CHAPTER 7. MARKUPS ANALYSIS 

TABLE OF CONTENTS 

7.1 INTRODUCTION .............................................................................................................. 7-1 

7.1.1 Baseline Markups................................................................................................. 7-3 

7.1.2 Incremental Markups ........................................................................................... 7-3 

7.1.3 Overall Markups .................................................................................................. 7-4 

7.2 ESTIMATION OF OEM, WHOLESALER, CONTRACTOR AND SALES TAX 

MARKUPS ......................................................................................................................... 7-4 
 

7.2.1 Financial Information Sources............................................................................. 7-4 

7.2.2 Weighted Markups............................................................................................... 7-8 

7.2.3 Sales Tax.............................................................................................................. 7-9 

REFERENCES .......................................................................................................................... 7-11 

LIST OF TABLES 

Table 7.2.1 Gross Profit Margins for Fixture OEMs*

.................................................................. 7-5
 

Table 7.2.2 Gross Profit Margins for Electrical Wholesalers*

..................................................... 7-6
 

Table 7.2.3 Calculated OEM Baseline Markups for Fluorescent Lamp Ballasts ........................ 7-6
 

Table 7.2.4 Calculated Electrical Wholesaler Baseline Markups for Fluorescent Lamp 

Ballasts............................................................................................................................. 7-6
 

Table 7.2.5 Calculated OEM Incremental Markups for Fluorescent Lamp Ballasts* ................. 7-7
 

Table 7.2.6 Calculated Electrical Wholesaler Incremental Markups for Fluorescent Lamp 

Ballasts*............................................................................................................................ 7-8
 

Table 7.2.7 Weighted Total Baseline and Incremental Markups for Fluorescent Lamp 

Ballasts............................................................................................................................. 7-9
 

Table 7.2.8 State and Local Sales Tax Rates............................................................................... 7-9
 

Table 7.2.9 Regional Average Tax Rates .................................................................................. 7-10
 

LIST OF FIGURES 

Figure 7.1.1 Ballast Distribution Channels.................................................................................. 7-1
 

7-i 

EERE-2007-BT-STD-0016 COMMENT 25
 

CHAPTER 7. MARKUPS ANALYSIS
 

7.1 INTRODUCTION 

This chapter describes the methodology the U.S. Department of Energy (DOE) followed 

in developing end-user prices and sales tax in the rulemaking analysis for fluorescent lamp 

ballasts. This chapter also provides initial results for ballast end-user prices and sales tax. 

In this rulemaking, DOE performed teardown analyses and a manufacturer markup 

analysis to develop manufacturer selling prices (MSPs) for representative ballast designs 

(chapter 5). DOE then applied distribution channel markups and sales tax to derive end-user 

prices. By combining the engineering analysis results and the distribution channel markups 

analysis, DOE derived typical inputs for use in the life-cycle cost (LCC) analysis and the 

national impact analysis (NIA). In particular, DOE developed end-user prices for ballast designs 

associated with a candidate standard level. 

The end-user equipment price depends on how the end-user purchases the equipment. 

Two types of distribution channels describe how most ballasts pass from the manufacturer to the 

end-user. The first distribution channel applies to ballasts installed in fixtures. In this distribution 

channel, the manufacturer sells the ballast to an original equipment manufacturer (OEM)—in 

this case, the fixture manufacturer—who in turn sells it to an electrical wholesaler (i.e., 

distributor), then to a contractor, and finally to the end-user. The second distribution channel 

applies to ballasts not installed in fixtures (e.g., replacement ballasts). In this distribution 

channel, the manufacturer sells the ballast to an electrical wholesaler, then to a contractor, and 

finally to the end-user. Figure 7.1.1 illustrates the two main distribution channels for ballasts. 

Figure 7.1.1 Ballast Distribution Channels 

7-1 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

DOE assumes ballasts in fixtures represent 63 percent of the market, and replacement 

ballasts represent 37 percent. These percentages are from the Fluorescent Ballasts Energy 

Conservation Standards Final Rule published on September 19, 2000 (hereafter “the 2000 Ballast 

Rule”). 65 FR 56740.1 

To meet new or amended energy conservation standards, manufacturers often introduce 

design changes to their product lines that result in increased production costs and MSPs. DOE 

assumes that some or all of the increased production costs can be passed through the distribution 

channels and eventually to end-users in the form of higher sales prices. 

At each point in the distribution channel, companies apply “markup” to the MSP to cover 

their business costs and profit margin. DOE models this markup as a multiplier. In financial 

statements, gross profit is the difference between the company revenue and the company cost of 

sales. It includes all corporate overhead costs (sales, general, and administration), materials and 

labor costs, research and development and interest expenses, depreciation and taxes, and profits. 

In order for sales of a product to contribute positively to company cash flow, the product’s 

markup must be greater than the sum of cost of sales and business costs for that product. DOE 

calculates the end-user sales price by multiplying the MSP by the various markups and applying 

sales tax. 

The end-user prices and installation costs are key inputs to the LCC analysis, payback 

period (PBP) analysis, and the NIA. Through the use of the distribution channel markups and 

installation costs, DOE can calculate the first costs that customers would face under the various 

efficiency levels evaluated. DOE evaluates the tradeoff between the increase in first cost and the 

resulting energy cost savings at each efficiency level in the LCC and PBP analyses (chapter 8) 

and NIA analysis (chapter 10). 

The following equation describes how DOE determined the equipment prices for ballast 

designs installed in fixtures: 

PEND = (PMFR × MUOEM × MUWHOLE × MUCONT × MUTAX ) Eq. 7.1

 Where: 

PEND = equipment price to the end-user ($), 

PMFR = MSP of baseline or standard-level equipment ($), 

MUOEM = OEM markup, 

MUWHOLE = wholesaler markup, 

MUCONT = contractor markup, and 

MUTAX = sales tax markup. 

For replacement ballasts, the equation is the same as above, except that the OEM markup 

( MUOEM ) is omitted. 

For each of the parties involved in the distribution of the equipment, the markups 

presented above are further differentiated between a “baseline markup” and an “incremental 

7-2 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

 

 

 

 

 

 

markup,” as described below. A third type of markup, the “overall markup,” describes the 

product of all the markups within a distribution channel. 

7.1.1 Baseline Markups 

Baseline markups are defined as coefficients that relate the manufacturer price of baseline 

ballast designs to the OEM, wholesaler or contractor baseline sales price, as shown in the 

following equations: 

POEM _ BASE = (PMFR _ BASE × MUOEM _ BASE) Eq. 7.2 

PWHOLE _ BASE = (POEM _ BASE × MUWHOLE _ BASE) Eq. 7.3 

PCONT _ BASE = (PWHOLE _ BASE × MUCONT _ BASE) Eq. 7.4 

PEND _ BASE = (PCONT _ BASE × MUTAX ) Eq. 7.5

 Where:
 

POEM _ BASE = OEM selling price of baseline equipment ($),
 

PMFR _ BASE = MSP of baseline equipment ($), 

MUOEM _ BASE = OEM markup for baseline equipment, 

PWHOLE _ BASE = wholesaler selling price of baseline equipment ($),
 

MUWHOLE _ BASE = wholesaler markup for baseline equipment, 

PCONT _ BASE = contractor selling price of baseline equipment ($),
 

MUCONT _ BASE = contractor markup for baseline equipment, 

PEND _ BASE = end-user purchase price for baseline equipment ($), and 

MUTAX = sales tax markup. 

For replacement ballasts, the equations are the same as above, except that the OEM 

( POEM _ BASE = (PMFR _ BASE × MUOEM _ BASE) ) is omitted, and the wholesaler baseline selling price is 

determined by applying the wholesaler baseline markup to the MSP for baseline equipment: 

PWHOLE _ BASE = (PMFR _ BASE × MUWHOLE _ BASE) Eq. 7.6 

7.1.2 Incremental Markups 

Incremental markups are defined as coefficients that relate changes in the manufacturer 

price of higher-efficiency equipment to change the OEM, wholesale, or contractor sales price, as 

shown in the following equations: 

POEM _ INCR = (PMFR _ INCR × MUOEM _ INCR) Eq. 7.7 

PWHOLE _ INCR = (POEM _ INCR × MUWHOLE _ INCR) Eq. 7.8 

PCONT _ INCR = (PWHOLE _ INCR × MUCONT _ INCR) Eq. 7.9 

7-3 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

PEND _ INCR = (PWHOLE _ INCR × MUTAX )	 Eq. 7.10 

Where: 

POEM _ INCR = incremental OEM price for equipment with increased efficiency ($), 

PMFR _ INCR = incremental manufacturer price for equipment with increased 

efficiency ($), 

MUOEM _ INCR = incremental OEM markup for equipment with increased efficiency, 

PWHOLE _ INCR = incremental wholesaler price for equipment with increased efficiency ($), 

MUWHOLE _ INCR = incremental wholesaler markup for equipment with increased 

efficiency, 

PCONT _ INCR = incremental contractor price for equipment with increased efficiency ($), 

MUCONT _ INCR = incremental contractor markup for equipment with increased 

efficiency, 

PEND _ INCR = incremental end-user price for baseline equipment ($), and 

MUTAX = sales tax markup. 

For replacement ballasts, the equations are the same as above, except that incremental 

OEM ( POEM _ INCR = (PMFR _ INCR × MUOEM _ INCR) ) is omitted, and the incremental wholesaler price 

is determined by applying the incremental wholesaler markup to the incremental manufacturer 

price for equipment with increased efficiency: 

PWHOLE _ INCR = (PMFR _ INCR × MUWHOLE _ INCR)	 Eq. 7.11 

7.1.3	 Overall Markups 

Overall markups, including both overall baseline and overall incremental markups, relate 

the manufacturer price to the final customer price ( PEND ) as indicated by the following equation 

PEND = (PEND _ BASE + PEND _ INCR) Eq. 7.12 

7.2	 ESTIMATION OF OEM, WHOLESALER, CONTRACTOR AND SALES TAX 

MARKUPS 

7.2.1	 Financial Information Sources 

Publicly owned companies are required by law to disclose financial information on a 

regular basis by filing different forms with the U.S. Securities and Exchange Commission (SEC). 

Filed annually, the SEC form 10-K provides a comprehensive overview of the company’s 

business and financial conditions. Relevant information in the 10-K reports includes the 

company’s revenues and direct and indirect costs. For the OEM and wholesaler markups, DOE 

used 10-K reports from publicly owned lighting fixture manufacturers and electrical wholesalers, 

respectively. The financial figures necessary for calculating the company markup are net sales, 

costs of sales, and gross profit. The income statement section of the 10-K reports often lists these 

figures. DOE used averages of the financial figures spanning 2002 to 2008 to calculate the 

markups. 

7-4 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

 

 

 

 

 

 

DOE used the following equations to calculate the gross profit and gross profit margins: 

Gross Profit ($) = Net Sales – Cost of Sales Eq. 7.13 

Gross Profit 

Gross Profit Margin = Eq. 7.14 Net Sales 

To calculate the time-average gross profit margin for each company, DOE first summed 

the gross profit for all the years and then divided the result by the sum of the net sales for the 

same years. DOE then used the gross profit margins to calculate baseline markups on existing 

equipment (i.e., prior to efficiency changes resulting from enactment of proposed efficiency 

standards). Each company’s baseline markup was calculated as: 

1 Net Sales Baseline Markup = = Eq. 7.15 (1− Gross Profit Margin) Cost of Sales 

Table 7.2.1 and Table 7.2.2 contain the calculated gross profit margins for a sample of 

fixture OEMs and electrical wholesalers, respectively. 

Table 7.2.1 Gross Profit Margins for Fixture OEMs* 

Company Financial 

Figure 

$ 

Year 

2008 2007 2006 2005 2004 2003 2002 

A Net Sales 2,026,644 1,964,781 1,841,039 2,172,854 2,104,167 2,049,308 1,972,796 

Cost of Sales 1,210,849 1,220,466 1,188,202 1,324,311 1,253,380 1,235,900 1,169,282 

Gross Profit 815,795 744,315 652,837 848,543 850,787 813,408 803,514 

Gross Profit 

Margin (%) 

40.3 37.9 35.5 39.1 40.4 39.7 40.7 

Average Gross Profit Margin: 39.1% 

B Net Sales 6,521,300 5,903,100 5,184,600 4,730,400 4,462,900 4,061,400 3,960,500 

Cost of Sales 4,396,700 3,970,000 3,521,500 3,243,800 3,119,700 2,871,900 2,830,900 

Gross Profit 2,124,600 1,933,100 1,663,100 1,486,600 1,343,200 1,189,500 1,129,600 

Gross Profit 

Margin (%) 

32.6 32.7 32.1 31.4 30.1 29.3 28.5 

Average Gross Profit Margin: 31.0% 

C** Net Sales 1,484,833 1,252,194 1,179,069 1,033,899 970,304 

Cost of Sales 896,027 785,973 760,938 671,322 630,433 

Gross Profit 588,806 466,221 418,131 362,577 339,871 

Gross Profit 

Margin (%) 

39.7 37.2 35.5 35.1 35.0 

Average Gross Profit Margin: 36.5% 

D Net Sales 2,704,400 2,533,900 2,414,300 2,104,900 1,993,000 1,770,700 1,587,800 

Cost of Sales 1,901,000 1,798,100 1,757,500 1,509,900 1,431,100 1,289,200 1,178,700 

Gross Profit 803,400 735,800 656,800 595,000 561,900 481,500 409,100 

Gross Profit 

Margin (%) 

29.7 29.0 27.2 28.3 28.2 27.2 25.8 

Average Gross Profit Margin: 27.9% *

 Unless noted, all numbers are in thousands of dollars. This table includes 2002, 2003, 2004, 2005, 2006, 2007, 

and 2008 SEC 10-K reports.

** Data are not available for missing years.
 

7-5 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

 

 

 

Table 7.2.2 Gross Profit Margins for Electrical Wholesalers* 

Company Financial 

Figure 

$ 

Year 

2008 2007 2006 2005 2004 2003 2002 

A Net Sales 5,400,154 5,258,301 5,009,143 4,288,043 4,079,553 3,802,452 3,974,892 

Cost of Sales 4,354,935 4,225,983 4,047,692 3,477,009 3,295,772 3,067,986 3,229,791 

Gross Profit 1,045,219 1,032,318 961,451 811,034 783,781 734,466 745,101 

Gross Profit 

Margin (%) 

19.4 19.6 19.2 18.9 19.2 19.3 18.7 

Average Gross Profit Margin: 19.2% 

B Net Sales 6,110,840 6,003,452 5,320,603 4,421,103 3,741,253 3,286,766 3,325,780 

Cost of Sales 4,904,164 4,781,336 4,234,079 3,580,398 3,029,132 2,676,701 2,735,006 

Gross Profit 1,206,676 1,222,116 1,086,524 840,705 712,121 610,065 590,774 

Gross Profit 

Margin (%) 

19.7 20.4 20.4 19.0 19.0 18.6 17.8 

Average Gross Profit Margin: 19.3% 

C Net Sales 6,850,032 6,418,014 5,883,654 5,526,636 5,049,785 4,667,014 4,643,898 

Cost of Sales 4,041,810 3,814,391 3,529,504 3,365,095 3,143,133 2,975,513 2,984,548 

Gross Profit 2,808,222 2,603,623 2,354,150 2,161,541 1,906,652 1,691,501 1,659,350 

Gross Profit 

Margin (%) 

41.0 40.6 40.0 39.1 37.8 36.2 35.7 

Average Gross Profit Margin: 38.6% 

D** Net Sales 90,837,000 81,511,000 73,094,000 64,816,000 58,247,000 53,553,000 

Cost of Sales 61,054,000 54,191,000 48,664,000 44,236,000 40,139,000 37,406,000 

Gross Profit 29,783,000 27,320,000 24,430,000 20,580,000 18,108,000 16,147,000 

Gross Profit 

Margin (%) 

32.8 33.5 33.4 31.8 31.1 30.2 

Average Gross Profit Margin: 32.1% *

 Unless noted, all numbers are in thousands of dollars. This table includes 2002, 2003, 2004, 2005, 2006, 2007, 

and 2008 SEC 10-K reports.

** Data are not available for missing years.
 

The baseline markup covers non-production costs and profit. Table 7.2.3 and Table 7.2.4 

show the baseline markups using this method for OEMs and electrical wholesalers, respectively. 

Table 7.2.3 Calculated OEM Baseline Markups for Fluorescent Lamp Ballasts 

Company Baseline Markup 

OEM – A 1.64 

OEM – B 1.45 

OEM – C 1.57 

OEM – D 1.39 

Average 1.51 

Table 7.2.4 Calculated Electrical Wholesaler Baseline Markups for Fluorescent Lamp 

Ballasts 

Company Baseline Markup 

Wholesaler A 1.24 

Wholesaler B 1.24 

Wholesaler C 1.63 

Wholesaler D 1.47 

Average 1.39 

7-6 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

The incremental markup applied to higher-efficiency equipment is lower than the 

baseline markup because DOE assumes that expenses like labor and occupancy costs remain 

fixed and need not be recovered in the markup. Profits and other operating costs are assumed to 

be variable and to scale with the MSP. 

The surveyed SEC 10-K reports did not typically separate labor and occupancy costs 

from overall expenses, so DOE assumes that these fixed costs are encompassed by “Selling, 

Distribution, and Administrative Expenses” (the most common terminology observed in the 

surveyed reports). DOE assumes that “Operating Profit” (operating income) covers other 

operating costs and profit (i.e., variable costs). Each company’s incremental markup was 

calculated as: 

⎛

⎜

⎝

Operating Profit ⎞

⎟

⎠ Incremental Markup =1+ Eq. 7.16 Cost of Sales 

Table 7.2.5 and Table 7.2.6 contain the calculated incremental markups for the sampled 

fixture OEMs and electrical wholesalers, respectively. 

Table 7.2.5 Calculated OEM Incremental Markups for Fluorescent Lamp Ballasts* 

Company Financial 

Figure 

$ 

Year 

2008 2007 2006 2005 2004 2003 2002 

A Cost of Sales 1,210,849 1,220,466 1,188,202 1,324,311 1,253,380 1,235,900 1,169,282 

Operating Profit 261,060 222,423 152,119 106,745 137,927 110,276 120,127 

Calculated 

Incremental 

Markup 

1.22 1.18 1.13 1.08 1.11 1.09 1.10 

Average Incremental Markup: 1.13 

B Cost of Sales 4,396,700 3,970,000 3,521,500 3,243,800 3,119,700 2,871,900 2,830,900 

Operating Profit 877,600 844,100 694,100 559,800 496,600 392,000 354,700 

Calculated 

Incremental 

Markup 

1.20 1.21 1.20 1.17 1.16 1.14 1.13 

Average Incremental Markup: 1.17 

C** Cost of Sales 896,027 785,973 760,938 671,322 630,433 

Operating Profit 208,334 149,342 149,342 108,252 96,418 

Calculated 

Incremental 

Markup

 1.23 1.19 1.20 1.16 1.15 

Average Incremental Markup: 1.19 

D Cost of Sales 1,901,000 1,798,100 1,757,500 1,509,900 1,431,100 1,289,200 1,178,700 

Operating Profit 346,000 299,400 233,900 226,800 212,600 171,900 138,500 

Calculated 

Incremental 

Markup 

1.18 1.17 1.13 1.15 1.15 1.13 1.12 

Average Incremental Markup: 1.15 

ALL Average Incremental Markup (All OEMs): 1.16 *

 Except for calculated incremental markup, all numbers are in thousands of dollars. This table includes 2002, 2003, 

2004, 2005, 2006, 2007, and 2008 SEC 10-K reports.

** Data are not available for missing years.
 

7-7 

EERE-2007-BT-STD-0016 COMMENT 25
 

Table 7.2.6 Calculated Electrical Wholesaler Incremental Markups for Fluorescent Lamp 

Ballasts* 

Company Financial 

Figure 

$ 

Year 

2008 2007 2006 2005 2004 2003 2002 

A Cost of Sales 4,354,935 4,225,983 4,047,692 3,477,009 3,295,772 3,067,986 3,229,791 

Operating Profit 151,863 161,787 122,022 64,789 41,844 30,895 42,153 

Calculated 

Incremental 

Markup 

1.03 1.04 1.03 1.02 1.01 1.01 1.01 

Average Incremental Markup: 1.02 

B Cost of Sales 4,904,164 4,781,336 4,234,079 3,580,398 3,029,132 2,676,701 2,735,006 

Operating Profit 345,667 394,224 364,983 209,286 149,446 86,045 76,625 

Calculated 

Incremental 

Markup 

1.07 1.08 1.09 1.06 1.05 1.03 1.03 

Average Incremental Markup: 1.06 

C Cost of Sales 4,041,810 3,814,391 3,529,504 3,365,095 3,143,133 2,975,513 2,984,548 

Operating Profit 782,672 670,653 578,071 518,989 439,530 387,261 393,155 

Calculated 

Incremental 

Markup 

1.19 1.18 1.16 1.15 1.14 1.13 1.13 

Average Incremental Markup: 1.16 

D** Cost of Sales 61,054,000 54,191,000 48,664,000 44,236,000 40,139,000 37,406,000 

Operating Profit 9,673,000 9,363,000 7,926,000 6,846,000 5,830,000 4,932,000 

Calculated 

Incremental 

Markup

 1.16 1.17 1.16 1.15 1.15 1.13 

Average Incremental Markup: 1.15 

ALL Average Incremental Markup (All Wholesalers): 1.10 *

 Except for calculated incremental markup, all numbers are in thousands of dollars. This table includes 2002, 2003, 

2004, 2005, 2006, 2007, and 2008 SEC 10-K reports.

** Data are not available for missing years.
 

7.2.2 Weighted Markups 

DOE adjusted the calculated average baseline and incremental markups to reflect 

estimated proportions of ballasts sold through the OEM and wholesaler distribution channels. 

DOE used information from the 2000 Ballast Rule, which estimates that ballasts sold to OEM 

fixture manufacturers represent 63 percent of the market while ballasts sold to electrical 

wholesalers represent 37 percent of the market. DOE then multiplied by a contractor markup of 

1.13 (obtained from the 2000 Ballast Rule) to the resulting weighted average baseline and 

incremental markups to develop total weighted markups. The weighted total baseline and 

incremental markups are provided in Table 7.2.7. 

7-8 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 7.2.7 Weighted Total Baseline and Incremental Markups for Fluorescent Lamp 

Ballasts 

Markup Type Weighted Total 

Baseline 2.08 

Incremental 1.37 

7.2.3 Sales Tax 

The sales tax represents State and local sales taxes applied to and is a multiplicative 

factor that increases the end-user cost. DOE obtained information on State and local sales tax 

from the Sales Tax Clearinghouse (Table 7.2.8).2 These data represent weighted averages that 

include county and city rates. DOE then calculated population-weighted average tax values for 

each census division and four large States. These values allowed DOE to correlate the sales tax 

distribution with the electricity price distribution (chapter 8) and the operating hour distribution 

(chapter 6) that DOE uses in the LCC spreadsheet. DOE also calculated a national populationweighted average sales tax for use as a single-value input to the LCC, should users want singleaverage results. DOE also used this result in the NIA, where DOE did not use a distribution of 

inputs.3 

Table 7.2.8 State and Local Sales Tax Rates 

State Combined State 

and Local Tax Rate 

% 

State Combined State 

and Local Tax Rate 

% 

State Combined State 

and Local Tax Rate 

% 

Alabama 8.15 Kentucky 6.00 North Dakota 5.75 

Alaska 1.50 Louisiana 8.75 Ohio 6.85 

Arizona 7.15 Maine 5.00 Oklahoma 8.10 

Arkansas 8.25 Maryland 6.00 Oregon 0.00 

California 9.00 Massachusetts 5.00 Pennsylvania 6.25 

Colorado 6.40 Michigan 6.00 Rhode Island 7.00 

Connecticut 6.00 Minnesota 6.85 South Carolina 7.05 

Delaware 0.00 Mississippi 7.00 South Dakota 5.45 

D.C. 5.75 Missouri 7.10 Tennessee 9.40 

Florida 6.70 Montana 0.00 Texas 8.05 

Georgia 6.90 Nebraska 6.00 Utah 6.70 

Hawaii 4.40 Nevada 7.50 Vermont 6.05 

Idaho 6.05 New Hampshire 0.00 Virginia 5.00 

Illinois 8.40 New Jersey 6.95 Washington 8.75 

Indiana 7.00 New Mexico 6.40 West Virginia 6.00 

Iowa 6.80 New York 8.25 Wisconsin 5.40 

Kansas 6.95 North Carolina 6.80 Wyoming 5.40 

Table 7.2.9 shows the distribution of sales tax rates that DOE developed for the LCC and 

PBP analyses. The distribution ranges from a minimum of 4.98 percent in New England to a 

maximum of 9.00 percent in California with a weighted average value of 7.12 percent 

nationwide. 

7-9 

EERE-2007-BT-STD-0016 COMMENT 25
 

 

 

 

 

 

 

 

Table 7.2.9 Regional Average Tax Rates 

Region or 

Large State 

Weighted 

Sales Tax 

% 

New England 4.98 

Mid Atlantic 6.54 

East North Central 6.94 

West North Central 6.76 

South Atlantic 6.19 

East South Central 7.89 

West South Central 8.40 

Mountain 6.46 

Pacific 5.20 

New York 8.25 

California 9.00 

Texas 8.05 

Florida 6.70 

U.S. Average 7.12 

7-10 

EERE-2007-BT-STD-0016 COMMENT 25
REFERENCES 

1. U.S. Department of Energy–Office of Energy Efficiency and Renewable Energy. Energy 

Conservation Program for Consumer Products: Technical Support Document: Energy 

Efficiency Standards for Consumer Products; Fluorescent Lamp Ballast Proposed Rule. 

January 2000. (Last accessed June 30, 2009.) 

<http://www.eere.energy.gov/buildings/appliance_standards/residential/pdfs/chap3.pdf> 

2. The Sales Tax Clearinghouse. State Aggregate Tax Rates. 2009. (Last accessed June 30, 

2009.) <http://thestc.com/STrates.stm> 

3. U.S. Census Bureau. Population Estimates Change: April 1, 2000 to July 1, 2008. 2008. (Last 

accessed June 30, 2009.) <http://www.census.gov/popest/states/tables/NST-EST2008-

02.csv> 

7-11 

EERE-2007-BT-STD-0016 COMMENT 25