How Sales Tax Works
Sales tax is a consumption tax added at the point of purchase in the US. Unlike many countries, the US does not include sales tax in listed prices — it's added at checkout.
Sales Tax Formulas
- Tax Amount: Price × Tax Rate
- Total Price: Price × (1 + Tax Rate)
- Pre-tax Price from Total: Total ÷ (1 + Tax Rate)
- Tax Rate from Prices: (Total − Subtotal) ÷ Subtotal × 100
Example
$100 purchase at 8.25% combined rate:
- Tax: $100 × 0.0825 = $8.25
- Total: $108.25
- Reverse: $108.25 ÷ 1.0825 = $100 (original price)
- Find Rate: ($108.25 − $100) ÷ $100 × 100 = 8.25%
Sales Tax Rates by State (2026)
State-level sales tax rates and population-weighted average combined rates including local taxes (Tax Foundation, July 2025).
| State | State Tax | Avg Combined Rate |
|---|---|---|
| Alabama | 4% | 9.44% |
| Alaska | 0% | 1.82% |
| Arizona | 5.60% | 8.52% |
| Arkansas | 6.50% | 9.48% |
| California | 7.25% | 8.98% |
| Colorado | 2.90% | 7.86% |
| Connecticut | 6.35% | 6.35% |
| Delaware | 0% | 0% |
| District of Columbia | 6% | 6% |
| Florida | 6% | 7.02% |
| Georgia | 4% | 7.44% |
| Hawaii | 4% | 4.50% |
| Idaho | 6% | 6.03% |
| Illinois | 6.25% | 8.92% |
| Indiana | 7% | 7% |
| Iowa | 6% | 6.94% |
| Kansas | 6.50% | 8.78% |
| Kentucky | 6% | 6% |
| Louisiana | 5% | 10.11% |
| Maine | 5.50% | 5.50% |
| Maryland | 6% | 6% |
| Massachusetts | 6.25% | 6.25% |
| Michigan | 6% | 6% |
| Minnesota | 6.875% | 8.13% |
| Mississippi | 7% | 7.06% |
| Missouri | 4.225% | 8.41% |
| Montana | 0% | 0% |
| Nebraska | 5.50% | 6.98% |
| Nevada | 6.85% | 8.24% |
| New Hampshire | 0% | 0% |
| New Jersey | 6.625% | 6.60% |
| New Mexico | 4.875% | 7.67% |
| New York | 4% | 8.54% |
| North Carolina | 4.75% | 7% |
| North Dakota | 5% | 7.08% |
| Ohio | 5.75% | 7.30% |
| Oklahoma | 4.50% | 9.05% |
| Oregon | 0% | 0% |
| Pennsylvania | 6% | 6.34% |
| Puerto Rico | 10.50% | 11.50% |
| Rhode Island | 7% | 7% |
| South Carolina | 6% | 7.49% |
| South Dakota | 4.20% | 6.11% |
| Tennessee | 7% | 9.61% |
| Texas | 6.25% | 8.20% |
| Utah | 6.10% | 7.42% |
| Vermont | 6% | 6.39% |
| Virginia | 5.30% | 5.77% |
| Washington | 6.50% | 9.47% |
| West Virginia | 6% | 6.58% |
| Wisconsin | 5% | 5.72% |
| Wyoming | 4% | 5.56% |
State vs Local Taxes
Many cities and counties add their own tax on top of the state rate. For example, California has a 7.25% state rate, but combined local rates push some areas above 10%. Louisiana has the highest average combined rate at 10.11%. Always check the total combined rate for your specific location.
What's Taxable?
Tax rules vary by state, but general patterns:
- Usually taxed: Electronics, clothing (in most states), furniture, vehicles, prepared food
- Often exempt: Groceries (unprepared food) in most states, prescription medications, medical devices
- Varies by state: Clothing (exempt in PA, NJ, MN; taxed in most others), digital downloads, services
Tax-Free Shopping Periods
Many states hold annual sales tax holidays, typically before the school year, where certain items (school supplies, clothing, computers) can be purchased tax-free. Check your state's department of revenue for dates and qualifying items.