Amount
Tax Rate (%)
Mode
Result (click to copy)
Using This Result
Use your combined local rate
Enter your specific state + city/county combined rate, not just the state rate — actual sales tax due can be several points higher once local tax is included.
"Add" vs "Remove" mode
Use Add tax when you have a pre-tax price and want the checkout total. Use Remove tax when you already know the tax-inclusive total and want to back out the original price.
Compare table is for reference only
The rate comparison table shows what the same price would cost at other common rates — useful for budgeting across locations, not a substitute for your actual jurisdiction's rate.
➜ Next step: Building a full invoice for this sale? Use the Invoice Generator and enter this tax rate directly.
How to Use the Sales Tax Calculator
- Enter the pre-tax price — the price of the item before sales tax is added.
- Enter sales tax rate — your state and local combined rate. US rates range from 0% (Oregon, Montana, New Hampshire) to over 10% (some cities in Tennessee and Louisiana).
- Read the tax amount — the dollar amount of sales tax on this purchase.
- Check total price — what you will actually pay at checkout including tax.
- Reverse calculate — if you know the tax-inclusive total, enter it and the rate to find the pre-tax price.
🇺🇸 US sales tax complexity: The US has no federal sales tax. Each state sets its own rate, and cities/counties add additional local taxes. The combined rate varies from 0% to 11.45%. Always use your specific combined state + local rate for accurate calculations — state rate alone is usually insufficient.
Understanding Sales Tax
🏛️ How Sales Tax Works
Collected by sellers at point of sale and remitted to state/local governments. Unlike VAT (which applies at each production stage), US sales tax applies only at the final consumer purchase. Businesses purchasing for resale provide resale certificates to buy tax-free.
📊 State Sales Tax Rates
No sales tax: Oregon, Montana, New Hampshire, Delaware, Alaska (no state tax, some local). Lowest: Hawaii 4%, Wisconsin 5%. Highest: California 7.25% base (up to 10.25% with local). Tennessee: 7% state + up to 2.75% local. Combined rates vary significantly by city.
🏙️ Local Sales Tax
Many cities and counties add their own sales tax on top of the state rate. New York City: 4.5% city + 4% state = 8.875% combined. Chicago: 10.25% combined. Los Angeles: up to 10.25% combined. Always check your specific location's combined rate.
💻 Online Sales Tax
Since the 2018 South Dakota v. Wayfair Supreme Court decision, online sellers must collect sales tax in states where they have 'economic nexus' (typically $100,000+ in sales or 200+ transactions). Online purchases are no longer automatically tax-free.
🏪 Exempt Items
Many states exempt certain items from sales tax: groceries (most states), prescription medications (all states), clothing under $110 per item (New York), agricultural equipment (most states). Tax holidays (back-to-school, hurricane preparedness) temporarily exempt specific items.
📋 Business Sales Tax
Businesses must collect and remit sales tax in every state where they have nexus (physical presence or economic nexus). Filing frequencies vary: monthly for high-volume sellers, quarterly or annually for smaller businesses. Non-compliance penalties can be severe.
Sales Tax for Businesses and Shoppers
Sales tax nexus for e-commerce
If you sell products online, you likely have sales tax obligations in multiple states due to economic nexus rules. Most states trigger nexus at $100,000 in sales or 200 transactions annually. Managing multi-state sales tax is complex — most e-commerce businesses use automated tax calculation software (TaxJar, Avalara, or Shopify Tax) rather than manual calculation. Manual errors in sales tax collection or remittance can result in significant back taxes and penalties.
Budgeting for sales tax
When budgeting for major purchases, always calculate the tax-inclusive price. A $2,000 appliance in Los Angeles (10.25% tax) actually costs $2,205. For furniture, electronics, and vehicles — where purchase prices are high — sales tax is a significant additional cost. Include it in comparisons: buying online from a tax-free state (if legally allowed) versus local purchase can save hundreds on large purchases.
Sales tax on services
Most states tax tangible goods but treatment of services varies widely. Some states tax all services, others only specific ones (repairs, digital downloads, SaaS). The expanding digital economy has created significant uncertainty — many states are still legislating how to tax streaming services, software subscriptions, and digital downloads. If you sell services, verify your state's specific rules.
🏪 Shopper tip: Sales tax is not negotiable and must be collected by law. However, the rate varies significantly by location. For large purchases, buying in a lower-tax city or county within the same state (or a different state if you are near a border) can provide meaningful savings. For online purchases, always verify whether the seller collects your state's sales tax or whether you owe 'use tax' on your state return.
Sales Tax Formula
Add tax: Tax = Price × Rate ÷ 100, Total = Price + Tax · Remove tax: Pre-tax Price = Total ÷ (1 + Rate ÷ 100)
Worked example
A $100 item at an 8.5% combined rate: Tax = $100 × 8.5 ÷ 100 = $8.50, Total = $108.50. Working backward from a $108.50 tax-inclusive total at the same 8.5% rate: Pre-tax Price = $108.50 ÷ 1.085 = $100.00.
Avoid These Mistakes
Using state rate only
The state rate alone usually understates what you'll actually pay. Local city/county tax is often added on top — use your full combined rate.
Confusing sales tax with VAT
US sales tax applies once, at the final sale. VAT (used in the EU/UK and elsewhere) is collected at every stage of production. Don't mix the two systems when comparing prices internationally.
Dividing instead of subtracting when removing tax
To back out tax from a total, divide by (1 + rate/100) — don't simply subtract the rate percentage from the total, which understates the pre-tax price.
Assuming all items are taxed the same
Groceries, medicine, and clothing are exempt or taxed differently in many states. Verify the category-specific rule for the item you're pricing.
Frequently Asked Questions
What is sales tax in the US?
US sales tax rates vary by state and locality. States range from 0% (Oregon, Montana, New Hampshire) to 7.25% (California). With local taxes added, combined rates can reach 10%+. Tennessee has the highest combined rate at ~9.5%.
How do I calculate sales tax?
Tax Amount = Price × Tax Rate / 100. Total = Price + Tax Amount. Example: $100 item at 8.5% tax = $8.50 tax = $108.50 total. To find the pre-tax price from a tax-inclusive amount: Pre-tax = Total / (1 + Rate/100).
What is the difference between sales tax and VAT?
Sales tax is collected only at the final point of sale to the consumer (US system). VAT (Value Added Tax) is collected at each stage of production and distribution (EU/UK system). The end consumer pays the same amount under both systems, but the collection mechanism differs.
Are some items tax-exempt?
Yes. Common exemptions: groceries (many US states), prescription medicines, children's clothing (some states), agricultural supplies. Exemptions vary significantly by state and country. Always check your specific jurisdiction's rules for the product category.
References
🏛️ State Department of Revenue
Each US state publishes its own current sales tax rate and rules. Search "[your state] Department of Revenue sales tax" for the authoritative current rate.
⚖️ South Dakota v. Wayfair (2018)
The US Supreme Court decision establishing economic nexus for online sellers — the legal basis for out-of-state sales tax collection referenced in this page's content.
📄 Local city/county tax office
Combined rates (state + local) are set locally and change periodically — confirm the current combined rate with your city or county before relying on any published figure, including this page.