There was a time when the federal government relied on income taxes for its revenue stream, state and local government got sales taxes, and county government and schools relied on property taxes.
Nowadays, that’s all scrambled as entities scramble for tax dollars. In the end, sales taxes are more popular than ever as cities and counties look for short-term answers to revenue needs and capital projects.
The Tax Foundation this week reported that the average combined state and local sales tax rate in Oklahoma is the fifth highest in the anation. The average combined rate is 8.67 percent. Norman’s combined city, state and county tax rate is 8.25 percent, with 4.5 percent of that going directly to state government, 0.25 percent going to the county for the new jail and the remainder, 3.5 percent, going directly to the city.
States with higher rates than Oklahoma are Tennessee, Arizona, Louisiana and Washington. Tennessee is the highest with a combined rate of 8.44 percent.
The Tax Foundation, according to a Tulsa World report, says Oklahoma is one of the few states that still apply sales tax to groceries. Cities and towns have fought efforts at the legislature to remove taxes on groceries, saying it would hurt their operating revenue.
Several bills introduced this legislative session would remove long-standing sales tax exemptions. We expect heavy opposition as such services as barbers, advertising, dentists, doctors and lawyers don’t want to get into the practice of collecting sales tax on their services.
This editorial first appeared in the Norman Transcript.