Sales tax in the United States is complicated. Unlike most countries that have a single national sales tax (VAT), the US has a patchwork of state, county and city rates that vary by location. A purchase in Portland, Oregon has zero sales tax, while the same purchase in Nashville, Tennessee has over 9% tax. For businesses, consumers and travelers, understanding how sales tax works is essential for accurate budgeting, pricing and compliance. In this guide, we break down everything you need to know about US sales tax in 2026.
How US Sales Tax Works
Sales tax in the US is a consumption tax levied by state and local governments on the sale of goods and services. The tax is collected by the seller at the point of sale and remitted to the state tax authority. There is no federal sales tax — every state sets its own rules, rates and exemptions.
Forty-five states and the District of Columbia levy a state-level sales tax. The rates range from 2.9% (Colorado) to 7.25% (California). On top of the state rate, counties, cities and special districts can add their own local sales taxes, which can significantly increase the total rate. In some cities, the combined state and local rate exceeds 10%.
What is taxed also varies by state. Most states tax tangible personal property (physical goods) but exempt certain categories like groceries, prescription drugs and clothing. For example, Pennsylvania exempts most clothing from sales tax, while Texas has a sales tax holiday on school supplies in August. Services are taxed in some states but not others — haircuts are taxed in New York but not in Texas. Digital goods and SaaS subscriptions are an evolving area where state rules differ widely.
State-by-State Sales Tax Rates
Here is a quick reference of state-level sales tax rates for 2026. Note that these are state rates only — local rates can add significantly to the total:
Highest state rates: California (7.25%), Indiana (7%), Mississippi (7%), Rhode Island (7%), Tennessee (7%), Minnesota (6.875%), Nevada (6.85%), New Jersey (6.625%).
Lowest state rates: Colorado (2.9%), Alabama (4%), Georgia (4%), New York (4%), Wyoming (4%), South Dakota (4.5%), Oklahoma (4.5%), North Carolina (4.75%).
Mid-range rates: Texas (6.25%), Florida (6%), Washington (6.5%), Massachusetts (6.25%), Illinois (6.25%), Pennsylvania (6%), Michigan (6%), Ohio (5.75%).
These rates change periodically as state legislatures adjust tax policy. Always verify the current rate with your state's Department of Revenue before making financial decisions based on sales tax calculations.
States with No Sales Tax
Five US states have no state-level sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. These states are popular shopping destinations for residents of neighboring high-tax states. For example, residents of Vancouver, Washington (6.5% state sales tax) frequently cross the border to Portland, Oregon (0% sales tax) for major purchases.
However, Alaska allows local municipalities to levy their own sales taxes. Many Alaskan cities have local sales taxes ranging from 1% to 7%. Delaware, Montana, New Hampshire and Oregon have truly zero sales tax at both state and local levels, making them the only states where you can make purchases with zero sales tax.
It is worth noting that states without sales tax often compensate with other taxes. Oregon has a relatively high state income tax. New Hampshire has high property taxes. Delaware has a gross receipts tax on businesses. The absence of sales tax does not mean the state collects no taxes — it just collects them through different channels.
Local and City Tax Additions
The state sales tax rate is only part of the story. Counties, cities and special taxing districts can add their own sales taxes on top of the state rate. These local additions can significantly increase the total rate and vary even within the same state.
For example, in California, the state rate is 7.25%, but cities and counties can add up to 2.5% in local taxes. In Los Angeles, the combined rate is 9.5%. In San Francisco, it is 8.625%. In some Alameda County cities, it exceeds 10%. A $100 purchase in Los Angeles costs $109.50 after tax, while the same purchase in a city with a lower local rate might cost $108.50.
In New York, the state rate is 4%, but New York City adds 4.5% plus a 0.375% Metropolitan Commuter Transportation District surcharge, bringing the total to 8.875%. In Chicago, Illinois, the combined state, county and city rate is 10.25% — one of the highest in the nation.
For businesses, this means the sales tax you charge depends on where the buyer is located, not where the seller is located. This is the "destination-based" sales tax model used by most states. If you sell a product online to a customer in Seattle, you charge Washington's combined state and local rate for Seattle's location, even if your business is based in Texas.
How to Calculate Sales Tax
Calculating sales tax is straightforward once you know the combined rate. The formula is: Tax Amount = Purchase Price × Combined Tax Rate. For example, a $50 purchase in a location with a 7.5% combined rate would have a tax of $3.75 ($50 × 0.075), making the total $53.75.
The Sales Tax Calculator from Automarkly handles this calculation instantly. Enter the purchase amount and the tax rate, and the calculator shows the tax amount and the total cost. This is useful for consumers budgeting purchases, for businesses pricing products and for travelers estimating costs in different states.
For businesses that need to calculate tax for multiple locations, the Percentage Calculator is a quick alternative. Enter the purchase amount and the tax percentage, and the calculator returns the tax amount. This is especially useful for businesses that operate in multiple states and need to calculate tax at different rates throughout the day.
Sales Tax for E-Commerce Businesses
The 2018 Supreme Court decision in South Dakota v. Wayfair fundamentally changed sales tax for online sellers. Before Wayfair, a state could only require a seller to collect sales tax if the seller had a physical presence (nexus) in the state. After Wayfair, states can require remote sellers to collect sales tax based on economic activity alone — typically $100,000 in annual sales or 200 separate transactions in the state.
For US e-commerce businesses, this means you may need to register for sales tax permits in multiple states, collect tax at different rates based on the buyer's location and remit tax to each state on its own schedule (monthly, quarterly or annually). This is a significant administrative burden for small businesses.
Most e-commerce platforms (Shopify, WooCommerce, BigCommerce) offer sales tax automation that calculates the correct rate based on the buyer's address. However, the business is still responsible for registering in each state, filing returns and remitting the collected tax. If you are a US e-commerce owner, consult a tax professional to understand your multi-state sales tax obligations.
Using a Free Sales Tax Calculator
For quick, one-off calculations, the free Sales Tax Calculator is the simplest tool. It runs in your browser with no signup and no data upload. Enter the purchase amount and the applicable tax rate, and the calculator returns the tax amount and total cost.
For travelers, this is useful for estimating the total cost of purchases in different states. If you are planning a shopping trip from Oregon (0% tax) to California (7.25%+ local), the calculator helps you understand the price difference. For businesses, it helps with pricing strategy — if your product costs $100 and you want the final price (including tax) to be under $110, you need to account for the maximum possible tax rate in your target markets.
For US consumers and businesses, understanding sales tax is a practical necessity. The patchwork of state and local rates can be confusing, but the right tools make calculation effortless. Bookmark the Sales Tax Calculator and the Percentage Calculator for instant, accurate tax calculations whenever you need them.