How to estimate sales tax
- Choose your state. The state rate and the average local rate load automatically from our 2026 table.
- Adjust the local rate. Local rates vary by city, county and district. If you know yours, type it in place of the average.
- Pick add or remove. Add tax to a pre-tax price, or take tax out of a total that includes it.
- Enter the amount. The result shows state tax, local tax and the total.
- Verify before invoicing. For anything you invoice or file, confirm the exact rate and whether the item is taxable using your state revenue department.
How US sales tax works
The United States has no national sales tax or VAT. Instead, states (and in most of them, counties, cities and special districts) set their own sales tax. The total you pay at the register is the state rate plus any local rates. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon, although Alaska allows local sales taxes.
Sales tax is usually charged on the sale of tangible goods to the final buyer. Many states also tax some services, and some states exempt items such as groceries, prescription medicine or clothing. Sellers collect the tax from buyers and pass it on to the state. Unlike VAT, there is no tax charged at each stage of the supply chain: sales to resellers are normally exempt, backed by a resale certificate.
Who has to collect sales tax
You generally have to collect sales tax in a state where you have nexus, a significant connection such as a store, employee, inventory or, in most states since the 2018 Supreme Court decision in South Dakota v. Wayfair, enough sales into that state (economic nexus). Many states use a threshold such as $100,000 in sales, but they differ and some have removed the transaction count. Because of this, online sellers can owe tax in several states.
Freelancers and consultants who sell services often have no sales tax to collect, as most states do not tax most services. Some do, including certain professional, repair, data or software services. Check your state’s department of revenue before assuming your invoice is tax-free.
Origin versus destination
Most states use destination-based sourcing: the rate depends on where the buyer receives the goods. A few use origin-based sourcing for in-state sales, which means the seller’s location sets the rate. This is why a single “average” rate is only an approximation.
State and average local sales tax rates (1 January 2026)
Source: Tax Foundation – State and Local Sales Tax Rates, 2026. The “average local” rate is a weighted average. The combined figure is simply the two added together and is only an estimate for a particular address. Rates change during the year; confirm yours with the state.
| State | State rate | Average local | Combined (est.) |
|---|---|---|---|
| Alabama | 4% | 5.46% | 9.46% |
| Alaska | 0% | 1.82% | 1.82% |
| Arizona | 5.6% | 2.92% | 8.52% |
| Arkansas | 6.5% | 2.96% | 9.46% |
| California | 7.25% | 1.74% | 8.99% |
| Colorado | 2.9% | 4.99% | 7.89% |
| Connecticut | 6.35% | 0% | 6.35% |
| Delaware | 0% | 0% | 0% |
| Florida | 6% | 0.98% | 6.98% |
| Georgia | 4% | 3.49% | 7.49% |
| Hawaii | 4% | 0.5% | 4.5% |
| Idaho | 6% | 0.03% | 6.03% |
| Illinois | 6.25% | 2.71% | 8.96% |
| Indiana | 7% | 0% | 7% |
| Iowa | 6% | 0.94% | 6.94% |
| Kansas | 6.5% | 2.19% | 8.69% |
| Kentucky | 6% | 0% | 6% |
| Louisiana | 5% | 5.11% | 10.11% |
| Maine | 5.5% | 0% | 5.5% |
| Maryland | 6% | 0% | 6% |
| Massachusetts | 6.25% | 0% | 6.25% |
| Michigan | 6% | 0% | 6% |
| Minnesota | 6.875% | 1.26% | 8.135% |
| Mississippi | 7% | 0.06% | 7.06% |
| Missouri | 4.225% | 4.22% | 8.445% |
| Montana | 0% | 0% | 0% |
| Nebraska | 5.5% | 1.48% | 6.98% |
| Nevada | 6.85% | 1.39% | 8.24% |
| New Hampshire | 0% | 0% | 0% |
| New Jersey | 6.625% | -0.02% | 6.605% |
| New Mexico | 4.875% | 2.79% | 7.665% |
| New York | 4% | 4.54% | 8.54% |
| North Carolina | 4.75% | 2.25% | 7% |
| North Dakota | 5% | 2.09% | 7.09% |
| Ohio | 5.75% | 1.54% | 7.29% |
| Oklahoma | 4.5% | 4.56% | 9.06% |
| Oregon | 0% | 0% | 0% |
| Pennsylvania | 6% | 0.34% | 6.34% |
| Rhode Island | 7% | 0% | 7% |
| South Carolina | 6% | 1.49% | 7.49% |
| South Dakota | 4.2% | 1.91% | 6.11% |
| Tennessee | 7% | 2.61% | 9.61% |
| Texas | 6.25% | 1.95% | 8.2% |
| Utah | 6.1% | 1.32% | 7.42% |
| Vermont | 6% | 0.39% | 6.39% |
| Virginia | 5.3% | 0.47% | 5.77% |
| Washington | 6.5% | 3.01% | 9.51% |
| West Virginia | 6% | 0.59% | 6.59% |
| Wisconsin | 5% | 0.72% | 5.72% |
| Wyoming | 4% | 1.56% | 5.56% |
| District of Columbia | 6% | 0% | 6% |
Worked examples
| Case | Calculation | Result |
|---|---|---|
| $200 purchase, 8.25% combined rate | 200 × 8.25% | Tax $16.50, total $216.50 |
| $1,080 total including 8% tax | 1,080 ÷ 1.08 | Pre-tax $1,000.00, tax $80.00 |
| $500 in a state with 6.25% state and 2% local tax | 500 × 8.25% | State $31.25, local $10.00, total $541.25 |
| $90 in Oregon | No state sales tax | Total $90.00 |
When you work back from a total, remember that tax is a share of the pre-tax price, so you divide by one plus the rate, not subtract the rate.
Putting sales tax on an invoice
On a US invoice, show the pre-tax subtotal, the sales tax line with the rate you used, and the total. If you are exempt from collecting tax or the customer holds a resale or exemption certificate, say so on the invoice and keep a copy of the certificate. The US invoice generator has a state-by-state rate list and a field for a tax ID. The guide to sales tax on US invoices explains the practical rules in more depth.
- Is the item or service taxable in the buyer’s state?
- Do you have nexus in that state, or have you registered to collect?
- Have you used the destination rate, including local taxes?
- If the customer is exempt, do you hold a valid certificate?
- Does the invoice show tax as a separate line?
Mistakes to avoid
- Using the state rate alone. Local taxes can add several points.
- Collecting tax without a permit. Most states require you to register before you charge it.
- Assuming services are tax-free. Some are taxable.
- Not tracking where customers are. Remote sales can create obligations in several states.
- Ignoring rate changes. Rates and boundaries change, often at quarter start.
Glossary
- Nexus
- A connection to a state that creates a duty to collect its sales tax.
- Economic nexus
- Nexus created by sales volume into a state, even without a physical presence.
- Use tax
- Tax a buyer owes on items bought without sales tax and used in the state.
- Resale certificate
- A document that lets a buyer purchase goods for resale tax-free.
- Destination-based
- Tax is set by the buyer’s location.
- Origin-based
- Tax is set by the seller’s location.
- State and average local rates are as published by the Tax Foundation for 1 January 2026 and are approximate. Always verify the exact rate and taxability with your state department of revenue.
Frequently asked questions
How do I calculate sales tax?
Which states have no sales tax?
Why is the rate in the calculator only approximate?
Do I charge sales tax on services?
What is economic nexus?
What is a resale certificate?
Does sales tax apply to shipping?
How often do sales tax rates change?
Is sales tax the same as VAT?
Is this tax advice?
Related topics
- sales tax calculator
- sales tax by state
- US sales tax 2026
- combined sales tax rate
- local sales tax
- economic nexus
- resale certificate
- remove sales tax
- add sales tax
- state tax rates
- tax on services
- Wayfair