California has the highest state sales tax rate at 7.25 percent, but the total tax you pay at checkout is usually higher

When you buy something in a store, the sales tax that appears on your receipt comes from two sources: your state and your local county or city. California's state rate of 7.25 percent is the highest in the country, but that is only part of the picture. Most California counties add their own local tax on top of it, which means the total rate you actually pay ranges from 7.25 percent to over 10 percent depending on where you shop.

Tennessee, Louisiana, and Arkansas all tie for the second-highest state rate at 7 percent. Like California, these states allow counties and cities to add local taxes, so the final amount you pay varies by location within each state. A few other states—including Alabama, Georgia, and Mississippi—also have a 7 percent state rate.

The lowest state sales tax rates belong to Colorado, Georgia, Hawaii, Louisiana, New York, and Wyoming, which charge 4 percent. Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not have a state sales tax at all, though some of them allow local taxes or have other taxes on specific items like groceries or prepared food.

Key Takeaways

  • California's state sales tax of 7.25 percent is the highest in the nation, but local taxes can push the total to over 10 percent in some counties.
  • Tennessee, Louisiana, and Arkansas tie for second place at 7 percent state tax, plus whatever local tax applies in your area.
  • The total tax you pay depends on both state and local rates, so two stores in the same state can charge different amounts.
  • Five states have no state sales tax at all, though some allow counties to collect local sales tax or tax specific goods.

How state and local sales taxes stack together

The sales tax you see on a receipt is the sum of the state rate plus the local rate for that specific city or county. California illustrates this clearly: the state charges 7.25 percent everywhere, but Los Angeles County adds 9.5 percent on top of that, bringing the total to 9.5 percent. In San Francisco, the local rate is 8.625 percent, so the total there is 8.625 percent. A shopper in Kern County pays only 7.25 percent because that county has no local addition.

This layering means that the "highest sales tax state" is not always the place where you pay the most at checkout. Tennessee's state rate is 7 percent, but Davidson County (which includes Nashville) adds 9.55 percent, for a combined total of 9.55 percent—higher than many California locations. Similarly, in Louisiana, Orleans Parish (which includes New Orleans) adds 4.45 percent to the state's 7 percent, reaching 11.45 percent total, which is among the highest combined rates in the country.

States with no sales tax and what they tax instead

Alaska, Delaware, Montana, New Hampshire, and Oregon do not collect state sales tax. However, this does not mean shopping there is always cheaper. Alaska allows local governments to collect sales tax, and some boroughs charge rates as high as 7.5 percent. Delaware has no sales tax but charges a gross receipts tax on businesses, which can be passed to consumers in higher prices. New Hampshire taxes prepared food and restaurant meals but not groceries or retail goods.

Oregon and Montana have no sales tax and no local sales tax either, making them genuinely tax-free for most purchases. However, Oregon taxes certain services, and both states use income tax or property tax to fund government instead. If you live in a state with no sales tax, you may pay more in other taxes to make up the difference.

Sales tax rates by region

The South and Southwest tend to have higher combined sales tax rates. Louisiana, Tennessee, and Arkansas all exceed 9 percent when local taxes are included in most populated areas. Texas has a state rate of 6.25 percent, but Houston, Dallas, and San Antonio all exceed 8.25 percent with local additions. Florida's state rate is 6 percent, but Miami-Dade County reaches 7 percent total.

The Northeast generally has lower rates. New York's state rate is 4 percent, and even with local taxes, most areas stay under 8.5 percent. Massachusetts has no state sales tax but taxes meals and certain services. New Jersey's state rate is 6.625 percent, and local additions are rare, keeping most areas under 7 percent.

The Midwest varies widely. Illinois charges 6.25 percent state tax, but Chicago adds 1.25 percent for a total of 7.25 percent. Wisconsin is 5 percent statewide. Minnesota is 6.875 percent. These rates are moderate compared to the South and Southwest.

What items are taxed and what are exempt

Most states exempt groceries from sales tax, but not all. California, for example, does not tax unprepared food like raw vegetables, meat, or bread, but does tax prepared food, candy, and soft drinks. Louisiana taxes groceries at a lower rate than other goods—3 percent instead of the full state rate. Some states tax groceries at the full rate, which increases the cost of living significantly for families buying food.

Clothing is taxed in most states, but a few offer exemptions. New York, Pennsylvania, and New Jersey do not tax most clothing items. Prescription medications are almost universally exempt, but over-the-counter drugs and vitamins are often taxed. Services like haircuts, repairs, and professional fees are usually not subject to sales tax, though this varies by state and the specific service.

How to find the exact rate where you live

To find your total sales tax rate, you need both your state rate and your local rate. Your state's Department of Revenue or Tax Administration publishes the state rate, which does not change. Your county or city tax assessor's office publishes the local rate. The easiest method is to search "[your city] sales tax rate" online—most cities and counties post this information on their government websites.

If you are shopping online, the sales tax applied depends on where the seller is located and where you are located. As of 2024, most states require online retailers to collect sales tax based on the buyer's address, not the seller's. This means you will pay your local rate even if you order from out of state. A few states have different rules for remote sellers, so if you are buying from a small business in another state, check your state's Department of Revenue website for specifics.

Why sales tax rates change and how to stay informed

State and local sales tax rates are set by legislatures and city councils, not by the federal government. Rates change when a state or locality needs more revenue or when voters approve a tax increase or decrease. These changes happen throughout the year, not on a fixed schedule. A rate that was accurate six months ago may no longer be correct.

If you are budgeting or comparing prices between states, check the current rate before making assumptions. Your state's Department of Revenue website will have the most up-to-date state rate. For local rates, contact your county assessor's office or search your city's official website. Retailers are required to charge the correct rate, so if you see a discrepancy on a receipt, contact the store or your state tax authority.

Frequently Asked Questions

Does California really have the highest sales tax in the country?

California has the highest state sales tax rate at 7.25 percent, but when you add local taxes, several other states and cities reach higher totals. New Orleans reaches 11.45 percent combined, and parts of Tennessee exceed 9.5 percent. California's state rate is the highest, but the total you pay depends on your county.

Can I avoid sales tax by shopping in a state with no sales tax?

Not always. If you live in a state with sales tax and order from a no-sales-tax state online, you still owe sales tax in your home state. Most states require online retailers to collect it at checkout. If you travel to a no-sales-tax state and buy something there, you do not pay sales tax on that purchase, but you cannot bring goods back and avoid your home state's tax.

Are groceries taxed in every state?

No. Most states exempt unprepared groceries like raw vegetables and meat, but some tax them at the full rate or a reduced rate. Louisiana taxes groceries at 3 percent instead of the full rate. Check your state's Department of Revenue website to see whether groceries are taxed where you live.

What is the difference between state and local sales tax?

State sales tax is set by the state legislature and applies everywhere in the state. Local sales tax is set by counties or cities and applies only in that area. Both are added together and appear as one number on your receipt, but they come from different government bodies.

Do I pay sales tax on services like haircuts or car repairs?

Usually not. Most states exempt services from sales tax, though some tax specific services like repairs or installation. Check your state's Department of Revenue website for a list of what is and is not taxed in your area, because the rules vary significantly by state.