How to calculate sales tax
Adding tax: multiply the price by the tax rate. $100 at 8.25% = $8.25 tax, for a total of $108.25.
Removing tax: divide the total by (1 + rate). $108.25 ÷ 1.0825 = $100.00 before tax. Don’t simply subtract 8.25% of the total — that gives the wrong answer.
How US sales tax works
There’s no national sales tax in the US. Each state sets its own rate, and most allow counties, cities and special districts to add local taxes on top — so combined rates can range from 0% to over 10%. Five states have no statewide sales tax: Alaska (though some cities charge local tax), Delaware, Montana, New Hampshire and Oregon.
What’s taxed also varies: many states exempt or reduce tax on groceries and prescription drugs, and clothing is exempt in a few states. Some hold sales-tax holidays for back-to-school shopping.
Highest state base rates
| State | State rate |
|---|---|
| California | 7.25% |
| Indiana, Mississippi, Rhode Island, Tennessee | 7% |
| Minnesota | 6.875% |
| Nevada | 6.85% |
| New Jersey | 6.625% |
Local add-ons mean the highest combined rates are often in Louisiana, Tennessee, Arkansas, Washington and Alabama.
Sales tax vs VAT
US sales tax is added at the register and isn’t included in shelf prices. In the UK, EU, Australia and Canada (GST/HST), prices usually include VAT or GST — use the VAT calculator for those. Shopping a sale? Combine with the discount calculator; tax is normally charged on the discounted price.
Frequently asked questions
How do I calculate sales tax?
Multiply the price by the tax rate (as a decimal) and add it to the price.
How do I find the price before tax?
Divide the total by 1 plus the tax rate — for 8% tax, divide by 1.08.
Which states have no sales tax?
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax.
Why is my local rate higher than the state rate?
Counties, cities and special districts add their own taxes on top of the state rate.