local tax rate of 7.725 percent. Meanwhile, the Clark County cities of Las Vegas, North Las Vegas, and Henderson tied for 45th place. Their 8.15% rate put them into the upper half of rankings. (The base sales tax rate for Nevada is 6.85%)
The post also discusses how tax rates can spur competition among neighbors. Sales tax avoidance is most likely to occur in areas where there is a significant difference between two jurisdictions’ sales tax rates. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs. This isn’t an issue in Clark County, where the rates are uniform between cities and there are no major suburbs outside of county lines. However, it could become a factor in Reno, where three other counties are within 30 minutes.