Sales Tax by State: Complete Guide to US Tax Rates in 2026

If you've ever looked at a receipt and wondered why you paid $107.50 for a $100 item — or why your friend in another state paid exactly $100 for the same thing — you've already bumped into the weird, wonderful world of sales tax. Sales tax in the United States is not a single, uniform thing. It's a patchwork of state rates, local add-ons, special district taxes, and exemptions that can make your head spin.

Here's the thing: there is no federal sales tax. Every state gets to decide its own rules. And that means sales tax rates vary wildly depending on where you live, where you shop, and sometimes even what you're buying. A pair of shoes in Tennessee? That'll cost you more in tax than the same shoes in Delaware. Groceries in Illinois? Taxed differently than groceries in Pennsylvania.

In this guide, we'll break it all down. By the end, you'll understand how sales tax works, which states charge the most (and least), what items are typically exempt, and how to calculate sales tax yourself. Plus, we've got a free sales tax calculator that does the heavy lifting for you.

What Is Sales Tax and How Does It Work?

Sales tax is a consumption tax imposed by state and local governments on the sale of goods and certain services. When you buy something at a store or online, the seller collects the tax at the point of sale and then remits it to the appropriate government authority.

Here's how it works in practice:

1. You buy an item — let's say a $50 backpack in a state with a 6% sales tax rate.
2. The seller calculates the tax — $50 × 0.06 = $3.00.
3. You pay $53.00 total — $50 for the backpack, $3.00 in sales tax.
4. The seller sends the $3.00 to the state — they don't keep any of it (though they may get a small discount for collecting it on time).

Sounds simple enough, right? But here's where it gets complicated: most states allow local governments (counties, cities, special districts) to add their own sales tax on top of the state rate. So the actual rate you pay — called the combined rate — can be significantly higher than the state rate alone.

For example, Louisiana's state sales tax rate is 4.45%, but many parishes add local taxes that push the combined rate above 10%. In some areas of the state, you could pay as much as 11.45% in total sales tax.

And then there are the exemptions. Most states don't tax groceries at the full rate (or at all). Many states exempt prescription drugs. A few states exempt clothing under a certain price threshold. These exemptions vary from state to state, which is what makes sales tax so confusing — and why guides like this one exist.

The 5 States With No Sales Tax

Let's start with the good news. Five states don't charge a statewide sales tax at all:

1. Delaware (DE)

Delaware has no state or local sales tax. None. Zero. That's why outlet malls in Rehoboth Beach are packed with shoppers from Maryland, New Jersey, and Pennsylvania every weekend. Delaware makes up for the lost revenue through other taxes, including a relatively high gross receipts tax on businesses.

2. Montana (MT)

Montana has no statewide sales tax. There are a few special resort areas that charge a local sales tax (up to 3%), but for the vast majority of purchases, you pay zero. Montana has debated introducing a sales tax multiple times, but voters have consistently rejected it.

3. New Hampshire (NH)

The Granite State has no sales tax on most purchases. New Hampshire does, however, charge a 9% meals and rooms tax on restaurant meals, hotel stays, and short-term rentals. So while your groceries and clothing are tax-free, eating out will cost you.

4. Oregon (OR)

Oregon has no statewide sales tax, and local governments aren't allowed to levy their own sales taxes either. It's truly zero. Oregon compensates with a relatively high state income tax instead. If you're an Oregon resident shopping in person, you never pay sales tax. (Online purchases from Oregon sellers are also tax-free for Oregon residents.)

5. Alaska (AK)

Alaska is the trickiest one. There's no statewide sales tax, but Alaska allows local municipalities to levy their own sales taxes — and many of them do. Over 100 boroughs and cities in Alaska have local sales taxes, with rates ranging from 1% to 7.5%. So while Alaska doesn't have a state sales tax, you might still pay sales tax depending on where in Alaska you're shopping.

Important caveat: Even in states with no sales tax, you may still owe sales tax on online purchases from sellers in other states (more on that in the Wayfair section below). And if you're a business owner in a no-sales-tax state selling to customers in other states, you may still have nexus obligations.

The Highest Sales Tax States in 2026

Now for the states where your wallet really feels it. These states have the highest combined state and local sales tax rates in the country:

1. Louisiana — Combined Rate Up to 11.45%

Louisiana has a state rate of 4.45%, but local parish taxes can add up to 7%, pushing combined rates as high as 11.45%. The statewide average combined rate is around 9.55%. Louisiana is consistently the state with the highest average combined sales tax rate in the nation.

2. Tennessee — Combined Rate Up to 9.75%

Tennessee's state rate is 7.0%, which is the second-highest state rate in the country. Local taxes add up to 2.75%, making the maximum combined rate 9.75%. The average combined rate is around 9.56%. Notably, Tennessee does not tax groceries at the full rate — they're taxed at only 4% statewide.

3. Arkansas — Combined Rate Up to 11.25%

Arkansas has a state rate of 6.5%, but local taxes can push the combined rate as high as 11.25% in some areas. The average combined rate is around 9.46%. Arkansas is one of the few states that taxes groceries, though at a reduced rate of 1.5%.

4. Washington — Combined Rate Up to 10.5%

Washington state has a 6.5% state rate, but local taxes in cities like Seattle can push the combined rate to 10.5%. The average combined rate is around 9.39%. Washington is notable because it has no state income tax — it relies heavily on sales tax for revenue instead.

5. Alabama — Combined Rate Up to 11.0%

Alabama's state rate is 4.0%, but combined with local taxes that can reach 7%, some areas have combined rates as high as 11.0%. The average combined rate is around 9.30%. Like Arkansas, Alabama taxes groceries — but at a reduced rate that varies by locality.

Top 10 States by Average Combined Sales Tax Rate

Notice how the state rate alone doesn't tell the full story? California has the highest state rate at 7.25%, but relatively modest local rates mean it ranks 10th in combined rate. Meanwhile, Louisiana's state rate is only 4.45%, but massive local taxes push it to #1 overall.

Use our state-specific calculators to find exact rates: California sales tax calculator, Texas sales tax calculator, Florida sales tax calculator, New York sales tax calculator, Illinois sales tax calculator.

How Combined Sales Tax Rates Work

Understanding combined rates is crucial because the state rate you see advertised is almost never the rate you actually pay. Here's the breakdown:

Combined Rate = State Rate + County Rate + City Rate + Special District Rate

Let's say you live in Chicago, Illinois. Here's what your combined rate looks like:

• Illinois state rate: 6.25%
• Cook County rate: 1.75%
• City of Chicago rate: 1.25%
• Regional Transportation Authority (RTA): 1.00%
• Combined rate: 10.25%

That's a full 4 percentage points higher than the state rate alone. And it's why you need to look up the combined rate for your specific location, not just your state's rate.

Special district taxes fund things like public transportation, stadiums, cultural facilities, and other regional projects. They're added to the sales tax rate in specific geographic areas, and they can change from year to year as districts are created, expanded, or dissolved.

The good news is that you don't have to calculate all of this yourself. Our sales tax calculator looks up the exact combined rate for any address or ZIP code in the United States.

Why Combined Rates Vary So Much Within a State

If you live in one county and work in another, you might notice that the sales tax rate at the coffee shop near your office is different from the one near your home. That's because local taxes are, well, local. Two cities in the same state can have very different combined rates.

For example, in Colorado:

• The state rate is 2.9%.
• Some cities have combined rates as low as 2.9% (no local add-ons).
• Other cities, like Winter Park, have combined rates above 11% due to special district taxes for ski area improvements and other local projects.

That's an 8+ percentage point difference within the same state. So when someone asks "What's the sales tax in Colorado?" — the honest answer is "It depends on exactly where you are."

Tax-Exempt Items by Category

One of the most confusing aspects of sales tax is that not everything is taxed — and what's exempt varies by state. Here's a breakdown of the most common exemption categories:

Groceries

Most states either exempt groceries entirely or tax them at a reduced rate. As of 2026:

• Fully exempt (no tax on groceries): California, Delaware, Montana, New Hampshire, New Jersey, Oregon, Pennsylvania, and a few others
• Taxed at a reduced rate: Arkansas (1.5%), Illinois (1%), Tennessee (4%), Utah (1.75%), and others
• Taxed at the full rate: Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma, South Dakota, and a few others
• Mixed/complex rules: Some states exempt groceries but not prepared foods, snacks, or soft drinks

Pro tip: The definition of "groceries" matters more than you'd think. In many states, a loaf of bread is tax-exempt, but a hot rotisserie chicken from the same store is taxable as "prepared food." Candy might be taxable while cookies are not. It's a maze.

Prescription Drugs

The vast majority of states exempt prescription drugs from sales tax:

• Fully exempt: 44 states plus DC
• Taxed: Illinois (1%), and a few others with reduced rates
• Over-the-counter drugs: Exempt in about half of states, fully taxed in the other half

This is one area where most states agree — taxing essential medicine is generally unpopular. But over-the-counter medications like aspirin and allergy medicine? That's a mixed bag.

Clothing

Clothing exemptions are where things get really interesting:

• Fully exempt: Delaware, Montana, New Hampshire, Oregon (no sales tax at all), plus Pennsylvania, New Jersey, Minnesota, Vermont, and Massachusetts (up to $175 per item)
• Taxed at a reduced rate: New York exempts clothing under $110 per item
• Fully taxed at regular rate: Most other states

If you've ever wondered why people drive from New York to New Jersey to shop at the Paramus malls, now you know. In New Jersey, clothing is tax-exempt. In New York City, you'd pay 8.875% on that same jacket.

Other Common Exemptions

• Agricultural supplies: Exempt in most farming states
• Manufacturing equipment: Exempt in many states to encourage business investment
• Newspapers and magazines: Exempt in several states (but digital subscriptions usually aren't)
• Textbooks: Exempt in some states when purchased by students
• Religious items: Exempt in a few states
• Funeral expenses: Exempt in several states

The key takeaway: if you're making a major purchase, it's worth checking whether your state offers an exemption. You might be surprised.

How to Calculate Sales Tax

Now let's get practical. Whether you're budgeting for a purchase or running a small business, you need to know how to calculate sales tax.

The Basic Formula

Sales Tax = Purchase Price × Sales Tax Rate

Total Price = Purchase Price + Sales Tax

Or, more concisely:

Total Price = Purchase Price × (1 + Sales Tax Rate)

Example 1: Simple Calculation

You're buying a $200 television in Texas, where the state sales tax rate is 6.25%.

• Sales Tax = $200 × 0.0625 = $12.50
• Total Price = $200 + $12.50 = $212.50

But wait — if you're in Houston, the combined rate is actually 8.25% (6.25% state + 2% local). Let's redo that:

• Sales Tax = $200 × 0.0825 = $16.50
• Total Price = $200 + $16.50 = $216.50

That's a $4 difference just from the local portion. Always use the combined rate for your specific location.

Use our Texas sales tax calculator for exact rates by city and ZIP code.

Example 2: Large Purchase with Special District Tax

You're buying a $1,000 laptop in California. The state rate is 7.25%, but you're in Los Angeles County where the combined rate is 9.5%.

• Sales Tax = $1,000 × 0.095 = $95.00
• Total Price = $1,000 + $95.00 = $1,095.00

Example 3: Tax-Exempt Items in the Same Transaction

You're at a grocery store in Pennsylvania buying $80 in groceries and $25 in household cleaning supplies. In Pennsylvania, groceries are exempt but cleaning supplies are taxable at 6% (plus local tax, say 1% — combined 7%).

• Tax on groceries: $0 (exempt)
• Tax on cleaning supplies: $25 × 0.07 = $1.75
• Total Price = $80 + $25 + $1.75 = $106.75

This is why your grocery receipt often shows multiple tax lines — different items may be taxed at different rates.

Reverse Sales Tax Calculation

Sometimes you know the total amount you paid (including tax) and need to figure out the pre-tax price. This comes up in accounting, expense reports, and when you're trying to figure out the original price from a receipt that only shows the total.

The Reverse Formula

Pre-Tax Price = Total Price ÷ (1 + Sales Tax Rate)

Sales Tax Amount = Total Price − Pre-Tax Price

Example: Reverse Calculation

You have a receipt showing a total of $108.25 in Florida, where the combined rate in Miami is 7%.

• Pre-Tax Price = $108.25 ÷ 1.07 = $101.17
• Sales Tax Amount = $108.25 − $101.17 = $7.08

Let's verify: $101.17 × 0.07 = $7.08. ✓ Total: $101.17 + $7.08 = $108.25. ✓

Why This Matters for Businesses

If you're a business owner and you collect a flat amount that includes tax (like a service bundle that's advertised as "$500 including tax"), you need to back out the tax to report your revenue correctly. Your revenue is the pre-tax amount — the tax portion isn't income, it's money you owe to the state.

Our sales tax calculator includes a reverse calculation mode — just enter your total and it'll tell you the pre-tax price and the tax amount.

Online Sales Tax After Wayfair v. South Dakota

This is the section that changed everything for online sellers. If you run an online business or sell on platforms like Etsy, Amazon, or Shopify, pay close attention.

The Pre-Wayfair World (Before 2018)

Before 2018, online sellers only had to collect sales tax in states where they had a physical presence — a warehouse, office, store, or employees. This was based on the 1992 Supreme Court decision in Quill Corp. v. North Dakota.

The result? Many online retailers had no physical presence in most states, so they didn't collect sales tax in those states. Consumers were technically supposed to report and pay "use tax" on their out-of-state purchases, but almost nobody did. States were losing billions in uncollected tax revenue.

The Wayfair Decision (June 2018)

In South Dakota v. Wayfair, Inc., the Supreme Court overturned the physical presence rule. The new standard is economic nexus — if a seller has enough economic activity in a state, they have to collect sales tax there, regardless of physical presence.

South Dakota's law (which the Court upheld) established economic nexus thresholds of:

• $100,000 in gross revenue from sales to South Dakota customers in the previous 12 months, OR
• 200 separate transactions with South Dakota customers in the previous 12 months

Economic Nexus in 2026: What It Means for You

After Wayfair, virtually every state with a sales tax adopted its own economic nexus rules. While the thresholds vary by state, the most common standards are:

• $100,000 in sales into the state within a 12-month period (most common)
• 200 transactions into the state within a 12-month period (becoming less common as states drop this threshold)
• $100,000 in sales AND 200 transactions (a few states require both)

As of 2026, if your business sells more than $100,000 into most states, you likely need to register, collect, and remit sales tax there. This is true even if you're a one-person operation working from your kitchen table.

Marketplace Facilitator Laws

Here's some relief for small sellers: most states have enacted marketplace facilitator laws. These require platforms like Amazon, Etsy, eBay, and Walmart Marketplace to collect and remit sales tax on behalf of their third-party sellers.

If you only sell through a marketplace platform, the platform handles sales tax. You generally don't need to register or file in those states. But if you sell through your own website too, you're responsible for collecting tax on those direct sales.

Key Takeaways for Online Sellers

1. Know your nexus states. Track your sales by state monthly. If you're approaching the $100,000 threshold in any state, prepare to register.
2. Use automated tax software. Services like Avalara, TaxJar, and others can automatically calculate, collect, and file sales tax in every state. For most businesses, this is cheaper than the penalties for getting it wrong.
3. Don't forget about use tax. If you're a buyer and the seller didn't collect sales tax, you may owe use tax to your home state.
4. Keep good records. States can audit you going back several years. Having documentation of your sales, nexus analysis, and tax filings is essential.

State-by-State Sales Tax Quick Reference

Here's a snapshot of every state's sales tax situation as of 2026:

States With No State Sales Tax

• Alaska: No state rate (local rates up to 7.5%)
• Delaware: No sales tax
• Montana: No state rate (limited local resort taxes)
• New Hampshire: No sales tax (9% meals and rooms tax)
• Oregon: No sales tax

States With the Lowest State Rates

• Colorado: 2.9%
• Alabama: 4.0%
• Georgia: 4.0%
• Hawaii: 4.0% (technically an excise tax, but functions like sales tax)
• Louisiana: 4.45%
• New York: 4.0%
• Oklahoma: 4.5%
• North Dakota: 5.0%
• South Dakota: 4.5%
• Wisconsin: 5.0%

States With the Highest State Rates

• California: 7.25%
• Indiana: 7.0%
• Mississippi: 7.0%
• Rhode Island: 7.0%
• Tennessee: 7.0%
• Minnesota: 6.875%
• Nevada: 6.85%
• Kansas: 6.5%
• New Jersey: 6.625%
• Arkansas: 6.5%

Remember, the state rate is just part of the picture. Always check the combined rate for your specific location. Our New York sales tax calculator and Illinois sales tax calculator are great examples — the combined rates in New York City and Chicago are dramatically higher than the state rates alone.

Sales Tax Holidays in 2026

Many states offer sales tax holidays — short periods (usually a weekend or a week) when certain items are exempt from sales tax. Common themes include:

• Back-to-school: Clothing, school supplies, and computers under certain price limits (typically in August)
• Emergency preparedness: Generators, flashlights, batteries, and other supplies (typically before hurricane season)
• Energy Star appliances: Energy-efficient appliances and sometimes HVAC systems
• Second Amendment: Hunting and fishing supplies in some states

Sales tax holidays are a great time to make major purchases, but the rules are specific. Each state defines which items qualify and sets price caps. A $1,500 laptop might be tax-free during a back-to-school holiday, but a $2,000 one might not qualify.

Check your state's department of revenue website for specific dates and rules for 2026 sales tax holidays.

Common Mistakes People Make With Sales Tax

1. Using the State Rate Instead of the Combined Rate

This is the #1 mistake. You look up your state's rate, calculate the tax, and it's wrong because you forgot about local taxes. Always use the combined rate for your specific address.

2. Forgetting That Online Purchases May Be Taxed

After the Wayfair decision, most online purchases are now subject to sales tax. If an online seller doesn't collect it, you may owe use tax. Ignoring this won't make it go away.

3. Assuming Groceries Are Always Tax-Free

They're not. Several states tax groceries at the full rate, and many others tax them at a reduced rate. Check your state's rules before assuming your grocery bill is tax-free.

4. Not Taking Advantage of Sales Tax Holidays

If your state offers a sales tax holiday on big-ticket items you were going to buy anyway, waiting a few weeks can save you significant money. On a $2,000 computer, an 8% sales tax holiday saves you $160.

5. Miscalculating Reverse Sales Tax

The reverse sales tax formula is not just "multiply by the tax rate." You divide by (1 + rate), not multiply. Using the wrong formula leads to errors in accounting and expense reports.

Frequently Asked Questions

What state has the highest sales tax?

Louisiana has the highest average combined sales tax rate at approximately 9.55%. However, the highest state-level rate belongs to California at 7.25%. The difference is that Louisiana's local taxes are much higher on average than California's.

What state has the lowest sales tax?

Among states that charge sales tax, Colorado has the lowest state rate at 2.9%. However, local taxes in Colorado can push combined rates much higher. Four states — Delaware, Montana, New Hampshire, and Oregon — have no sales tax at all.

Do I have to pay sales tax on online purchases?

In most cases, yes. After the 2018 Supreme Court decision in South Dakota v. Wayfair, states can require online sellers to collect sales tax based on economic nexus, not just physical presence. If the seller doesn't collect tax, you may owe use tax to your state.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller at the point of sale. Use tax is paid directly by the buyer when sales tax wasn't collected — typically on out-of-state or online purchases. The rate is usually the same; the difference is who pays it and when.

Are groceries tax-free?

It depends on the state. Some states fully exempt groceries (like California and New Jersey), some tax them at a reduced rate (like Illinois at 1%), and some tax them at the full rate (like Alabama and Mississippi). Many states also distinguish between "groceries" and "prepared food" — a cold sandwich might be tax-free while a hot one is taxed.

How do I find my exact sales tax rate?

Use our free sales tax calculator and enter your ZIP code or address. It will look up the exact combined rate (state + county + city + special district) for your location.

Do I need to collect sales tax if I sell online?

If your business has economic nexus in a state (typically $100,000+ in sales or 200+ transactions into that state in the past 12 months), you generally need to register for and collect sales tax in that state. Marketplace sellers may have their taxes handled by the platform.

Is clothing tax-free?

In some states, yes. Pennsylvania, New Jersey, Minnesota, Vermont, and Massachusetts exempt most clothing from sales tax. New York exempts clothing under $110 per item. Most other states tax clothing at the full rate.

Can sales tax rates change during the year?

Yes. Local jurisdictions can change their rates, and special district taxes can be added or removed. Most rate changes take effect on January 1 or July 1, but they can happen at any time. Our calculator is updated regularly to reflect the latest rates.

What is a sales tax holiday?

A sales tax holiday is a temporary period when a state waives sales tax on certain items. These typically happen once a year and cover categories like back-to-school supplies, emergency preparedness items, or Energy Star appliances. Dates and eligible items vary by state.

Sales tax doesn't have to be confusing. Whether you're a consumer trying to budget for a big purchase or a business owner navigating multi-state compliance, understanding how rates work is the first step. Use our free sales tax calculator to get exact rates for any address in the United States — no guessing required.