Sales Tax Calculator

This calculator works in both directions. Enter a pre-tax price to see what it costs at the register, or enter the total you paid to work backward to the price and the tax inside it. Pick your state and it fills in the general rate; the table further down lists every state alongside the maximum rate once local and city tax is added, which is often the number that actually applies.

What sales tax is

Sales tax is a consumption tax charged on the sale of certain goods and services, collected by the seller at the point of purchase and passed to the government. It is paid by the buyer but administered by the vendor, which is why the amount appears as a separate line on the receipt rather than in the shelf price.

Most countries outside the U.S. use a different form of consumption tax, either value-added tax or goods and services tax. The presentation differs too. In the U.S., listed prices are almost always pre-tax and the tax is added at checkout. In much of Europe and Asia, the displayed price is the final amount including tax, which is why a $10 item in Texas costs $10.83 and a €10 item in Germany costs €10.

Sales tax in the United States

There is no federal sales tax. Every state sets its own, and five have none at all: Alaska, Delaware, Montana, New Hampshire, and Oregon. The rest, along with the District of Columbia, Puerto Rico, and Guam, charge a statewide rate that counties and cities can add to.

Rates run from 0% to roughly 16% depending on where you are and what you are buying, and the rules differ as much as the rates. Texas exempts prescription medicine and food seeds. Vermont charges 6% generally but adds 10% on alcoholic drinks consumed on the premises. Alaska has no statewide tax yet local rates reach 7%, and Colorado's 2.9% state rate can climb to 10% once local tax stacks on top.

One structural difference from VAT is worth knowing: U.S. sales tax applies only at retail. Transactions between businesses buying goods for resale are generally exempt, so the tax is charged once at the end of the chain rather than at every stage.

Sales tax costs the average American around 2% of personal income and supplies close to a third of state government revenue, second only to income tax. Reliance varies enormously. Florida, Washington, Tennessee, and Texas each raise more than half their tax revenue this way, and several approach 60%, which is unsurprising given none of them levies a broad personal income tax. New York, by contrast, raises about 20% from sales tax. Broadly, southern and western states lean on it far more than New England and the industrial Midwest.

A short history

Sales tax has an awkward place in American history. In the eighteenth century the British Crown imposed duties on goods sold to colonists who had no representation in Parliament, a grievance that produced the Boston Tea Party and fed into the Revolution. The country's founding was partly an argument about consumption taxes, which may explain why a federal one has never been enacted.

State sales tax only took hold during the Great Depression, when property and income revenues collapsed and governments needed something that still produced money. Mississippi introduced the first modern version in 1930, and it spread quickly because the economics of the period revolved around moving goods. Within a decade most states had followed, and the tax has been a fixture of state finance ever since.

Deducting sales tax

Sales tax is deductible on a federal return only if you itemise rather than take the standard deduction, and most Americans take the standard deduction. Itemising also means keeping a year of receipts, since the IRS expects documentation.

Those who do itemise face a second choice: deduct state and local income tax, or sales tax, but not both. Income tax usually produces the larger figure, so it usually wins. Sales tax can come out ahead in a year with unusually large purchases, such as a car, a wedding, a boat, or a run of major appliances, particularly for someone living in a state with no income tax. Even so, fewer than 2% of filers claim it. Our Income Tax Calculator covers the wider return.

Value-added tax

VAT is the model used by more than 160 countries. Rather than charging once at retail, it applies at every stage where value is added, so wholesalers, manufacturers, distributors, and retailers all pay it and reclaim what they were charged upstream. Each business effectively pays tax only on the value it added, calculated as the sale price less the already-taxed cost of inputs.

A 1979 Tax Foundation study set out the trade-offs, and they still hold. VAT is harder to evade, because every link in the chain has a paper trail and an incentive to document its own costs. It raises more revenue at a given rate than a retail sales tax, and it creates pressure to control costs throughout the supply chain.

The drawbacks are real too. VAT is regressive, taking a larger share of income from those who earn less, since lower earners spend a greater proportion of what they make. Cascading effects can penalise new and marginal businesses, feed inflation, and disadvantage exporters, which is why most VAT systems zero-rate exports. Our VAT Calculator handles that arithmetic.

Goods and services tax works on the same principle under a different name. Spain, Greece, India, Canada, Singapore, and Malaysia all use the GST label, though implementations vary so widely that neither term describes a single system.

What gets taxed and what does not

Exemptions are where most of the state-by-state complexity lives. Groceries are the biggest: many states exempt unprepared food entirely, some tax it at a reduced rate, and a handful tax it in full. The line between exempt groceries and taxable prepared food is a recurring source of dispute, and rotisserie chicken has been litigated more than once.

Prescription drugs are exempt almost everywhere; over-the-counter medicines usually are not. Clothing is exempt in Pennsylvania, Minnesota, and New Jersey, and taxed in most other places, sometimes only below a price threshold. Several states also run annual sales tax holidays, typically before the school year, suspending tax on clothing, school supplies, and occasionally computers for a weekend.

Services are the growing frontier. Sales tax was designed for goods, so services were historically untaxed, but as economies shifted many states extended it to categories such as repairs, landscaping, and digital subscriptions. Whether your streaming service is taxable depends entirely on your state.

Online purchases and use tax

Before 2018, retailers only had to collect sales tax in states where they had a physical presence, which is why online shopping often arrived tax-free. That ended with the Supreme Court's decision in South Dakota v. Wayfair, which allowed states to require collection based on economic activity alone, typically a threshold of sales or transactions into that state. Most large online sellers now collect tax everywhere it applies.

Where a seller does not collect, the obligation does not disappear. It becomes use tax, owed by the buyer at the same rate and usually reported on the state income tax return. Compliance among individuals is famously low, but the liability is genuine, and it applies to the classic case of driving to a no-tax state to make a large purchase and bringing it home.

How this calculator works

Adding tax multiplies the pre-tax price by one plus the rate. Removing it divides the total by one plus the rate, which is the step people most often get wrong: subtracting 8% from a tax-inclusive total does not recover the original price. On a $108 total at 8%, the pre-tax price is $108 ÷ 1.08 = $100, not $99.36.

Choosing a state loads its general rate, and you can override it with the exact combined rate for your address, which is what the table's maximum column is there to warn you about. To work out a discounted price before tax is applied, use our Discount Calculator.