How to Calculate US Sales Tax

Sales tax is a consumption tax imposed by state and local governments on the sale of goods and services. The calculation involves multiplying the purchase price by the applicable tax rate.

Example: If you purchase an item for $100 in California (7.25% state tax + 2% local tax = 9.25% combined):

Sales Tax = $100 × (9.25 ÷ 100) = $9.25

Total Price = $100 + $9.25 = $109.25

Understanding US Sales Tax Rates

State vs. Local Sales Tax

The United States has a complex sales tax system with two primary components:

State Sales Tax: Imposed by state governments, ranging from 0% (in states like Alaska, Delaware, Montana, New Hampshire, and Oregon) to 7.25% (California). As of 2025, Louisiana has increased its state rate to 5.00%.

Local Sales Tax: Additional taxes levied by counties, cities, and special districts. Local rates can significantly increase the total tax burden. For example, California's combined rate can reach up to 16.75% in certain localities.

Recent 2025 Updates

Louisiana: State sales tax rate increased from 4.45% to 5.00%, and sales tax now applies to digital products including audiovisual works, audio works, books, codes, applications, games, and periodicals.

Kansas: State sales tax on unprepared food reduced from 2% to 0%, though local taxes may still apply.

Nevada: Diapers for both adults and children are now exempt from sales and use tax.

Illinois: Out-of-state sellers with physical presence in Illinois now required to use destination sourcing when shipping goods from outside Illinois.

Alaska: The state eliminated its 200-transaction economic nexus threshold for remote sellers.

State Sales Tax Rates Reference Table (2025)

Below is a comprehensive table showing state sales tax rates, local tax ranges, and combined maximum rates for all US states and Washington D.C.

Frequently Asked Questions (FAQ)