Common US State Sales Tax Rates

Sales tax rates vary across the United States. Use this reference table to look up your state’s standard rate before calculating.

Rates shown are approximate averages. Always verify with your state and local tax authority.

How to Calculate Sales Tax

Calculating sales tax requires just two pieces of information: the price before tax and the applicable tax rate. Once you have those, the math is straightforward.

Step-by-Step Formula

1. Write down the price before tax and the tax rate as a percentage.
2. Divide the tax rate by 100 to convert it to a decimal.
3. Multiply the price by the decimal tax rate to get the tax amount.
4. Add the tax amount to the original price to get the total after tax.

Worked Example

You are buying a jacket priced at $85.00 in a state with a 7.5% sales tax.

• Tax rate as decimal: 7.5 / 100 = 0.075
• Tax amount: $85.00 × 0.075 = $6.38
• Total after tax: $85.00 + $6.38 = $91.38

What Is Sales Tax?

Sales tax is a government-imposed tax on the sale of goods and services. Sales tax is collected by the seller at the point of purchase and then remitted to the relevant state or local authority. In the United States, the tax is governed at the state level, meaning each state sets its own base rate.

Currently, 45 states and the District of Columbia impose a statewide sales tax. The five states with no state sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska permits local jurisdictions to collect their own sales taxes.

Many states also allow cities and counties to add local sales taxes on top of the state rate. This is why your total sales tax rate may be higher than the listed state rate. For example, a city with a 2% local tax added to a 6% state rate results in an effective 8% combined rate.

Items That May Be Tax-Exempt

Some categories of goods are exempt from sales tax in certain states. Common exemptions include unprepared groceries, prescription medications, and some clothing items. Rules vary significantly by state, so always check local regulations for specific purchases.

Sales Tax on Vehicles and Auto Loans

Sales tax on vehicles works much the same way as on other purchases. Sales tax on a car is calculated based on the purchase price and is typically included in your financing if you take out an auto loan. The tax is paid upfront or rolled into the loan, depending on the dealership and your lender.

Non-profit organizations may qualify for sales tax exemptions, but individual buyers generally do not. Consult a tax professional for guidance specific to your state and purchase situation.

Why Does Sales Tax Vary So Much?

Sales tax rates differ because each state and municipality sets its own rates to fund local services. Sales tax revenue typically goes toward education, infrastructure, public safety, and health programs. States with no income tax, like Texas and Washington, often have higher sales tax rates to compensate for that missing revenue stream.

Frequently Asked Questions