As a share of total state and local tax revenues, sales tax collections in Texas account for 34.5 percent– the 11th highest percentage of all 50 states, according to a new Tax Foundation analysis. The study is based on the most recent data available from FY 2018 tax collections.
Texas’ percentage is well above the average level of state reliance on sales taxes of 23.3 percent.
Consumption levies like sales taxes are considered more stable than others like state income taxes, during economic downturns, according to the report. During the coronavirus era, sales tax collections initially dropped, but recovered as more businesses reopened and consumers turned to online venues to purchase products.
Four states – Delaware, Montana, New Hampshire and Oregon – have no state or local sales taxes. Alaska allows for local sales taxes but has no statewide sales tax. The remaining 45 states have statewide sales taxes in place, and 38 states allow local governments to collect separate sales taxes.
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States 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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