Three U.S. Cities with the Highest Sales Taxes in the Nation

The downtown Chicago skyline, including the Willis Tower, formerly known as the Sears Tower, are seen in this aerial photograph over Chicago, Illinois, May 30, 2013. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
SAUL LOEB/AFP/Getty Images

Chicago has tied for first place as the city with the highest sales tax in the nation, according to a recent sales tax rates report.

Two California cities, Long Beach and Glendale, also came in first place, the report by the Tax Foundation, a Washington-based, non-partisan tax research organization, discovered.

“The three cities each levy a combined state and local sales tax of 10.25 percent on purchases,” Fox Business reported.

“In Chicago, consumers pay a 6.25 percent to the state, along with an additional 1.25 percent to the city, 1.75 percent to Cook County and another 1 percent to the transit authority. Added up, the result is an extra $10.25 on every $100 spent,” the report said.

In its 2019 midyear report, the Tax Foundation said that Tacoma and Seattle, Washington, and Birmingham, Alabama, trailed just behind the first three with rates of ten percent or higher.

The report also stated that Portland, Oregon, and Anchorage, Alaska, do not have a state or local sales tax. Additionally, Honolulu, Hawaii, has the third-lowest rate of sales tax with a rate of 4.5 percent, along with several other major cities that keep their rates low, including Richmond, Virginia.

However, Illinois Policy, a group that promotes personal freedom and prosperity, wrote on August 14 that Chicago lawmakers have ignored the need to slow the city’s spending habits.

“Years of corruption, fiscal irresponsibility and a worsening pension crisis have allowed Chicago’s lawmakers to turn to taxes, fines and debt to generate revenue instead of slowing the growth of spending,” the report said. “The only way Chicago can give up the embarrassing title of highest sales tax rate in the U.S. is to reform the long-standing practices that have earned the city this distinction.”

Chicago Mayor Lori Lightfoot is set to present plans to fill a $740 million gap in the city’s 2020 budget during a speech on August 29, according to a Crain’s Chicago Business report.

Lightfoot said that she will get “some help” from increases in city tax increment financing revenues; however, she said most of that money is already going to the Chicago Transit Authority and other projects, according to the report.

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