One thing you have to watch when it comes to taxes is where they actually get you. They being the taxing entity and you being the money in your wallet. While Louisiana is known for having on of the lowest state sales taxes in the nation, the add on of local taxes is where we the people find ourselves paying the freight.

The Tax Foundation does a survey a sales tax rates every July and this year Louisiana found itself one notch higher on the list. Our state has over taken Alabama for the number three spot in the country when it comes to sales tax. The Tax Foundation Survey showed that Tennessee, Arkansas, Louisiana, and Alabama topped the list. Washington came in at number 5 and which was a bit surprising considering the geographic location of the top four.

In a conversation with Scott Drenkard the Louisiana Radio Network reported these comments,

The statewide rate is just 4%, so one of the lower rates in the country, but local sales taxes add on average an additional 5.01% to the overall rate.

Drenkard is an economist with the Tax Foundation and he explained the reason for Louisiana's higher than most sales tax rate this way. He said our state has a generous homestead tax exemption but government makes up the difference via the sales tax.

In tax policy, sometimes if you have a good deal in one tax, they get you in another way by having a higher rate in a different tax.

For a lot of consumers the sales tax is almost invisible, until you get to the check out line. That is when you notice that what you thought was a bargain in the store is actually costing quite a bit more. Perhaps that is why our state's tax holidays are so  popular with shoppers.