Sales Tax Calculator

How US sales tax works

The United States has no federal sales tax. Instead, 45 states plus the District of Columbia levy their own, and five states — Alaska, Delaware, Montana, New Hampshire and Oregon — levy no statewide tax at all. That is the first thing to unlearn if you are arriving from a country with a single national VAT.

The second thing is that the rate you see on a state's website is rarely the rate a customer pays. Most states let counties, cities and special districts stack their own layers on top of the state base, which is why the same item can cost different amounts two blocks apart.

Add the layers together and you get the combined rate, which is the number to use at the register. In most of the country that is one to three points above the state base. In a handful of large cities — Seattle, Chicago, parts of Louisiana and Alabama — it runs considerably higher.

Where the sale happens

Which combined rate applies depends on where the sale is sourced, and states use two different rules:

• Destination sourcing. Tax is due where the buyer receives the goods. Most states use this, and it is now the norm for interstate sales.
• Origin sourcing. Tax is due where the seller is located, regardless of where the buyer is. A minority of states still apply it to in-state sales, and a few use a hybrid.

For an online seller this is the whole ballgame: under destination sourcing you need the customer's shipping address, and you need to know the combined rate for that address, not just for their state.

The two formulas

Adding tax and removing tax are not mirror images of each other, and mixing them up is the most common error on this page.

Taking 8% off a tax-inclusive $108 gives $99.36, not $100.00. The rate was applied to the price, but you applied it to the price plus tax, so you removed more than was ever added. The correct move is always to divide, never to subtract.

Sales tax rates by state

These are the state base rates — the layer the state itself controls. Where the last column says yes, expect the rate your customer actually pays to be higher. Combined rates change as local measures pass, so treat this table as a starting point and confirm against the destination state's revenue department before you file.

Two quirks worth knowing. Alaska has no state tax but many boroughs and cities levy their own, so an Alaska sale is not automatically tax-free. New Mexico technically levies a gross receipts tax on the seller rather than a sales tax on the buyer, which is why its base rate looks unusually low for a state with no local-option system.

What is actually taxable

Rate is only half the question. Whether the item is taxable at all varies by state, and the categories that trip people up are consistent.

If you sell a mix of these, most point-of-sale systems let you flag products as taxable or exempt by category. Set that up once rather than deciding at the register.

Three worked examples

1. Adding tax to a retail sale

A shop in Austin, Texas sells a taxable item for $249.00. Texas has a 6.25% state rate and local taxes typically bring the combined rate to around 8.25%. The tax is 249 × 0.0825 = $20.54, and the customer pays $269.54.

Using the state base alone would have charged $15.56 — a shortfall of $4.98 that the shop still owes the state. This is the single most expensive mistake a new retailer makes: collecting the state rate when the combined rate applies.

2. Backing tax out of a receipt

A receipt from Seattle reads $108.90 with no tax line broken out. The combined rate there is around 10.25%. To find the pre-tax sale, divide rather than subtract: 108.90 ÷ 1.1025 = $98.78, so tax was $10.12.

Subtracting 10.25% from $108.90 would have given $97.74 and a tax figure of $11.16 — both wrong, because the percentage belongs to the smaller pre-tax number, not the larger total.

3. Comparing an online purchase across two states

A $1,200 laptop, shipped either to Portland, Oregon or to Los Angeles, California. Oregon has no state sales tax and no local tax, so the total is $1,200.00. A Los Angeles address sits at roughly 9.5% combined, so the total is 1,200 × 1.095 = $1,314.00.

A difference of $114 on one purchase. If you are the seller, the reverse matters: the same laptop sold into Oregon and California generates two different amounts of tax to remit, and under destination sourcing you owe California's rate on the California sale regardless of where you ship from.

When you have to collect tax out of state

Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, a state can require a remote seller to collect its tax even with no physical presence there, provided the seller's activity in the state crosses a threshold. That requirement is called economic nexus.

Thresholds and measurement periods differ by state: some count a calendar year, some the previous four quarters, and a few have no transaction test at all. Once you register in a state, most require a return even in months with zero sales.

Selling into many states quickly outgrows a spreadsheet. Register deliberately — start with the states where you actually cross the threshold, and revisit quarterly rather than trying to cover all 45 at once.

Five mistakes to avoid

1. Charging the state base rate instead of the combined rate. The most expensive error in retail. The difference is small per sale and large per year, and the shortfall is still owed.
2. Removing tax by subtracting the percentage. Subtract 8% from a tax-inclusive $108 and you get $99.36. The correct answer is $100.00, and it comes from dividing.
3. Treating a whole state as one rate. Ohio, Colorado and Louisiana in particular have widely varying local rates. Use the destination address, not the state default.
4. Assuming all services are exempt, or all goods are taxable. Both assumptions are wrong in enough states to cause a filing problem. Check the category, not the general rule.
5. Ignoring use tax on your own purchases. If a supplier did not charge you tax, you probably owe it. The liability follows the buyer, not the seller.

Sources and standards

FAQ

How do I calculate sales tax on a price?

Multiply the pre-tax price by the rate divided by 100. A $100 item at 8% is $100 × 0.08 = $8.00 of tax and $108.00 total. Use the combined rate for the destination address, not the state base rate.

How do I back sales tax out of a total?

Divide the total by 1 plus the rate expressed as a decimal, never subtract the percentage. A $108.00 total at 8% is 108 ÷ 1.08 = $100.00 pre-tax, so $8.00 was tax. Switch the calculator to Remove tax above and it does this for you.

Which states have no sales tax?

Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax. Alaska is the exception within the exception — many of its boroughs and cities levy local sales tax, so an Alaska sale is not automatically tax-free.

Why is the tax at checkout higher than the state rate?

Local add-ons. Counties, cities and special districts stack their own rates on the state base. In large cities the combined rate typically runs one to three points above the state rate, and in a few places considerably more.

Do I charge sales tax on shipping?

It depends on the state and on how the charge is presented. Shipping is generally taxable in Texas and New York when the underlying sale is taxable, and generally exempt in California when separately stated. Check the destination state's rule before you build it into your checkout.

What is the difference between sales tax and use tax?

They are the same tax collected at different points. Sales tax is collected by the seller at the time of sale; use tax is owed by the buyer when no tax was collected, most commonly on out-of-state or online purchases. The rate is normally the buyer's home rate.

What is economic nexus?

After South Dakota v. Wayfair in 2018, states can require remote sellers above a sales or transaction threshold to collect their tax without any physical presence. Common thresholds are $100,000 in sales or 200 transactions per state per year, though the details differ by state.

Do marketplace sales count toward my own nexus?

Usually not. Marketplace facilitator laws in all 45 sales-taxing states make the platform responsible for collecting and remitting on sales through its marketplace, and most states exclude those sales from the seller's own threshold calculation. Rules differ, so check the specific state.

Is the rate different for services?

Frequently yes. Most states do not tax professional services such as consulting, legal or accounting work, while a minority tax specific services such as repairs, processing or security. Treat services as exempt only after checking the destination state.

Are groceries taxed?

Most states exempt groceries, but roughly a dozen tax them fully or at a reduced rate — Alabama, Mississippi, Tennessee and South Dakota among them. Prepared food is taxable almost everywhere, so a supermarket sandwich and a supermarket loaf can ring up differently.

Do I have to file a return in a state where I had no sales?

Once you are registered, most states require a return for every filing period even when the amount due is zero. This is a common and avoidable penalty. Some states offer a simplified zero-return or an annual filing option for low-volume sellers.

Can I use one rate for the whole country?

No. There is no national sales tax in the United States, and combined rates vary by address, not just by state. Software that resolves the rate from the full destination address is the practical answer once you sell into more than a couple of states.