Sales Tax Calculator

Sales tax rates vary significantly across the United States, ranging from zero in states like Alaska, Delaware, Montana, New Hampshire, and Oregon to over 9% in some locations when state, county, and city taxes combine. Each state sets its own base sales tax rate, and local jurisdictions often add their own taxes on top. This means the rate you pay depends on exactly where you make your purchase or where items are shipped.

Some states also have different rates for different types of products. Groceries might be taxed at a lower rate or exempt entirely, while prepared foods face full taxation. Clothing, prescription medications, and certain necessities receive special treatment in some states. When shopping online, retailers are now required to collect sales tax based on the destination address in most cases, following the Supreme Court's South Dakota v. Wayfair decision.

Sales tax is typically calculated after discounts are applied, not on the original price. This means if you have a $100 item with a 20% discount and 8% sales tax, you pay tax on $80, not $100. The calculator handles this automatically, showing you the discounted subtotal before tax, the tax amount, and your final total. This reflects how most retailers process transactions.

Percentage discounts work best for proportional savings like "20% off entire purchase," while fixed-amount discounts represent coupons like "$10 off." The calculator lets you switch between these types to match whatever promotion you are using. Keep in mind that some retailers apply sales tax before discounts in certain situations, though this is less common. If you notice discrepancies between the calculator and a store receipt, check whether they calculate tax before or after discounts.

Online purchases often include shipping, handling, or processing fees that are added after sales tax calculations. Some states tax shipping charges, while others do not. The calculator includes an optional field for these additional fees so you can see your complete out-of-pocket cost. This is particularly useful when comparing prices between different retailers or deciding whether free shipping offers actually save you money.

When budgeting for major purchases like electronics, furniture, or appliances, these fees can add up quickly. A $1,000 television might actually cost $1,100 after tax and shipping. Using the calculator before you commit to a purchase helps avoid sticker shock at checkout and ensures you have enough funds available. For business expenses, accurate total cost calculations are important for bookkeeping and reimbursement purposes.

Shoppers can save money by being strategic about where and when they make purchases. Some states have sales tax holidays for back-to-school shopping, hurricane preparedness, or energy-efficient appliances. During these periods, you pay no sales tax on qualifying items, which can mean significant savings on big-ticket purchases. If you live near a state border, comparing total costs including sales tax might reveal that driving to the neighboring state saves money.

Business owners need to understand sales tax obligations in every state where they have nexus, which now includes economic nexus through online sales. Calculating the correct sales tax and displaying it clearly to customers prevents confusion and ensures compliance. The effective tax rate shown in the calculator helps you understand what percentage of your final sale price goes to taxes, which is useful for pricing decisions and profit margin calculations.

When selling products, consider whether to display prices including tax or adding it at checkout. While adding tax at checkout is standard in the US, showing tax-inclusive pricing can make prices seem more transparent to customers. Some point-of-sale systems handle this automatically, but understanding the math helps you set up your system correctly and verify that transactions are processed accurately.

Certain purchases and buyers qualify for sales tax exemptions. Nonprofit organizations often have tax-exempt status, as do purchases for resale by registered businesses. If you qualify for an exemption, you need to provide appropriate documentation to the seller before or at the time of purchase. The calculator can still help you understand the regular cost, which is useful when comparing exempt versus non-exempt purchases.

Some items are never subject to sales tax regardless of buyer status. Most states exempt prescription medications, and many exempt groceries, though definitions of "groceries" vary. Prepared food from restaurants typically faces full taxation, while ingredients for home cooking might be exempt. Understanding these rules helps you budget more accurately and take advantage of tax-free purchasing opportunities when they apply to your situation.