CNHI News Service

Indianapolis — While the fight over online sales tax collections wages on, budget-weary cities and states across the nation are taxing consumption at near record rates.

Since 2003, local and state tax jurisdictions have created almost 2,000 new sales taxes to scoop up billions of dollars in new revenues. The Federation of Tax Administrators reports 542 new sales taxes or sales tax rate increases in 2010. There were only 52 sales tax decreases last year.

The combined average sales tax — when you toss in levies imposed by tribal governments and special taxing districts — is now more than 9 pennies on the dollar, according to Vertex Inc., a Pennsylvania-based tax technology firm that’s been tracking sales taxes for retailers since 1982.

The people who run the governments that provide the services paid for with those tax revenues say they need the extra cash. A case in point: An additional 2 percent local tax tops off the sale of alcoholic beverages in the college town of Normal, Ill.

“When you have a high population of people reaching the drinking age like we do, the cost of law enforcement goes up,” Normal Mayor Chris Koos said.

The 45 states that collect a sales tax vary on how dependent they are on it. About 30 percent of all state revenues combined came from sales taxes last year, revenue records show. But in Florida, it makes up more than half the revenue pie; Vermont leans on it for only about 12 percent of its revenues.

The average state sales tax rate also rose last year to 6 percent. California has the highest at 7.25 percent, followed by five states at 7 percent: Indiana, Mississippi, New Jersey, Rhode Island and Tennessee.

Colorado imposes the lowest state sales tax, 2.9 percent, followed by five states at 4 percent: Alabama, Georgia, Hawaii, Louisiana and New York.

Five states do not levy a sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Some of the nation’s biggest cities take some of the biggest sales-tax bites when they couple their local sales tax with their state sales tax.

Chicago and Los Angeles tack on 9.75 percent on most purchases; San Francisco and Seattle take a 9.5 percent cut. New Orleans collects 9 percent, just a fraction more than New York City does at 8.875 percent.

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