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Local sales taxes are collected in 38 states. The five states with the highest average combined state and local sales tax rates are Louisiana (9.98 percent), Tennessee (9.46 percent), Arkansas (9.30 percent), Alabama (9.01 percent), and Washington (8.92 percent).
State and Local Income Tax Withholding. State employees who live or work outside of Texas may be subject to state or local income taxes in addition to federal income taxes. Most states have state personal income taxes. Many localities also have income taxes that require withholding. For example, a Comptrollerâs office employee working in the Oklahoma area is subject to Oklahoma state income tax, as well as local taxes where required. State agencies must comply with applicable tax laws and ordinances for each state or municipality where their employees work. To do this, a state agency must establish itself as an employer with the state or local tax authority and calculate and remit taxes appropriately. For more information on state and local taxes, contact the appropriate state or local taxing authority. Contact information for taxing authorities in a particular state is often listed on the stateâs website.