Reliance on sales taxes in Colorado is above national average, study finds

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Published Thursday, March 18, 2021
by The Center Square

As a share of total state and local tax revenues, sales tax collections in Colorado came in at 26.7 percent, representing the 19th highest percentage among the 50 states, according to a new Tax Foundation analysis.  

That percentage was above the average level of state reliance on sales taxes (23.3 percent). 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 says.

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 states, and 38 allow local governments to collect separate sales taxes.

Which States Are Most Dependent on Sales Taxes?

Rank

State

% of Total State and Local Revenues Coming From Sales Taxes

1

Louisiana

42.3%

2

Nevada

41.3%

3

Tennessee

40.7%

4

Arizona

40.5%

5

South Dakota

39.3%

6

Florida

38.3%

7

Arkansas

37.8%

8

New Mexico

37.3%

9

Hawaii

36.7%

10

Washington

36.4%

11

Texas

34.5%

12

Oklahoma

32.7%

13

Mississippi

31.7%

14

Alabama

30.5%

15

Kansas

29.6%

16

Indiana

28.5%

17

Missouri

27.4%

18

Ohio

26.8%

19

Colorado

26.7%

20

Idaho

26.6%

21

Wyoming

26.5%

22

North Carolina

26.2%

23

Georgia

23.9%

24

Utah

23.9%

25

Nebraska

22.5%

26

Michigan

22.3%

27

Iowa

22.2%

28

South Carolina

21.1%

29

Maine

20.6%

30

Kentucky

20.3%

31

Wisconsin

20.2%

32

North Dakota

20.1%

33

California

19.7%

34

Illinois

18.4%

35

West Virginia

18.1%

36

Rhode Island

17.1%

37

Pennsylvania

17.0%

38

Minnesota

16.9%

39

New York

16.6%

40

New Jersey

15.9%

41

Connecticut

14.9%

42

Massachusetts

13.5%

43

Virginia

13.0%

44

Maryland

12.0%

45

Vermont

10.4%

46

Alaska

6.9%

47 (tie)

Delaware

0.0%

47 (tie)

Montana

0.0%

47 (tie)

New Hampshire

0.0%

47 (tie)

Oregon

0.0%

Source: Tax Foundation

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