Sales tax is a part of nearly every purchase we make, yet the exact rate can be a moving target, changing from one city or county to the next. This tax, levied on the sale of goods and services, is a primary source of revenue for state and local governments. Our Sales Tax Calculator is a simple and essential tool for consumers and business owners alike. It allows you to quickly calculate the total tax on a purchase and see the final, out-the-door price, helping you budget accurately and understand the true cost of your purchases.
How to Use the Sales Tax Calculator
Calculating the total tax and final price of an item is incredibly easy:
- Enter the Pre-tax Amount: Input the price of the item or service before any taxes are applied.
- Enter the Tax Rate: Input the combined state and local sales tax rate for your area as a percentage.
- Calculate Your Total: Click the "Calculate" button to see the sales tax amount and the final, total price you will pay.
How Sales Tax Works in the United States
Unlike many countries that have a single, national value-added tax (VAT), the United States has a decentralized sales tax system. There is no federal sales tax. Instead, sales taxes are governed at the state, county, and city level.
State and Local Sales Taxes
Most states have a statewide sales tax that serves as a baseline rate. On top of this, many counties, cities, and special districts (like for transportation or public transit) are permitted to levy their own local sales taxes. The rate you pay at the register is the combination of all these applicable rates.
This is why the sales tax rate can be different in neighboring towns. For example, the state rate might be 6%, but a specific city might have a 1% county tax and a 0.5% city tax, making the total rate you pay 7.5%. This is the number you should enter into the calculator for an accurate result.
What is Generally Taxable?
Sales tax is typically applied to the retail sale of tangible personal property—basically, any physical good you can buy. However, what is considered "taxable" can vary significantly from state to state.
- Goods: Almost all physical goods, like clothing, electronics, furniture, and cars, are taxable in states with a sales tax.
- Services: The taxation of services is much more varied. Some states tax very few services, while others tax a wide range, such as repair labor, landscaping, or digital streaming services.
- Food: Most states exempt basic groceries from sales tax, but prepared foods (like restaurant meals) and certain items like candy and soda are usually taxable.
- Clothing: A few states, like Pennsylvania and Minnesota, have exemptions for most clothing items.
Online Purchases and "Use Tax"
For decades, shoppers could often avoid sales tax by buying from online or mail-order retailers located in other states. However, a 2018 Supreme Court decision (South Dakota v. Wayfair, Inc.) changed this landscape. Now, states can require out-of-state sellers to collect sales tax on purchases made by their residents. As a result, nearly all major online retailers now collect and remit sales tax based on the buyer's shipping address.
If you purchase an item from an out-of-state seller who does *not* collect sales tax, you are technically required to pay a use tax directly to your state. A use tax is a companion to the sales tax, designed to ensure that all purchases are treated equally, whether bought locally or from afar. The use tax rate is the same as your local sales tax rate, and it is typically reported and paid on your annual state income tax return.
Frequently Asked Questions About Sales Tax
How can I find the correct sales tax rate for my area?
The most accurate way to find the specific combined sales tax rate for your location is to check the website for your state's Department of Revenue or Department of Taxation. They often have online lookup tools where you can search by city, county, or zip code.
Is sales tax calculated before or after a discount?
Sales tax is always calculated on the final selling price of an item *after* any discounts or coupons have been applied. If a $100 item has a 20% discount, the new price is $80, and the sales tax is calculated on that $80, not the original $100.
Which states have no sales tax?
There are five states that do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. (Note: Alaska allows localities to charge local sales taxes).
Are services like haircuts or car repairs taxable?
This depends entirely on your state's laws. In most states, professional services like legal advice or medical care are not taxed. For other services like a haircut or the labor portion of a car repair, the rules vary widely. You must check your specific state's regulations.