Compute any one of the following, given the other two: before-tax price, sales tax rate, or after-tax price.
The table below shows the general state sales tax rate and the maximum combined rate (state + local/city) for each U.S. state and territory.
| State | General State Sales Tax | Max Rate (with Local Tax) |
|---|
A sales tax is a consumption tax imposed by a government on the sale of goods and services. The vendor typically collects the tax from the consumer at the point of purchase and remits it to the government. Sales tax is a regressive tax — it takes a larger percentage of income from lower-income households than from higher-income ones, because spending on taxable goods makes up a bigger share of a lower-income person's budget.
In most countries outside the U.S., this type of tax is known as Value-Added Tax (VAT) or Goods and Services Tax (GST), which works differently: VAT/GST is collected at every stage of the supply chain, whereas U.S. sales tax is generally collected only from the final consumer.
There are three common ways to work with sales tax, depending on what you already know:
If you know the before-tax price and the tax rate:
Example: $100 item with 6.5% tax → Tax = $6.50 → After-Tax = $106.50
If you know the after-tax price and the tax rate:
Example: $106.50 after-tax with 6.5% tax → Before-Tax = $106.50 ÷ 1.065 = $100.00
If you know both the before-tax and after-tax prices:
Example: Before-tax $100, After-tax $106.50 → Rate = (6.50 ÷ 100) × 100 = 6.5%
In the United States, there is no federal sales tax. Sales tax is imposed at the state level, and many states allow counties, cities, and special districts to add their own local sales taxes on top. This creates thousands of different combined rates across the country.
Five states do not impose a statewide sales tax:
Based on maximum combined rates:
What gets taxed varies widely by state. Generally taxable:
Common exemptions (vary by state):
| Sales Tax (U.S.) | Collected only at the final point of sale to the consumer. Businesses buy from suppliers without paying sales tax (via resale certificates). |
| VAT | Value-Added Tax. Collected at every stage of production — each business charges VAT on its output and gets credit for VAT paid on inputs. Used in 160+ countries. |
| GST | Goods and Services Tax. Similar to VAT; used in countries like Canada, Australia, India, Singapore, and New Zealand. |
Yes, but only if you itemize deductions on your federal income tax return (Schedule A). You can choose between deducting state and local income taxes or state and local sales taxes — but not both.
Less than 2% of Americans actually claim the sales tax deduction each year, because most take the standard deduction instead. It becomes valuable mainly if you made a large purchase in one year — such as a car, boat, wedding, engagement ring, or major home appliance.
The concept of taxation without representation was a key driver of the American Revolution — the British Crown imposed taxes on the American colonies, including sales taxes on items like tea, without giving them a voice in Parliament.
After independence, the U.S. avoided a federal sales tax. The first state sales tax was introduced by Mississippi in 1930 during the Great Depression, as states struggled to raise revenue. The idea spread quickly, and today sales tax provides nearly one-third of state government revenue — second only to income tax.
Q: How do I calculate sales tax on a purchase?
Multiply the before-tax price by the tax rate (as a decimal). Example: $50 item at 8% tax = $50 × 0.08 = $4 tax, total $54.
Q: What's the difference between sales tax and use tax?
Sales tax is collected by the seller at the point of sale. Use tax is owed by the buyer when sales tax wasn't collected — for example, online purchases from out-of-state sellers who don't have a tax nexus in your state.
Q: Do online purchases have sales tax?
Since the 2018 South Dakota v. Wayfair Supreme Court ruling, online sellers must collect sales tax in states where they have "economic nexus" — typically $100,000+ in sales or 200+ transactions per year.
Q: Are groceries taxed?
Most U.S. states exempt unprepared groceries from sales tax, but prepared food and restaurant meals are almost always taxed.
Q: What's the highest sales tax in the U.S.?
Depending on the location, combined state + local rates can reach over 13% — for example, in parts of Alabama and Louisiana.
Q: How do I calculate the before-tax price from the after-tax price?
Divide the after-tax price by (1 + tax rate). Example: $108 after-tax with 8% tax → $108 ÷ 1.08 = $100 before-tax.