Sales tax is a consumption tax charged at the point of purchase on most goods and some services. In the United States, sales tax rates vary by state, county, and city — meaning the same item can have a different final price depending on where you buy it. Knowing how to calculate sales tax helps you budget accurately before reaching the register.
The formulas
To add 8% tax to a $50 item: $50 × 1.08 = $54. The tax portion is $4. To reverse it — finding the pre-tax price from a $54 receipt at 8%: $54 ÷ 1.08 = $50.
US state sales tax rates at a glance
Here are the base state rates for some of the most populated US states. Keep in mind that local taxes (county and city) can add 1–5% on top of the state rate:
- California: 7.25% state rate (combined rates often reach 9–10.25% with local taxes)
- Texas: 6.25% state rate (up to 8.25% combined)
- New York: 4% state rate (combined rates of 7–8.875% in NYC)
- Florida: 6% state rate (up to 7.5% combined)
- Washington: 6.5% state rate (up to 10.25% combined in Seattle)
- Oregon: 0% — one of five states with no sales tax
States with no sales tax
Five US states charge no state-level sales tax: Oregon, Montana, New Hampshire, Delaware, and Alaska. However, Alaska allows local jurisdictions to impose their own sales taxes, so some Alaskan cities do collect it. These zero-tax states can save shoppers significantly on big-ticket purchases.
Sales tax and online shopping
Since the 2018 Supreme Court ruling in South Dakota v. Wayfair, online retailers are required to collect sales tax in states where they have "economic nexus" — which most large retailers meet. This means buying online usually includes sales tax at your local rate. The days of tax-free online shopping are largely over for US consumers.
Tax-exempt items
Many states exempt certain categories from sales tax. Common exemptions include groceries (most states exempt unprepared food), prescription medications, and clothing (exempt in Pennsylvania, New Jersey, and a few others). Some states hold annual "tax-free weekends" for back-to-school shopping.