Sales Tax Calculator

How Sales Tax Works in the United States

Sales tax is a consumption tax imposed by state and local governments on the sale of goods and certain services. Unlike income tax, which is based on earnings, sales tax is paid by the consumer at the point of purchase. The seller collects the tax and remits it to the appropriate taxing authority. There is no federal sales tax in the United States — each state sets its own rate, and local jurisdictions (counties, cities, transit districts) may add their own on top.

Sales tax is calculated as a percentage of the purchase price. If you buy a $200 item with an 8% sales tax rate, you pay $16 in tax for a total of $216. The tax is typically calculated on the pre-tip, pre-discount price. Our calculator above handles both forward calculation (price to total) and reverse calculation (total back to pre-tax price).

State and Local Combined Rates

The total sales tax rate you pay at checkout is the sum of the state base rate and any local taxes. This combined rate varies not just by state but by the specific city or county where you make your purchase. The average combined state and local rate in the United States is approximately 6.6%, but individual locations range from 0% to over 11%.

For example, California has a state base rate of 7.25%, but with local additions, the combined rate in Los Angeles is 9.5% and in some smaller jurisdictions can reach 10.75%. Tennessee has a 7% state rate but the combined rate in Nashville is 9.25%. This is why entering your specific local rate in the calculator gives the most accurate result.

The 5 States With No Sales Tax

Five states impose no state-level sales tax at all. Residents and shoppers in these states pay zero sales tax on most purchases, which can represent significant savings — especially on large purchases like electronics, furniture, and vehicles.

Note that Alaska is unique: while there is no state-level sales tax, many local jurisdictions (boroughs and cities) levy their own sales taxes, with rates as high as 7.5% in some areas. Delaware, New Hampshire, Montana, and Oregon have no sales tax at any level (with minor exceptions for hospitality and resort areas).

Sales Tax Rates by State

The following table shows state base rates and average combined (state + local) rates for the most populous states. Local rates can vary significantly within each state.

Taxable vs. Exempt Items

Not everything you buy is subject to sales tax. Most states exempt certain categories of goods and services from sales tax. The specific exemptions vary by state, but common patterns include:

• Groceries (unprepared food): Exempt in most states, though some (like Mississippi, Alabama, and South Dakota) tax groceries at reduced or full rates.
• Prescription medications: Exempt in all states. Over-the-counter drugs are taxed in most states except a handful.
• Clothing: Exempt in a few states (New York, New Jersey, Pennsylvania, Minnesota, and Vermont), typically with a per-item price cap (e.g., exempt under $110 in New York).
• Prepared food and restaurant meals: Taxable in most states, sometimes at higher rates than the standard sales tax.
• Digital goods: Treatment varies widely. Some states tax streaming services, digital downloads, and SaaS products; others do not.
• Professional services: Generally exempt (legal, medical, accounting), though some states are beginning to tax certain services.

Sales Tax Holidays

Sales tax holidays are temporary periods — usually lasting one to three days — during which certain items can be purchased tax-free. These holidays are authorized by state legislatures and typically occur in late summer (back-to-school season) or before hurricane season (for emergency supplies).

Common sales tax holiday categories include school supplies (pens, notebooks, backpacks), clothing under a certain price ($100 is typical), computers and technology, and emergency preparedness supplies (generators, batteries, first aid kits). States that regularly offer sales tax holidays include Texas, Florida, Ohio, New York, Virginia, Maryland, and more than a dozen others.

Sales tax holidays can provide meaningful savings on large purchases. A $1,000 laptop bought during a Texas tax-free weekend saves $82.50 in combined sales tax. Timing major purchases to coincide with these holidays is a simple but effective strategy.

Use Tax: What You Owe on Out-of-State Purchases

Use tax is the counterpart to sales tax. It applies when you purchase a taxable item from an out-of-state seller who does not collect your state's sales tax. The use tax rate is always the same as your state and local sales tax rate. Technically, consumers are required to self-report and pay use tax on their state income tax returns.

In practice, use tax is most significant for large purchases. If you buy a $30,000 car in Oregon (no sales tax) and register it in Washington (6.5%+ sales tax), Washington will require you to pay use tax of approximately $2,000+ before registering the vehicle. For smaller purchases, compliance has historically been low — but the 2018 Supreme Court ruling in South Dakota v. Wayfair has largely addressed this for online retailers.

Nexus Rules for Online Sellers

The landmark South Dakota v. Wayfair, Inc. (2018) Supreme Court decision allowed states to require online sellers to collect sales tax even if the seller has no physical presence in the state. This concept is known as economic nexus. Most states now require remote sellers to collect and remit sales tax once they exceed a threshold of sales in the state — typically $100,000 in annual sales or 200 transactions.

Before Wayfair, a seller needed physical nexus — a physical presence such as a store, warehouse, office, or employee — to be required to collect sales tax. Now, both physical and economic nexus can trigger the obligation. If you sell products online, you may need to collect sales tax in dozens of states.

Marketplace facilitators (Amazon, eBay, Etsy, Walmart Marketplace) are now required to collect and remit sales tax on behalf of third-party sellers in most states, which simplifies compliance for smaller sellers using these platforms. However, if you sell through your own website, you are responsible for tracking nexus thresholds, collecting tax, and filing returns in each state.

Sales Tax vs. Value-Added Tax (VAT)

The United States is one of the few developed nations that uses a retail sales tax instead of a value-added tax (VAT). While both are consumption taxes, they work differently. A sales tax is collected only at the final point of sale to the consumer. A VAT is collected at every stage of production, with businesses receiving credits for VAT paid on their inputs.

VAT systems (common in Europe, at rates of 15% to 27%) tend to generate more revenue and have less evasion because the tax is collected at each link in the supply chain. Sales tax systems are simpler to administer but create incentives for businesses to claim exempt status and for consumers to shop across borders. Understanding this distinction is useful if you do business internationally or compare cost of living across countries.

Worked Example: Calculating Sales Tax on a $500 Purchase

Suppose you purchase a $500 television in Chicago, Illinois. The combined sales tax rate in Chicago is 10.25% (6.25% state + 1.75% city + 1% county + 1.25% Regional Transportation Authority):

If you purchased the same television across the border in Delaware (0% tax) or during an Illinois tax-free holiday (if electronics qualify), you would save the full $51.25. For larger purchases like vehicles or appliances, the savings from shopping in a lower-tax jurisdiction can be hundreds of dollars — though use tax may still apply when you bring the item home.

Tips for Managing Sales Tax

• Time major purchases: If your state offers sales tax holidays, plan big purchases (laptops, school supplies, hurricane prep) to coincide with tax-free periods.
• Compare cross-border rates: If you live near a state line, check whether the neighboring state or city has a lower combined rate.
• Track your sales tax for deductions: If you itemize on your federal return, you can deduct either state income tax or state sales tax (not both) under the SALT deduction. Use the IRS sales tax tables or keep receipts. This is especially valuable in no-income-tax states like Texas, Washington, and Florida. See our income tax calculator for the full picture.
• Understand exemption certificates: Businesses can purchase items for resale without paying sales tax by presenting a valid resale certificate. This prevents double taxation in the supply chain.

Related Tax Calculators

Sales tax is one piece of your total tax picture. Use these related tools to understand your complete tax burden:

• Income Tax Calculator — Estimate your federal income tax. In no-income-tax states, sales tax is your primary state tax and may be deductible on your federal return.
• Property Tax Calculator — Estimate your annual property tax. Combined with sales and income tax, this gives you a complete state-level tax picture.
• Tax Bracket Calculator — Understand your marginal federal rate and how choosing the sales tax deduction vs. income tax deduction affects your bracket.
• Tip Calculator — Calculate tips on restaurant bills. In most states, sales tax is charged on the food total before tip is added.