What is the Sales Tax?
US sales tax is levied by states and often additionally by counties and cities, so the combined rate varies enormously — from 0% in Delaware, Montana, New Hampshire and Oregon to over 10% in parts of Louisiana and Alabama, where county and city taxes stack on top of the state rate.
Unlike VAT, sales tax is charged only at the final retail sale, and prices are advertised excluding it — which is why the total at checkout always surprises visitors.
Formula & worked example
Tax = Price × combined rate
Total = Price + tax
Worked example: a $250 purchase with 6.25% state and 2.25% local tax gives a combined 8.5%. Tax is $21.25, so the total at checkout is $271.25. Working backwards from a $271.25 total, divide by 1.085 to recover the $250 price.
How to use this sales tax calculator
- Enter the shelf price before tax.
- Enter your state rate, then any county or city rate.
- Rates can differ street by street — check your exact address for precision.
- Switch direction to extract tax from a receipt total.
Smart tips
- Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon (Alaska allows local taxes).
- Many states exempt groceries, prescription drugs and sometimes clothing from sales tax.
- Online purchases are taxed at the destination address, not the seller's location, since the Wayfair ruling.
- Sales tax holidays around back-to-school season can waive tax on clothing and school supplies entirely.
- Businesses buying for resale can present a resale certificate and pay no sales tax.
Frequently asked questions
Which states have no sales tax?
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, though Alaska permits local sales taxes.
How do I calculate sales tax backwards?
Divide the total by (1 + combined rate/100). At 8.5%, divide by 1.085 to recover the pre-tax price.
Is sales tax charged on online purchases?
Yes. Since the 2018 Wayfair decision, sellers must collect tax based on the buyer's location once they exceed state thresholds.
What is the difference between sales tax and VAT?
Sales tax is charged once at final retail sale. VAT is charged at each stage of production with businesses reclaiming input tax.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 8 Sep 2026. How we check these numbers.