SECTION THREE: SALES TAX

Vermont ranks 9th/10th among the comparison states with respect to general sales & use tax liability. (It is tied for lowest among states with a sales tax.) Except for North Carolina, which taxes retail grocery food, the sales tax base in all of our study states is virtually identical. Estimated sales taxable purchases by income group were obtained from the US Bureau of the Census Consumer Expenditure Survey. The sales tax findings are below:

• North Carolina, with a 6.0% sales tax, has the highest sales tax because retail grocery food is included in the tax base.

• Minnesota and Washington have the next highest tax rate at 7.0% each.

• Florida and New York are tied for 3rd place with a sales tax of 6.5%.

• Connecticut and Maine follow with a sales tax of 6.0%.

• Vermont and Massachusetts have the lowest sales tax at 5.0%.

• New Hampshire and Oregon do not have a sales tax.

Note: In the tables that follow, the sample cases have been kept in the same "income groups" in which they appeared previously in this report. However, we want to caution the reader that these groups could lead to erroneous comparisons if the source data is not considered. For example, in the "Income Group: $0 to $15,000" table directly below, it appears that the taxpayer "Single under 65 " with an AGI of $7,740 is taxed ($100) less than the "Single over 65&qu ot; taxpayer ($166) with the same $7,740 AGI. The case study information in the Appendix to Volume II shows that the "Single under 65" taxpayer (Case#1) gets his or her entire AGI of $7,740 from wages, while the "Single over 65" taxpayer (Case #16) gets his or her AGI of $7,740 from interest, dividends, capital gains, and the taxable portion of a pension payment. However, the "Single over 65" taxpayer also has $1,147 of untaxable pension receipts and $10,032 of untaxable So cial Security payments. This amounts to an additional $11,179 of disposable income for the "Single over 65" taxpayer. For that reason, the sales tax burden in the chart below is higher for the over 65 taxpayer.

Sales Tax - Income Group: $0 - $15,000

Profile		Single<65	HOH<65	Single>65	MFJ>65	HOH<65
		Case #1	Case #13	Case #16	Case #19	Case #24
AGI ($)		7,740	10,630	7,740	10,360	0
	Tax Rate	Tax ($)	Tax ($)	Tax ($)	Tax ($)	Tax ($)
State
Connecticut	6.0%	120	164	199	269	120	6-7
Florida	6.5%	130	177	215	291	130	4-5
Maine	6.0%	120	164	199	269	120	6-7
Massachusetts	5.0%	100	136	166	224	100	9-10
Minnesota	7.0%	140	191	232	314	140	2-3
New Hampshire	0.0%	0	0	0	0	0	11
New York	6.5%	130	177	215	291	130	4-5
North Carolina	6.0%	228	297	345	425	228	1
Oregon	0.0%	0	0	0	0	0	11
Vermont	5.0%	100	136	166	224	100	9-10
Washington	7.0%	140	191	232	314	140	2-3
Wisconsin	5.5%	110	150	182	247	110	8

Sales Tax - Income Group: $15,000 - $30,000

Profile		Single<65	MFJ<65	Single>65	HOH<65
		Case #2	Case #7	Case #17	Case #25
AGI ($)		19,104	19,224	15,409	18,000
	Tax Rate	Tax ($)	Tax ($)	Tax ($)	Tax ($)
State
Connecticut	6.0%	199	199	269	199	6-7
Florida	6.5%	215	215	291	215	4-5
Maine	6.0%	199	199	269	199	6-7
Massachusetts	5.0%	166	166	224	166	9-10
Minnesota	7.0%	232	232	314	232	2-3
New Hampshire	0.0%	0	0	0	0	11
New York	6.5%	215	215	291	215	4-5
North Carolina	6.0%	345	345	425	345	1
Oregon	0.0%	0	0	0	0	11
Vermont	5.0%	166	166	224	166	9-10
Washington	7.0%	232	232	314	232	2-3
Wisconsin	5.5%	182	182	247	182	8

Sales Tax - Income Group: $30,000 - $50,000

Profile		Single<65	MFJ<65	MFS<65	MFJ>65
		Case #3	Case #8	Case #11	Case #21
AGI ($)		36,190	36,190	36,156	36,172
		Tax ($)	Tax ($)	Tax ($)	Tax ($)
State
Connecticut	6.0%	325	325	325	401	6-7
Florida	6.5%	352	352	352	435	4-5
Maine	6.0%	325	325	325	401	6-7
Massachusetts	5.0%	271	271	271	335	9-10
Minnesota	7.0%	379	379	379	468	2-3
New Hampshire	0.0%	0	0	0	0	11
New York	6.5%	352	352	352	435	4-5
North Carolina	6.0%	495	495	495	592	1
Oregon	0.0%	0	0	0	0	11
Vermont	5.0%	271	271	271	335	9-10
Washington	7.0%	379	379	379	468	2-3
Wisconsin	5.5%	298	298	298	368	8

Sales Tax - Income Group: $50,000 - $100,000

Profile		Single<65	MFJ<65	MFJ>65
		Case #4	Case #9	Case #22
AGI ($)		53,445	53,445	84,627
		Tax ($)	Tax ($)	Tax ($)
State
Connecticut	6.0%	373	373	804	6-7
Florida	6.5%	404	404	871	4-5
Maine	6.0%	373	373	804	6-7
Massachusetts	5.0%	311	311	670	9-10
Minnesota	7.0%	435	435	938	2-3
New Hampshire	0.0%	0	0	0	11
New York	6.5%	404	404	871	4-5
North Carolina	6.0%	588	588	1,045	1
Oregon	0.0%	0	0	0	11
Vermont	5.0%	311	311	670	9-10
Washington	7.0%	435	435	938	2-3
Wisconsin	5.5%	342	342	737	8

Sales Tax - Income Group: $100,000 +

Profile		Single<65	MFJ>65	MFJ<65		MFJ<65
		Case #5	Case #23	Case 326		Case #27
AGI ($)		108,284	108,284	191,953		421,506
		Tax ($)	Tax ($)	Tax ($)		Tax ($)
State
Connecticut	6.0%	804	804	1,608	6-7	2,680	6-7
Florida	6.5%	871	871	1,742	4-5	2,904	4-5
Maine	6.0%	804	804	1,608	6-7	2,680	6-7
Massachusetts	5.0%	670	670	1,340	9-10	2,234	9-10
Minnesota	7.0%	938	938	1,876	2-3	3,127	1-2
New Hampshire	0.0%	0	0	0	11	0	11
New York	6.5%	871	871	1,742	4-5	2,904	4-5
North Carolina	6.0%	1,045	1,045	1,880	1	2,982	3
Oregon	0.0%	0	0	0	11	0	11
Vermont	5.0%	670	670	1,340	9-10	2,234	9-10
Washington	7.0%	938	938	1,876	2-3	3,127	1-2
Wisconsin	5.5%	737	737	1,474	8	2,457	8