Alabama has the fourth-highest state and local combined sales tax rate in the nation in 2023, according to a recent analysis by the Tax Foundation.
Four of the five states with the largest sales tax burdens were located in the southeastern U.S.
The five states with the highest average combined state and local sales tax rates were Louisiana (9.550%), Tennessee (9.548%), Arkansas (9.46%), Alabama (9.25%) and Oklahoma (8.98%).
Alabama's state sales tax rate is the 40th-highest in the nation at 4%. However, the average sales tax rate levied by local governments is the highest in the nation at 5.25%.
The five states with the highest average local sales tax rates were Alabama (5.25%), Louisiana (5.10%), Colorado (4.88%), New York (4.52%) and Oklahoma (4.4%).
Alabama is also one of the few states in the nation that taxes groceries at its full sales tax rate.
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