U.S. Cities Increasing Sales Taxes in Record Fashion

Over 485 Cities Raised Sales Tax Rates in 2007 According to Vertex Study

BERWYN, Pa.--(BUSINESS WIRE)--In 2007, 485 U.S. cities increased their sales tax rate. Of those, 178 were newly imposed city tax rates and 307 were straight increases in existing city tax rates. This represents the largest annual expansion in the number of cities who either increased their existing rate or initiated a sales tax in the past four years, according to the annual sales tax rate study released today by Vertex Inc.

North Courtland, Ala., had the largest increase nationwide, rising from a 1.0 percent sales tax rate to 4.0 percent. Seldovia, Alaska, experienced the second largest increase from 2.0 percent to 4.5 percent, followed by Fredonia, Ariz., and Watts, Okla., with increases from 2.0 percent to 4.0 percent.

Several large U.S. cities also raised their sales tax rates between 0.1 and 0.2 percent in 2007, including Boulder, Colo.; Phoenix, Ariz.; St. Louis, Mo., and areas of Denver, Colo. and Seattle, Wash. States with the most number of city rate increases included Colorado, Missouri, Texas and Washington.

Also in 2007, Catawba Indian Reservation, South Carolina, joined Wrangell, Alaska, in having the highest city sales tax rate of 7.0 percent. South Carolina was the only state to raise its state-wide sales tax rate, from 5.0 percent to 6.0 percent.

“It is evident from the more than 450 cities raising sales tax rates last year that local governments see tax revenue as a viable part of the solution in addressing revenue shortfalls. It is especially critical that corporate taxpayers stay abreast of these sales tax rate adjustments and keep close records of all their transactions in order to remain in compliance and be prepared for potential state audits,” says John Minassian, Vice President of Tax Content Development.

The report revealed that 2007 sales tax rates remained higher than any previous year among those cities increasing an existing rate, illustrating an overall steady growth in the combined state, county and city average rate since Vertex began tracking the data in 1981. However, the average U.S. sales tax rate among all taxing cities decreased slightly in 2007 to 8.573 percent, as compared to 8.579 percent in 2006, due to the number of cities initiating lower rates on first-time taxes.

The Vertex Sales Tax Rate Report is compiled annually by Vertex Research and provides a detailed summary of sales tax rate changes at the state, county, city, and district levels nationwide.

Vertex’s complete 2007 Sales Tax Rate Report is available on the Vertex Inc. Web site at vertexinc.com. To speak with a representative of Vertex about the report, please contact Kristy Lash at Gregory FCA at 610-642-8253 or [e-mail].

ABOUT VERTEX INC.

With nearly 30 years of experience, Vertex Inc. is the leading provider of advanced tax technology solutions, delivering products and process management services to customers worldwide.

Vertex solutions help companies streamline tax compliance processes and leverage information to discover new strategic tax savings. In addition, they enhance decision information across every major line of business tax, including income, sales, consumer use, value added, communications, and payroll. To serve its customers, Vertex works in partnership with the world’s leading providers of ERP software and related services.

Founded in 1978, Vertex is a privately held company that employs over 600 professionals at its headquarters in the U.S. (Berwyn, Pa.) and Europe (London), and its offices in Atlanta, Dallas, Phoenix, San Francisco, Sarasota, and Washington, DC.

For more information about Vertex, visit the Web site at www.vertexinc.com.