Calculate sales tax on any purchase — or work backwards from a total to find the pre-tax price. Forward and reverse calculation for any rate.
The United States has no federal sales tax — it's entirely a state and local system, which makes it one of the most complex in the world. Forty-five states and Washington D.C. impose a statewide sales tax. Five states — Alaska, Delaware, Montana, New Hampshire, and Oregon — have no state sales tax, though Alaska allows local jurisdictions to impose their own. On top of state rates, counties and cities often add their own layers, so the total rate you pay depends on the exact location of the transaction.
California has the highest statewide rate at 7.25%, but local add-ons can push the combined rate to 10.75% or higher in some cities. Tennessee's combined average rate is among the highest nationally at around 9.5%. Louisiana, Arkansas, and Washington also have high combined rates. For major purchases, the sales tax variance between states and cities can amount to hundreds or thousands of dollars — worth considering for large transactions like vehicles or appliances.
Taxability varies significantly by state. Most states exempt groceries, prescription drugs, and medical equipment. Some states exempt clothing under a certain price threshold. Digital goods — software, streaming subscriptions, downloaded music — are taxed in some states and not others, and the rules are evolving. Services are largely untaxed in most states, though several states are moving toward taxing an expanding range of services as goods-based retail shrinks.
Following the 2018 Supreme Court decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax based on economic nexus — typically crossing a threshold of $100,000 in sales or 200 transactions in a state. This changed everything for e-commerce. If you sell online, you likely have sales tax obligations in multiple states even if you have no physical presence there.
Many states offer periodic sales tax holidays — usually a weekend in late summer focused on back-to-school shopping — where qualifying items are temporarily exempt from sales tax. Florida, Texas, and several southeastern states run the most prominent ones. Eligible items typically include clothing under $100, school supplies under $15, and sometimes computers or energy-efficient appliances. Planning major purchases around these windows can produce meaningful savings.
Use tax applies when you purchase taxable goods without paying sales tax — typically from an out-of-state seller who didn't collect it. Technically, consumers owe use tax to their home state on such purchases. Most individuals never pay it, but businesses are increasingly audited for use tax compliance, especially on significant capital equipment purchases made from vendors in other states.