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QUESTION: How do local sales and use taxes affect ERI cost-of-living differentials calculations?
The Geographic Assessor calculations incorporate local sales and use tax differentials within the calculations for consumables costs, auto care, home maintenance, health care products, etc. Local sales and use tax rates are individually researched (for each state/province, county or city) and these figures help us to refine our analysis of area differentials. Please note that, in some cases, the effect of local taxes is net zero, in that wholesale and retail chains charge slightly less for products in high sales and use tax areas. Many employees are concerned about local differentials in sales tax rates; but, the truth is that this particular research category has very little effect on overall cost of living differentials.