Sales tax rates vary by state and sometimes by city, so there's no single answer
The sales tax you pay depends on where you buy something, not where you live. When you make a purchase, the tax rate that applies is the one in effect at that specific location — the store's address, the warehouse's address, or the seller's location if you're buying online.
State sales tax rates range from zero to just over 7 percent. Some states charge no sales tax at all (Alaska, Delaware, Montana, New Hampshire, and Oregon). Most states fall between 4 and 7 percent. On top of the state rate, many cities and counties add their own local tax, which can push the total to 10 percent or higher in some places.
The rate you see on a price tag or receipt is the combined state and local rate for that exact location. A shirt that costs $20 might have $1.20 in tax in one city and $1.60 in another, even if both are in the same state.
Key Takeaways
- Sales tax rates are set by state and local governments, and they range from 0 percent in some states to over 10 percent when state and local taxes combine.
- The tax rate that applies is always the one where the purchase happens, not where you live or where the seller is based.
- Most states tax general purchases like clothing and groceries, but some states exempt groceries or certain items.
- Online purchases are taxed based on the buyer's location in most states, though the rules have changed in recent years.
How state sales tax rates are set
Each state legislature decides whether to have a sales tax and what rate to charge. States that do charge sales tax set a base rate — the minimum percentage that applies statewide. That base rate is what you'll pay on most purchases in most places within that state.
The base rate varies widely. California's is 7.25 percent. Texas is 6.25 percent. New York is 4 percent. These rates can change when a state passes new tax legislation, but that happens infrequently — most states keep their base rate the same for years at a time.
States also decide what items are taxable and what items are exempt. Most states tax clothing and household goods. Many states exempt groceries or tax them at a lower rate. Some states don't tax services like haircuts or car repairs, while others do. These rules differ from state to state and sometimes change.
How local sales tax adds to the state rate
Cities and counties can add their own sales tax on top of the state rate. This local tax goes to fund schools, roads, public transit, and other local services. A city might add 1 percent, and the county might add another 0.5 percent, bringing the total to 8.5 percent if the state rate is 7 percent.
Local rates vary dramatically even within the same state. Two towns 10 miles apart might have different total tax rates because one city has a higher local rate than the other. This is why the same item can cost different amounts in tax depending on which store you visit.
Some states allow cities and counties to set their own rates freely. Others cap how high local tax can go or require voter approval before a city can raise it. A few states don't allow local sales tax at all, so the state rate is the only rate that applies everywhere in that state.
Why the tax you pay might surprise you at checkout
Sales tax is not included in the price tag in most of the United States. When you see a price of $19.99, that's before tax. The cashier or the online checkout will add the tax on top, so your final bill will be higher. This is different from many other countries, where the displayed price includes all taxes.
The amount of tax added depends on the total purchase and the tax rate where you're buying. A $100 purchase in a place with 8 percent tax will have $8 added. The same $100 purchase in a place with 6 percent tax will have $6 added. Some items might be exempt from tax even if others in your cart are taxed, so the tax on your receipt might not be a straightforward percentage of the total.
Online shopping has made this more complicated. For many years, online retailers only charged sales tax if they had a physical location in your state. That changed in 2018 when the U.S. Supreme Court ruled that states could require online sellers to charge sales tax based on where the buyer lives. Most large online retailers now charge sales tax on orders shipped to your address, using the tax rate for your location.
Sales tax rates by region
The highest combined state and local sales tax rates are found in places like Louisiana, Arkansas, and parts of Tennessee and Alabama, where totals can exceed 9 percent. The lowest rates are in states like Colorado, Georgia, and Hawaii, where combined rates are around 4 to 5 percent. States with no sales tax — Alaska, Delaware, Montana, New Hampshire, and Oregon — have zero state tax, though some cities in those states may have local taxes.
If you travel or move, the tax rate you pay will change. Someone moving from Oregon (no state sales tax) to California (7.25 percent state tax, plus local tax) will notice a significant difference in what they pay at checkout. This is one reason people sometimes factor sales tax into decisions about where to make large purchases.
What items are usually taxed and what aren't
Most states tax clothing, electronics, furniture, and other goods. Groceries — items you buy to cook at home — are exempt from sales tax in many states, though some states tax them at the full rate or a reduced rate. Prepared food from restaurants is almost always taxed.
Services are taxed differently depending on the state. A haircut might be taxed in one state and exempt in another. Car repairs, plumbing, and other services may or may not be taxed depending on where you live. Prescription medications are usually exempt, but over-the-counter medicines are often taxed.
Some states offer temporary tax holidays — usually a week in August before school starts — when clothing and school supplies are exempt from tax. These holidays are set by state law and vary by state.
How to find the sales tax rate for a specific location
Your state's Department of Revenue or Department of Taxation publishes the current sales tax rates for every city and county. You can search their website by entering your zip code or city name to find the exact combined rate. Many states also have a sales tax lookup tool that shows you the rate for a specific address.
If you're shopping online, the retailer's checkout page will show you the tax rate being applied to your order based on your shipping address. That rate is the combined state and local rate for that location. If you're buying in a physical store, the receipt will show the tax rate that was charged.
Tax rates can change when local governments pass new tax measures or when state law changes. If you need the current rate for planning purposes — like budgeting for a large purchase — check your state's tax authority website rather than relying on a rate you remember from the past.
Frequently Asked Questions
Do I have to pay sales tax on everything I buy?
No. Most states exempt groceries, prescription medications, and certain other items. Some states don't tax services. The items that are taxed and the items that are exempt depend on your state and sometimes your city. Your receipt will show which items were taxed and which weren't.
Why is sales tax not included in the price tag?
Most U.S. states don't require retailers to include sales tax in the displayed price. The price tag shows the base price, and tax is added at checkout. This is a state-by-state choice — some states have considered requiring tax-inclusive pricing, but most have not changed this practice.
Do I pay sales tax on online purchases?
Yes, in most cases. Large online retailers now charge sales tax on orders shipped to your address, using the tax rate for your location. The tax is calculated based on where you live, not where the seller is based or where the warehouse is located.
Can sales tax rates change during the year?
Yes, though it's not common. States and cities can pass new tax laws that change rates, but most changes happen at the beginning of a calendar year or fiscal year. Some local tax increases require voter approval, which can take time. You can check your state's tax authority website to see if any rate changes are scheduled.
What's the difference between sales tax and use tax?
Sales tax is charged when you buy something. Use tax is a tax on items you buy outside your state and bring into your state — it's meant to prevent people from avoiding sales tax by shopping across state lines. Most people don't pay use tax directly; it's mainly enforced for large business purchases.