Appendix 6

Table 16

Tax Study States' Sales Tax Rates

STATE

TAX RATES & EXEMPTIONS (as of 7/1/96)

EXEMPTIONS (as of 11/94 and reported in most recent ACIR publication)


Food

Prescription Drugs

Non-Prescription Drugs

Telecommunications Services

Electric and Gas Utilities- Residential Use

Personal Services

Rental of Rooms and Lodgings

Custom Computer Programs

Sale of Materials to Manufacturers, Producers, Processors

Repairers

States Granting Related Tax Credit

Connecticut (a)

6

x

x



x

x



x



Florida *

6

x

x

x


x

x


x

x (b)

x


Maine

6

x

x



x (c)

x



x



Massachusetts (d)

5

x

x



x

x

x (e)

x

x



Minnesota *

6.5

x

x

X


x (c)

x (f)


x

x



New Hampshire

No Tax


New York * (g)

4

x

x

x

(h)

x

x


x

x

x (i)(j)


North Carolina * (k)

4


x


x


x


x

x (b)

x


Oregon

No Tax












Vermont

5

x

x


x

x

x

x

x

x (b)

x

Washington * (l)

6.5

x

x


(m)

x (n)

limited (f)


x

x (b)

x


Wisconsin * (o)

5

x

x



limited

x


x

x (b)



Notes:

Source: The Federation of Tax Administrators on Internet site: http://sso.org/fta/sales.html and Significant Features of Fiscal Federalism, Volume 1, 1995, published by the Advisory Commission on Intergovernmental Relations

*- Local sales taxes are additional

a- Clothing costing less than $50 is exempt.

b- If becoming an ingredient or component part of property manufactured.

c- Maine exempts the first 750 kilowatt hours of residential electricity per month. Minnesota exempts residential use of natural gas or electricity for heating purposes from November through April.

d- Any individual clothing item costing more than $175 is taxable on the amount over the basic exemption. Exemption does not apply to sports and specialty clothing.

e- In Massachusetts there is a separate room occupancy excise tax of 5.7% with a local option of up to an additional 4%.

f- Enumerated services are taxable.

g- Many cities and counties impose an additional rate of 3%, for a combined state and local rate of 7%. New York City and several other localities have authority to impose a local rate in excess of 3%. The state also collects the metropolitan commuter transportation district tax of .25% in 12 counties.

h- Interstate and international services are exempt for New York.

i- Exempt when billed separately from materials.

j- Books must show receipts separately for sales and services.

k- Toll telecommunication services or private telecommunication services that originate and terminate in the state are not subject to franchise tax are taxed at 6%. Local communication services are taxed at 3%.

l- Sale of natural or manufactured gas are exempt. Sales of materials to repairers are exempt only if they are ingredients of products for resale. Repair of tangible personal property is subject to sales tax; the repairer collects tax on labor and materials from the customer.

m- Local residential service is exempt.

n- Generally taxes business activities under the gross receipts tax and interstate telecommunications gross receipts tax.

o- Residential use of natural gas or electricity for heating purposes is exempt from November through April.