Sales Tax Calculator

How Does Sales Tax Work in the United States?

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 the Value Added Tax (VAT) used in most other countries, US sales tax is only collected at the final point of sale to the consumer. Each state sets its own base rate, and cities and counties can add additional local taxes on top.

States With No Sales Tax

Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local jurisdictions to impose their own sales taxes, so some purchases in Alaska may still be subject to local tax. This calculator lets you add optional local tax rates for these situations.

Understanding State vs. Local Sales Tax

The total sales tax you pay is typically the sum of the state rate and any applicable local rates. For example, in Los Angeles, California, you pay the 7.25% state rate plus local additions that bring the combined rate to around 9.5%. This calculator separates state and local taxes so you can see the full breakdown of your purchase.

Frequently Asked Questions

Which state has the highest sales tax?

California has the highest state-level sales tax rate at 7.25%. However, when combined with local taxes, Tennessee, Louisiana, and Arkansas often have the highest total rates, sometimes exceeding 10%.

Are groceries taxed?

It varies by state. Most states exempt unprepared food (groceries) from sales tax, but some states like Mississippi, Alabama, and South Dakota tax groceries at the full rate or a reduced rate. Always check your specific state and local rules.