How to Calculate Sales Tax
Sales tax is a percentage added to the price of goods and services at the point of sale. In the United States, sales tax is set at the state level and often augmented by local (city and county) taxes. The combined rate can range from 0% (in states with no sales tax) to over 10% in some localities. To calculate sales tax, simply multiply the price by the tax rate.
- 1Sales tax: $100.00 x 8.25% = $8.25
- 2Total price: $100.00 + $8.25 = $108.25
- 3Reverse: If total is $108.25, the pre-tax price is $108.25 / 1.0825 = $100.00
State Sales Tax Rates (2026)
| State | State Rate | Avg Local Rate | Combined Rate |
|---|---|---|---|
| Louisiana | 4.45% | 5.10% | 9.55% |
| Tennessee | 7.00% | 2.55% | 9.55% |
| Arkansas | 6.50% | 2.97% | 9.47% |
| Washington | 6.50% | 2.70% | 9.20% |
| Alabama | 4.00% | 5.14% | 9.14% |
| California | 7.25% | 1.60% | 8.85% |
| Texas | 6.25% | 1.95% | 8.20% |
| New York | 4.00% | 4.52% | 8.52% |
| Oregon | 0% | 0% | 0% |
| Montana | 0% | 0% | 0% |
| Delaware | 0% | 0% | 0% |
| New Hampshire | 0% | 0% | 0% |
| Alaska* | 0% | 1.76% | 1.76% |
Five states have no state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local municipalities to charge sales tax (averaging 1.76%). Hawaii has a 4% general excise tax instead of a traditional sales tax. The highest combined rates are found in Tennessee, Louisiana, and Arkansas.
Sales Tax on Common Purchases
| Item | Price | Tax | Total |
|---|---|---|---|
| Groceries* | $150.00 | $0 (exempt) | $150.00 |
| Clothing* | $75.00 | $6.19 | $81.19 |
| Electronics | $500.00 | $41.25 | $541.25 |
| Furniture | $1,200.00 | $99.00 | $1,299.00 |
| New Car | $35,000 | $2,887.50 | $37,887.50 |
| Restaurant Meal | $50.00 | $4.13 | $54.13 |
Many states exempt groceries, prescription drugs, and clothing from sales tax. For example, Texas exempts groceries but taxes clothing. New York exempts clothing under $110 per item. Pennsylvania exempts most clothing and all groceries. Always check your state's specific exemptions.
Reverse Sales Tax Calculation
To find the pre-tax price from a total that includes tax, divide the total by (1 + tax rate). For example, if you paid $108.25 total and the tax rate is 8.25%: $108.25 / 1.0825 = $100.00 pre-tax. This is useful when you see a receipt total and want to verify the tax was calculated correctly.
Online Sales Tax Rules (2026)
Since the 2018 Supreme Court ruling in South Dakota v. Wayfair, states can require online retailers to collect sales tax even without a physical presence in the state. Nearly all states now enforce online sales tax collection. If a retailer does not collect tax, you may owe use tax on your state income tax return. Amazon, Walmart, and most major retailers now collect sales tax for all applicable states.
