Short answer: the United States has no national sales tax. Each state decides whether to charge one, at what rate, and what is taxable, and cities and counties can add their own tax on top. Five states charge no statewide sales tax at all, while the average combined state-and-local rate nationwide is 7.53% (Tax Foundation, midyear 2026). What you actually pay depends on where the purchase is delivered, not where the seller is located.
How sales tax works
Sales tax is a consumption tax collected by the seller at the point of sale and passed on to the state (and local) government. It applies mainly to retail sales of tangible goods — things you can touch, like clothing, electronics, and furniture — and, in some states, to certain services and digital goods.
Three features make it confusing:
- It is layered. Your total rate is usually the state rate plus any county, city, and special-district rates. That is why the rate can change just by crossing a city line.
- It is destination-based. For online orders, the tax is generally based on where the item is delivered, not where the store is headquartered. After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, nearly every state with a sales tax began requiring online retailers to collect it.
- It is not uniform in what it covers. Every state writes its own list of exemptions, so the same item can be taxable in one state and tax-free in another.
The five states with no statewide sales tax
Five states levy no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. There are caveats worth knowing before you plan a shopping trip:
- Alaska has no state rate, but local governments can impose their own, averaging about 1.82% statewide.
- Montana has no general local sales tax, though some resort towns charge a small local option tax.
- New Hampshire has no general sales tax but does tax restaurant meals, hotel rooms, and rental cars.
2026 rates: highest, lowest, and average
According to the Tax Foundation’s midyear 2026 figures (rates as of July 1, 2026), no state raised its base sales tax rate between January and July 2026. The key numbers:
- Highest state base rate: California, at 7.25%.
- Lowest nonzero state base rate: Colorado, at 2.90%.
- Highest average combined rate: Louisiana, at 10.13%, followed by Tennessee (9.61%), Washington (9.57%), Arkansas (9.48%), and Alabama (9.46%).
- Lowest combined rates: the five no-state-tax states, plus Hawaii, Wyoming, Wisconsin, and Maine among states that do levy a tax.
- National average: 7.53% combined, weighted by population.
Individual cities can run higher: New York City is 8.875% and Los Angeles reaches 10.25%.
What’s taxable — and what’s exempt
Groceries. Most states exempt unprepared food — raw ingredients, produce, dairy, and meat bought for home cooking. A small number of states still tax groceries, some at a reduced rate, and the list has been shrinking as states phase grocery taxes out. Prepared food from a restaurant or deli counter is almost always taxable, even in states that exempt groceries.
Prescription medications. Prescription drugs are exempt from sales tax in nearly every state that collects sales tax.
Clothing. Clothing is fully taxable in most states, but a handful of states exempt it — Pennsylvania, New Jersey, and Minnesota exempt most clothing outright, and New York exempts clothing items under $110 each.
Services and digital goods. Most states do not tax professional services like legal or accounting work, but many do tax digital products such as streaming subscriptions and downloaded software. The rules here are changing fast, so check your state’s revenue department for the current list.
Sales tax holidays. Close to two dozen states run temporary sales tax holidays each year, usually a weekend in late summer aimed at back-to-school shopping. During the window, categories like clothing and school supplies are exempt up to a per-item price cap.
Worked example: the same $500 laptop in three states
Sales tax is simply the price multiplied by the combined rate:
- Portland, Oregon: $500 × 0% = $0.00 tax. Total: $500.00.
- Louisiana (state average): $500 × 10.13% = $50.65 tax. Total: $550.65.
- New York City: $500 × 8.875% = $44.38 tax. Total: $544.38.
That $50.65 gap between Oregon and Louisiana is the same laptop, the same seller, and the same price — only the delivery address differs. To work backward from a tax-inclusive total to the pre-tax price, use our reverse sales tax calculator; our guide to how the reverse calculation works explains the formula.
How to find your exact rate
State averages are useful for comparison, but your actual rate depends on your exact address, because local add-ons vary by city and county. Before a big purchase, check your state revenue department’s rate lookup tool, or look at a recent receipt from a local store. Rates change, often on January 1 or July 1, so a figure from last year may already be out of date. For federal tax questions, the IRS is the authoritative source.
Frequently asked questions
Which states have no sales tax?
Alaska, Delaware, Montana, New Hampshire, and Oregon charge no statewide sales tax. Alaska is the partial exception: local governments there can impose their own sales taxes, so some Alaskan communities do have a local rate. New Hampshire also taxes restaurant meals, hotel rooms, and rental cars even though it has no general sales tax.
What is the average sales tax rate in the US?
The population-weighted average combined state-and-local sales tax rate is 7.53%, according to the Tax Foundation’s midyear 2026 figures. That average hides wide variation: combined rates range from 0% in parts of Oregon and Delaware to over 10% in parts of Louisiana and California.
Is sales tax charged on online purchases?
Yes, in nearly every state with a sales tax. Since the Supreme Court’s 2018 Wayfair decision, states can require out-of-state sellers to collect sales tax, and most do. The rate is based on where the item is delivered, so an order shipped to Louisiana is taxed at Louisiana’s rate even if the seller is in Oregon.
Are groceries taxed?
In most states, unprepared groceries are exempt or taxed at a reduced rate. Only a small number of states still tax groceries at the full state rate, and several have phased their grocery taxes out in recent years. Prepared food, such as restaurant meals and deli items, is taxable in almost every state.