To calculate sales tax, multiply the pre-tax price by the tax rate. For a $250 item with 8% sales tax: $250 × 0.08 = $20 tax. Total price: $270. To remove tax from a tax-inclusive price: divide by (1 + tax rate): $270 ÷ 1.08 = $250. US combined rates range from 0% in five states to over 10% in some localities.
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What Is Sales Tax?
Sales tax is a consumption tax collected by retailers at the point of sale and remitted to state and local governments. In the United States, it is not a federal tax — each state sets its own rate, and counties and cities may add their own on top. This is why the combined rate varies so much across the country, from 0% in Oregon, Montana, New Hampshire, Delaware, and Alaska (at the state level) to over 10% in certain Louisiana and Tennessee localities.
When you buy a taxable item, the retailer adds the tax to your purchase price and collects it on behalf of the government. The tax is based on the pre-tax (before-tax) price of the item. Some categories are exempt in many states — groceries, prescription drugs, and certain clothing items often carry reduced rates or no tax at all, depending on the state.
There are two common calculations you need: adding tax to a known pre-tax price (the most common scenario when shopping) and removing tax from a tax-inclusive price (useful when you have a receipt total and want to know what the pre-tax amount was). Both are straightforward with the right formula.
Understanding your local rate helps you budget accurately before shopping, compare pricing across state lines, verify receipts, and estimate total costs when planning large purchases like furniture, electronics, or vehicles where sales tax can add hundreds of dollars.
How to Use the Sales Tax Calculator
Add tax to a price:
- Enter the pre-tax price.
- Enter the tax rate (combined state + local rate). The calculator includes a built-in US state rate lookup.
- Read: tax amount in dollars, total price, and effective tax rate.
Remove tax from an inclusive price (reverse sales tax):
- Enter the price that already includes tax.
- Enter the tax rate.
- Read: pre-tax price and tax amount.
Sales tax for multiple items: Add each item and quantity. The calculator computes subtotal, total tax, and grand total — useful for estimating a shopping cart total before checkout.
The Sales Tax Formula
Adding tax:
Tax Amount = Pre-Tax Price × Tax Rate
Total Price = Pre-Tax Price × (1 + Tax Rate)
Removing tax (reverse calculation):
Pre-Tax Price = Total Price / (1 + Tax Rate)
Tax Amount = Total Price − Pre-Tax Price
Worked examples:
| Pre-Tax Price | Tax Rate | Tax Amount | Total | |--------------|----------|-----------|-------| | $45.00 | 7% | $3.15 | $48.15 | | $199.99 | 9.25% | $18.50 | $218.49 | | $1,000.00 | 10% | $100.00 | $1,100.00 | | $12.50 | 6.5% | $0.81 | $13.31 |
Reverse example: You paid $108.50 for an item in a state with 8.5% sales tax. What was the pre-tax price?
Pre-Tax = $108.50 / (1 + 0.085) = $108.50 / 1.085 = $100.00
Tax = $108.50 − $100.00 = $8.50
US State Sales Tax Rates (2024)
| State | State Rate | Avg. Local | Avg. Combined | |-------|-----------|-----------|---------------| | Oregon | 0% | 0% | 0% | | Delaware | 0% | 0% | 0% | | Montana | 0% | 0% | 0% | | New Hampshire | 0% | 0% | 0% | | California | 7.25% | 1.43% | 8.68% | | Tennessee | 7% | 2.55% | 9.55% | | Louisiana | 4.45% | 5.10% | 9.55% | | Texas | 6.25% | 1.94% | 8.19% | | New York | 4% | 4.52% | 8.52% | | Florida | 6% | 1.05% | 7.05% |
Rates are approximate and subject to change. Local rates vary by city and county within states.
What Is Taxable (and What Is Not)
Sales tax applicability varies by state and product category:
Generally taxable: Clothing (except in some states), electronics, furniture, most goods.
Often exempt:
- Groceries (food for home consumption) — exempt or reduced rate in most states
- Prescription medications — exempt in most states
- Some clothing below a threshold (e.g., NY exempts clothing/footwear under $110 per item)
- Farm equipment and agricultural supplies — often exempt
- Educational materials in some states
Digital goods and software: Increasingly taxable as states update their laws for the digital economy. SaaS subscriptions, digital downloads, streaming services may or may not be taxable depending on your state.
Frequently Asked Questions
What states have no sales tax? Five states impose no state-level sales tax: Oregon, Montana, New Hampshire, Delaware, and Alaska (which has no state tax but allows local taxes). If you live near a state border with no sales tax, buying large items in the no-tax state can save hundreds of dollars — though some states (like California) require residents to self-report and pay "use tax" on out-of-state purchases brought back for use in the state.
Does online shopping require paying sales tax? After the 2018 Supreme Court ruling in South Dakota v. Wayfair, states can require out-of-state online retailers to collect sales tax on purchases shipped to customers in their state. Most major online retailers (Amazon, Walmart, etc.) now collect sales tax in all states that have it. The "sales tax-free online shopping" era is largely over.
Can businesses claim back sales tax they paid? In most states, businesses can claim a resale exemption — they do not pay sales tax on items purchased for resale (the end consumer pays it). Businesses also typically do not pay sales tax on items purchased exclusively for business use (not resale) in states that have a B2B exemption. Tax paid on eligible business purchases can sometimes be claimed as a deduction or offset.
Is sales tax deductible on federal income taxes? US taxpayers who itemize deductions (on Schedule A) can deduct either state and local income taxes OR state and local sales taxes paid — not both. The total state and local tax (SALT) deduction is capped at $10,000 per year for all state and local taxes combined. For taxpayers who live in states with no income tax (like Texas or Florida), deducting sales taxes can be valuable, but the $10,000 SALT cap limits the benefit for most people.
What is use tax? Use tax is a companion to sales tax. If you buy something without paying sales tax (online, out-of-state, or from a vendor who didn't charge tax) and bring it into your state for use, you technically owe "use tax" at the same rate as your state's sales tax. Most consumers never pay this because it is self-reported and largely unenforced for individuals, but businesses are audited for it regularly.
Related Free Tools on RoughTools
- Discount Calculator — apply discounts then add tax
- Tip Calculator — calculate tip on pre-tax or post-tax restaurant bill
- Percentage Calculator — calculate any tax or percentage amount
- Budget Calculator — plan shopping budget including tax
Calculate Sales Tax Now
The free Sales Tax Calculator at RoughTools adds or removes sales tax from any price. Includes built-in US state tax rates and the ability to enter any custom rate. No account needed, completely free.