- Two Alabama cities top a new ranking of U.S. cities with the highest combined state and local sales tax rates, a study released on Wednesday found.
Birmingham and Montgomery, Alabama, have sales tax rates of 10 percent, the steepest in the country, said The Tax Foundation, a conservative tax research group. - The Tax Foundation, which promotes lower taxes generally, said disparities in sales taxes can motivate shoppers to travel from one jurisdiction to another to avoid high taxes.
"For example, strong evidence exists that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago's high sales tax rates," the study said.
Chicago's combined rate is 9.5 percent, the nation's third-highest after the two Alabama cities.
Econ 101. And exactly what we've been saying here for years now.