Which US states don't have a sales tax?
Five states have no statewide sales tax: New Hampshire, Oregon, Montana, Alaska, and Delaware (the NOMAD states). Alaska and Montana allow local sales taxes in some jurisdictions, so a purchase there is not always fully tax-free. New Hampshire still taxes restaurant meals and car rentals at 9%.
How do I extract sales tax from a tax-inclusive total?
Divide the total by (1 + rate/100). For a $107.99 receipt at 8.25%, pre-tax = $107.99 / 1.0825 ≈ $99.76, and the tax is $107.99 − $99.76 = $8.23. Reverse mode in the calculator does this for you. Do not subtract 'rate × total' — that overstates the tax because the rate is applied to the smaller pre-tax base.
Is online sales tax different from in-store sales tax?
The rate is the same, but who collects and how depends on the 2018 Supreme Court ruling in South Dakota v. Wayfair. States can now require online sellers above an economic-nexus threshold (typically $100,000 in sales or 200 transactions) to collect sales tax based on the buyer's shipping address. Most large retailers collect in every state with a sales tax.
Is sales tax based on the shipping address or the seller's location?
Most US states use destination-based sourcing — the rate is the combined state-plus-local rate at the buyer's shipping address. A handful of states (Arizona, California, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, and Virginia) use origin-based sourcing for in-state sales, where the seller's location sets the rate.
Are services subject to sales tax?
It depends on the state and the service. Most states tax tangible goods by default and exempt most services, taxing only specific ones like vehicle repair, telecom, or hotel stays. Hawaii, New Mexico, South Dakota, and West Virginia tax most services broadly. Check your state Department of Revenue page for a current taxable-services list.
What is the difference between sales tax and use tax?
Sales tax is collected by the seller at the point of sale and remitted to the state. Use tax is the same rate, but you pay it directly to your state when a seller didn't collect sales tax — typically on out-of-state or online purchases, or on items brought back from a tax-free state. Most state income tax returns include a line to report and pay use tax.
Why do different stores in the same city sometimes charge different sales tax rates?
Special taxing districts, like transit authorities, stadium financing zones, or tourism improvement districts, can add a small additional percentage in a defined area. Two stores a few blocks apart can fall on different sides of a district boundary, giving them slightly different combined rates.
Do I get the sales tax back when I return an item?
Yes, in nearly all cases. When you return an item for a full refund, the merchant refunds the sales tax with the purchase price. If you exchange for a different-priced item, the merchant adjusts the tax up or down based on the new price. Keep receipts to make sure the tax line is properly credited.
What is the highest combined sales tax rate in the United States?
Combined state-and-local rates exceed 11% in several jurisdictions. The Tax Foundation regularly cites localities in Louisiana, Arkansas, Alabama, Tennessee, and Washington as the highest, with peak combined rates around 11.5%–12.5% in specific cities. California has the highest state base rate at 7.25%, but its average combined rate is lower than Tennessee's.
Are groceries and prescriptions taxed?
Most states exempt unprepared groceries from sales tax or tax them at a reduced rate (for example, Mississippi and Alabama). Prepared foods, candy, and soft drinks are generally taxed at the full rate. All US states with sales tax exempt prescription medications; over-the-counter drugs are usually exempt but taxed in a few states.
