Earlier this week, the Washington, DC-based think tank released its report, “Metropolitan Sales Tax Rates, Mid-Year 2024,” which “calculates average combined state and local sales tax rates by state, using ZIP code-level sales tax and population data.”

The Tax Foundation defines large U.S. cities as “census-designated incorporated places with a population of over 200,000.”

“Sales tax avoidance is most likely to occur in areas where there is a significant difference between the sales tax rates of two jurisdictions,” said Jared Walczak, vice president of government projects at the Tax Foundation, in a press release. “Leading research shows that consumers can and do leave high-tax jurisdictions to make major purchases in low-tax jurisdictions.”

It’s quite normal for Washington residents to shop in Oregon because there is no retail sales tax. Food, alcohol, clothing, and other items tend to be cheaper on the Oregon side of the border. Because of the sales tax difference, Washington residents can save even more on items like appliances, furniture, and electronics.

Seattle in King County and Tacoma in Pierce County are prominently featured at the beginning of the report.

“Among major cities, Seattle, Washington State, has the dubious honor of charging the highest combined state and local sales tax rate at 10.35 percent,” the report said.

Washington State charges a sales tax of 6.5% and the Emerald City charges a sales tax of 3.85%, for a total tax rate of 10.35%.

“The city surpassed Tacoma, Washington, at 10.3 percent in April, when King County (where Seattle is located) implemented an additional 0.1 percent sales tax to generate additional funds for nonprofits that provide cultural programs,” the report continued. “Tacoma’s current rate will remain in effect through 2021.”

The Center Square asked Mark Harmsworth, director of the Center for Small Business at the Washington Policy Center think tank, for his opinion on two Washington cities that top the list of major cities with the highest state and local sales tax rates.

In some smaller cities, taxpayers are hit even harder, he stressed.

“Ironically, my own town, Mill Creek and Lynnwood share the highest sales tax rate (in the state) – 10.6%,” Harmsworth noted in an email to The Center Square. “High sales tax rates certainly pose a problem not only for retailers, but also for service providers who are subject to the same rate when providing services, in some cases even remotely. A high rate drives businesses to locate in other locations.”

Mill Creek is a city of nearly 21,000 residents located about 20 miles northeast of Seattle. Lynwood, with a population of over 43,000, is part of the Seattle metropolitan area and is located 16 miles north of Seattle. Both cities are in Snohomish County.

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“I would predict that tax rates in Washington would be much higher if it weren’t for the limitations described in state law (RCW 35.102) on the amount of taxes municipalities can levy,” Harmsworth concluded.

Chicago, Illinois, and three cities in California—Long Beach, Fremont, and Oakland—have the third-highest sales tax, both for the state and among major cities, at a total of 10.25%.