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How US Sales Tax Works
Unlike VAT systems used in the UK, EU, and India — where a single national rate applies to most goods — the United States has no federal sales tax. Instead, each of the 50 states has the authority to set its own sales tax rate, and many states allow counties and cities to add their own local rates on top.
This creates a system where the actual tax rate you pay depends on the exact location of the purchase — not just the state, but sometimes the county, city, and even special district within a city. A shopper in Chicago pays 10.25% while someone in Springfield, Illinois pays 8.5% — both in the same state.
The United States uses a destination-based sales tax system for most transactions. This means the rate is determined by where the buyer receives the goods — not where the seller is located. For e-commerce, the applicable rate is based on the delivery address.
Key fact: There is no federal sales tax in the US. Every sales tax you pay goes to state and local governments — not the federal government, which collects revenue through income tax and payroll tax instead.
State rate vs. combined rate — what's the difference?
Every sales tax discussion involves two numbers: the state rate and the combined rate. The state rate is the percentage set by the state legislature. The combined rate adds county and city taxes on top. For example:
- Colorado state rate: 2.9% — one of the lowest in the country
- Denver combined rate: 8.81% — because city and district taxes add 5.91%
- New York state rate: 4.0%
- New York City combined rate: 8.875% — adding 4.5% city + 0.375% MCTD
When calculating the actual tax on a purchase, always use the combined ratefor the specific location where you're buying or shipping to.
States With No Sales Tax (2026)
Five US states have no statewide sales tax. These are popular shopping destinations for residents of neighbouring high-tax states — particularly for large purchases like electronics, vehicles, and appliances.
| State | State Rate | Notes |
|---|---|---|
| Oregon | 0% | No state or local sales tax — zero everywhere |
| Montana | 0% | No state or local sales tax — zero everywhere |
| New Hampshire | 0% | No state or local sales tax — also no income tax |
| Delaware | 0% | Famous tax-free shopping destination near Philadelphia and NJ |
| Alaska | 0% | No state tax — but some municipalities levy local taxes (e.g. Juneau 5%) |
Oregon and Montana are particularly popular for border shopping because they have no exceptions — neither state nor local taxes exist. Delaware near Philadelphia draws shoppers from Pennsylvania (6%), Maryland (6%), and New Jersey (6.625%) because of its zero-tax status on all goods including clothing.
Highest Sales Tax States — 2026
These states combine high state rates with aggressive local tax additions, producing some of the highest consumer tax burdens in the country.
| Rank | State | State Rate | Avg Combined |
|---|---|---|---|
| 1 | Louisiana | 4.45% | 9.56% |
| 2 | Tennessee | 7.0% | 9.55% |
| 3 | Arkansas | 6.5% | 9.47% |
| 4 | Washington | 6.5% | 9.38% |
| 5 | Alabama | 4.0% | 9.24% |
| 6 | Oklahoma | 4.5% | 8.98% |
| 7 | Illinois | 6.25% | 8.74% |
| 8 | California | 7.25% | 8.72% |
Note that Louisiana tops the list not because of a high state rate (4.45%) but because parishes (the Louisiana equivalent of counties) add heavily on top — often 4–6% more. The same pattern applies in Tennessee, where the 7% state rate plus local additions pushes most cities to 9.25–9.75%.
Lowest Sales Tax States (Excluding Zero-Tax States)
Among states that do have a sales tax, these have the lowest average combined rates — a meaningful advantage for large purchases.
| State | State Rate | Avg Combined | Notes |
|---|---|---|---|
| Hawaii | 4.0% | 4.44% | Uses General Excise Tax (GET), not a traditional sales tax |
| Wisconsin | 5.0% | 5.70% | Uniform 0.5% county addition statewide |
| Wyoming | 4.0% | 5.44% | Low local additions; no state income tax |
| Maine | 5.5% | 5.50% | No local additions; clothing and food exempt |
| Virginia | 5.3% | 5.63% | Flat 6% combined rate most areas; reduced grocery rate |
| South Dakota | 4.2% | 6.40% | Rate reduced from 4.5% in 2023 |
Grocery Tax Exemptions by State
Unprepared food (groceries) is one of the most politically debated areas of sales tax. Most states exempt it entirely, but a handful still tax food — which disproportionately affects lower-income households.
✓ States that EXEMPT groceries
California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, Michigan, Georgia, Virginia, Indiana, Wisconsin, Maryland, Massachusetts, Kentucky, Vermont, Maine, New Hampshire, Oregon, Montana, Delaware, New Jersey, and most others.
✗ States that STILL TAX groceries (2026)
- Mississippi — 5% state rate on food
- Alabama — reduced 3% state grocery rate
- South Dakota — 4.2% on food (no exemption)
- Hawaii — broad GET applies to food
- Idaho — 6% on groceries (with income tax credit)
- Oklahoma — full combined rate on food
Some states have partial exemptions or reduced rates for food: Tennessee taxes groceries at 4% state rate instead of 7%; North Carolina charges 2% state rate on food; Utah uses a reduced grocery rate. Restaurant meals and prepared food are taxable at full rates in virtually every state.
Complete Sales Tax Rate Table — All 50 States (2026)
Rates below show the state base rate and the statewide average combined rate (including typical county and city additions). Actual rates vary by exact location — use our sales tax calculator for city-level precision.
| State | Abbr | State Rate | Avg Combined |
|---|---|---|---|
| Alabama | AL | 4% | 9.24% |
| ✦Alaska | AK | 0% | 0% |
| Arizona | AZ | 5.6% | 8.37% |
| Arkansas | AR | 6.5% | 9.47% |
| California | CA | 7.25% | 8.72% |
| Colorado | CO | 2.9% | 7.81% |
| Connecticut | CT | 6.35% | 6.35% |
| ✦Delaware | DE | 0% | 0% |
| Florida | FL | 6% | 7.01% |
| Georgia | GA | 4% | 7.34% |
| Hawaii | HI | 4% | 4.44% |
| Idaho | ID | 6% | 6.02% |
| Illinois | IL | 6.25% | 8.74% |
| Indiana | IN | 7% | 7% |
| Iowa | IA | 6% | 6.94% |
| Kansas | KS | 6.5% | 8.68% |
| Kentucky | KY | 6% | 6% |
| Louisiana | LA | 4.45% | 9.56% |
| Maine | ME | 5.5% | 5.5% |
| Maryland | MD | 6% | 6% |
| Massachusetts | MA | 6.25% | 6.25% |
| Michigan | MI | 6% | 6% |
| Minnesota | MN | 6.875% | 7.49% |
| Mississippi | MS | 7% | 7.07% |
| Missouri | MO | 4.225% | 8.29% |
| ✦Montana | MT | 0% | 0% |
| Nebraska | NE | 5.5% | 6.97% |
| Nevada | NV | 4.6% | 8.23% |
| ✦New Hampshire | NH | 0% | 0% |
| New Jersey | NJ | 6.625% | 6.6% |
| New Mexico | NM | 4.875% | 7.62% |
| New York | NY | 4% | 8.52% |
| North Carolina | NC | 4.75% | 6.99% |
| North Dakota | ND | 5% | 6.96% |
| Ohio | OH | 5.75% | 7.22% |
| Oklahoma | OK | 4.5% | 8.98% |
| ✦Oregon | OR | 0% | 0% |
| Pennsylvania | PA | 6% | 6.34% |
| Rhode Island | RI | 7% | 7% |
| South Carolina | SC | 6% | 7.42% |
| South Dakota | SD | 4.2% | 6.4% |
| Tennessee | TN | 7% | 9.55% |
| Texas | TX | 6.25% | 8.2% |
| Utah | UT | 6.1% | 7.19% |
| Vermont | VT | 6% | 6.24% |
| Virginia | VA | 5.3% | 5.63% |
| Washington | WA | 6.5% | 9.38% |
| West Virginia | WV | 6% | 6.55% |
| Wisconsin | WI | 5% | 5.7% |
| Wyoming | WY | 4% | 5.44% |
✦ No statewide sales tax · Avg combined rates include typical local additions · Source: State Depts. of Revenue, January 2026
How to Use the Sales Tax Calculator
Our free US sales tax calculator covers all 50 states with city-level rates for major metros. Here's how to get the most accurate result:
- Select your state — the state base rate and average combined rate fill in automatically.
- Select your city (optional) — for top cities (Los Angeles, New York City, Chicago, Seattle etc.), choose the city to use the exact combined rate instead of the state average.
- Enter your amount — type the pre-tax price. Results appear instantly.
- Use reverse mode if you only know the total — toggle to "Remove Tax" and enter the tax-inclusive amount to find the pre-tax price.
- Add shipping — if your state taxes shipping (Texas, Illinois, others), check the shipping toggle and enter the shipping charge to include it in the taxable base.
For businesses selling into multiple states, always verify rates using your state's official Department of Revenue website or a certified tax engine — especially for ZIP-code-level accuracy in states like California, Texas, and Colorado where rates vary significantly within cities.
Calculate sales tax for any US state
All 50 states · City-level rates · Instant results · Free
Open Sales Tax Calculator →Frequently Asked Questions
Which state has the highest sales tax in 2026?
Louisiana has the highest average combined sales tax rate at approximately 9.56%, followed by Tennessee at 9.55% and Arkansas at 9.47%. However, California has the highest state base rate at 7.25%. Individual cities can exceed 10% — Chicago (10.25%), Seattle (10.55%), and St. Louis (10.35%) are among the highest.
Which states have no sales tax?
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Alaska allows local municipalities to add their own taxes, so some Alaskan cities do charge sales tax. Delaware, Montana, New Hampshire, and Oregon have zero sales tax at every level.
How do I calculate sales tax on a purchase?
Multiply the pre-tax price by the tax rate as a decimal. Example: $500 item in New York City (8.875%) = $500 × 0.08875 = $44.38 tax, total $544.38. To reverse (find pre-tax from total): divide by (1 + rate). Example: $544.38 ÷ 1.08875 = $500 pre-tax.
Are groceries exempt from sales tax?
Most states exempt unprepared groceries. States that fully exempt food include California, Texas, New York, Florida, Pennsylvania, Ohio, Michigan, Illinois, and most others. States that still tax groceries include Mississippi (5%), Alabama (3% state rate), and South Dakota (4.2%). Always check your specific state.
What is the difference between state rate and combined rate?
The state rate is set by the state government. The combined rate adds county and city (local) taxes on top. For example, Colorado's state rate is just 2.9%, but Denver adds so many local taxes that the combined rate reaches 8.81%. Always use the combined rate when calculating actual purchase prices.