Sales Tax Calculator

What is Sales Tax?

A sales tax is a consumption tax charged when goods, and sometimes services, are sold to the final customer. The seller adds it to the price at checkout, collects it and sends it to the government. Because it is a percentage of the price, someone buying a $100 item in a place with a 6.5% rate pays $6.50 of tax and $106.50 in total. To find the pre-tax price from a receipt, divide the total by one plus the rate: $106.50 ÷ 1.065 = $100.

After tax price = before tax price × (1 + rate)

Sales tax

before tax price × rate

Before tax price

after tax price ÷ (1 + rate)

Rate

after tax price ÷ before tax price − 1

U.S. Sales Tax

The United States has no national sales tax. Instead, 45 states and the District of Columbia levy a statewide sales tax, and thousands of counties, cities and special districts add local sales taxes on top. Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, although many Alaska municipalities charge a local one. The rate a shopper pays is the sum of every layer that applies at the place of sale, so combined rates can vary from one side of a street to the other.

Statewide rates range from 2.9% in Colorado to 7.25% in California. Combined state and local rates are highest in Louisiana, Tennessee, Arkansas, Washington and Alabama, where the average shopper pays more than 9%, and parts of some cities exceed 10%. Some states keep the statewide rate low but allow high local rates, while others leave little room for local add-ons.

What is taxed varies too. Most states tax tangible goods and exempt prescription drugs. Many exempt groceries or tax them at a reduced rate, and a few exempt clothing up to a certain price. Services such as haircuts, repairs, software and streaming are taxed in some states and not in others. Many states hold sales tax holidays, often before the school year, when clothing, school supplies or energy-efficient appliances can be bought tax-free.

Online shopping is generally taxable. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require remote sellers with enough sales into the state to collect sales tax, and all states with a sales tax now do. Marketplaces such as Amazon and eBay collect it on behalf of third-party sellers. When a seller does not collect tax, buyers technically owe use tax at the same rate to their state, though few individuals pay it.

The table lists statewide base rates as of 2025. Add your county and city rates for the combined rate; your state revenue department website has a rate lookup by address.

U.S. History of Sales Tax

Taxes on sales have existed since antiquity, but the modern American retail sales tax is a product of the Great Depression. As property and income tax collections collapsed in the early 1930s, states needed a new source of revenue to keep schools and relief programs running. Mississippi adopted a general retail sales tax in 1932, and more than twenty states followed within the decade. By 1969, 45 states had one.

Proposals for a federal sales tax surfaced during the Depression and again at intervals since, including the national retail sales tax known as the FairTax, but none has passed. Rates have crept up over the decades as states and localities turned to sales tax to fund growing budgets, and today sales and excise taxes are one of the largest sources of state tax revenue.

How to Deduct Sales Tax in the U.S.?

Taxpayers who itemize deductions on Schedule A can deduct either state and local income taxes or state and local general sales taxes, not both. Sales tax usually wins for residents of states with no income tax, such as Texas, Florida, Washington, Nevada, Tennessee, South Dakota, Wyoming and Alaska, and for anyone who made a large purchase, such as a car, boat or home renovation materials, during the year.

There are two ways to figure the deduction. You can add up the actual sales tax on every receipt for the year, which requires careful records. Or you can use the IRS optional sales tax tables, which estimate typical sales tax based on income, family size and location, and then add the actual tax paid on certain big-ticket items such as vehicles. The IRS website has a sales tax deduction calculator that does the table lookup.

The deduction is part of the state and local tax (SALT) total, which is capped. The cap was $10,000 from 2018 through 2024 and rose to $40,000 for 2025 and $40,400 for 2026 under the 2025 tax law, with lower caps for married people filing separately and for high incomes. The deduction only helps if your total itemized deductions exceed the standard deduction. Businesses generally do not deduct sales tax separately; it is included in the cost of the items purchased.

Value-Added Tax (VAT)

Most of the world taxes consumption through a value-added tax instead of a retail sales tax. More than 170 countries use a VAT, including every European Union member, the United Kingdom, Canada (as the goods and services tax, or GST), Australia, India, Japan and China. The United States is the only member of the OECD without one.

A VAT is collected in stages. Each business in the supply chain charges VAT on its sales and claims a credit for the VAT it paid on its own purchases, so it remits tax only on the value it added. A furniture maker that buys $400 of wood and sells a table for $1,000 owes VAT on the $600 difference. By the time the product reaches the final buyer, the whole price has been taxed once, and the consumer bears the full cost.

The staged design makes VAT harder to evade than a retail sales tax, because each business has an incentive to get invoices from its suppliers to claim its credits. It also avoids tax cascading, where business inputs are taxed again and again, a problem that US sales taxes have when they apply to business purchases.

VAT rates are usually higher than US sales tax rates. Standard rates in the EU range from 17% in Luxembourg to 27% in Hungary, and the UK rate is 20%. Most countries apply reduced rates to food, books, medicine and other necessities. In many countries the VAT is included in the shelf price, so shoppers see one final number, while US prices are normally shown before tax. Tourists can often reclaim VAT on goods they take home.

Critics of both sales taxes and VATs note that they are regressive: lower-income households spend a larger share of their income, so they pay a larger share of income in tax. Exemptions for necessities and rebates soften this effect.

Frequently asked questions

Sources

• IRS – Sales Tax Deduction Calculator
• IRS – Topic No. 503, Deductible Taxes
• European Commission – Taxation and Customs Union