Sales Tax Calculator

US Sales Tax: A Complete Guide

Sales tax in the United States is a consumption tax imposed by state and local governments on the sale of goods and certain services. Unlike a national VAT used in most countries, the US has a patchwork system where rates and rules vary significantly by jurisdiction.

How Sales Tax Works

When you buy a taxable item, the seller collects sales tax at the point of sale and remits it to the appropriate government. The total rate you pay is typically the sum of the state rate plus any applicable county, city, and special district rates. This means two stores in the same state but different cities can charge different total rates.

States Without Sales Tax

Five states impose no state-level sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska is unique — while it has no state tax, it allows local jurisdictions to levy their own sales taxes, with some areas charging up to 7.5%.

Highest and Lowest Tax States

At the state level, California has the highest rate at 7.25%, followed by Indiana, Mississippi, Rhode Island, and Tennessee at 7%. When combining state and average local rates, Louisiana tops the list at around 9.55%, while states like Hawaii and Wyoming have combined rates under 5.5%.

Common Exemptions

Most states exempt certain categories from sales tax:

• Groceries: Many states exempt unprepared food, though some (like Alabama and Mississippi) tax it at the full rate.
• Clothing: States like Pennsylvania, New Jersey, and New York exempt most clothing from sales tax.
• Prescription drugs: Nearly all states exempt prescription medications.
• Tax holidays: Many states offer annual sales tax holidays, often for back-to-school supplies.

Reverse Sales Tax Calculation

Sometimes you know the total amount paid and need to find the original pre-tax price. The formula is: Pre-Tax Price = Total ÷ (1 + Combined Tax Rate). Our calculator's reverse mode handles this automatically — just enter the total and select your state.