Sales Tax Calculator

How to Add or Remove Sales Tax from a Price?

To add tax: multiply the pre-tax price by (1 + tax rate). A $49.99 item at 8.25% tax: $49.99 x 1.0825 = $54.12. To find the pre-tax price from a tax-inclusive total: divide by (1 + tax rate). A $54.12 receipt at 8.25%: $54.12 / 1.0825 = $49.99 before tax. The calculator above handles both directions - enter a price and tax rate, then choose whether to add tax or extract the pre-tax amount from a total that already includes tax.

US Sales Tax Rates by State

Five states have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. The highest combined state and local rates: Louisiana (up to 11.45%), Tennessee (9.548%), Arkansas (9.51%), Alabama (up to 11%), and Washington (10.25% in some cities). California has the highest state-level rate at 7.25% before local additions. Texas is 6.25% state plus up to 2% local. New York is 4% state but New York City adds 4.5% for a combined 8.875%. These combined rates significantly affect the true cost of purchases, especially large items like furniture, appliances, and electronics.

What Is Taxable and What Is Exempt?

Rules vary by state, but common patterns exist. Most states exempt unprepared grocery food (but tax candy, soft drinks, and prepared meals). Prescription medications are exempt in all states. Clothing is exempt in a few states (Pennsylvania, New Jersey, Minnesota) but taxed in most. Services (haircuts, repairs, professional services) are exempt in many states but increasingly being taxed as state budgets seek new revenue. Digital products (downloads, streaming subscriptions, software) are taxed in some states and exempt in others. When budgeting for a large purchase, verify the specific tax treatment in your state rather than assuming the general rate applies.

Online Shopping and Sales Tax After Wayfair

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 with sales tax now enforce this. Amazon, Walmart, and major online retailers collect state and local tax automatically at checkout. Smaller sellers on platforms like Etsy and eBay may also collect tax depending on the platform policies and state thresholds (typically $100,000 in sales or 200 transactions). The era of tax-free online shopping has effectively ended for most purchases from established retailers.

Sales Tax on Vehicles, Boats, and Large Purchases

Vehicle sales tax is particularly impactful due to the high purchase price. A $40,000 car in a state with 7% tax costs $2,800 in tax alone. Some states cap vehicle tax (Virginia caps at 4.15%, Oklahoma uses a flat 3.25% excise tax). Several states give credit for the trade-in value: if you trade in a $15,000 vehicle toward a $40,000 purchase, you pay tax on $25,000 instead of $40,000, saving $1,050 at 7%. Private party vehicle sales still require paying sales tax at registration in most states. Boats, RVs, and aircraft follow similar rules but may have different rates or caps depending on the state.

Use Tax: The Sales Tax You Owe but Probably Ignore

Use tax applies when you purchase an item in a state with no or lower sales tax and bring it to your home state. Technically, if you buy a $2,000 laptop in tax-free Oregon and use it at home in California, you owe California 7.25% use tax ($145). Most states include a use tax line on income tax returns. Enforcement on small consumer purchases is rare, but large purchases (vehicles, equipment, furniture) are actively tracked because registration and shipping records create a paper trail. Businesses face audit risk for unpaid use tax on equipment, supplies, and services purchased out of state.

Tax Holidays and How to Take Advantage

Over 20 states offer periodic sales tax holidays, typically in late summer before school starts. Texas holds an annual weekend exempting clothing under $100, backpacks under $100, and school supplies under $100 from the 6.25% state tax and all local taxes. Florida offers multiple holidays covering school supplies, disaster preparedness items, and recreational equipment. The savings range from $5-$15 per qualifying item, which adds up when outfitting a family for the school year. Some states also offer Energy Star appliance holidays exempting qualifying products from tax during a specific period.

Sales Tax for Small Business Owners

Businesses that sell taxable goods must register for a sales tax permit, collect tax from customers, file periodic returns (monthly, quarterly, or annually depending on volume), and remit the collected tax to the state. Failing to collect and remit sales tax creates personal liability for the business owner. Most states offer a small vendor discount (0.5-3% of collected tax) as compensation for acting as a tax collector. Nexus rules determine which states you must collect for: physical presence (office, warehouse, employees) or economic nexus (exceeding the state revenue/transaction threshold). Multi-state sellers must track varying rates, rules, and filing deadlines across every state where they have nexus.

Frequently asked questions