The average combined state and local sales tax rate in the United States is 7.53% as of January 2026, but the combined state and local sales tax rates by state range from zero in five states to 10.11% in Louisiana. “Combined” means every layer stacked on the same purchase: the state rate, plus any county, city, and special-district taxes that apply at the point of sale. Where you buy something can matter almost as much as what you buy.
States With the Highest Combined Rates
The five states with the highest average combined rates in 2026 are:
- Louisiana — 10.11%
- Tennessee — 9.61%
- Washington — 9.51%
- Arkansas — 9.46%
- Alabama — 9.46%
None of these states has the highest state-level rate. That distinction belongs to California at 7.25%, whose combined average lands at 8.99% because its local add-ons are comparatively modest. Louisiana charges only 5% at the state level but allows local jurisdictions to layer on an average of more than 5% on top.
States With No Sales Tax
Five states impose no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Four of those five have no sales tax at any level. Alaska is the exception: it has no state rate, but local governments can levy their own, which average 1.82% across the state.
States With the Lowest Combined Rates Among Those That Tax
Among states that do levy a sales tax, the lowest average combined rates are Hawaii at 4.50%, Maine and Wisconsin at 5.50% each, and Virginia at 5.77%. Several states keep combined rates predictable by prohibiting local add-ons entirely. Connecticut, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, and Rhode Island all charge a single flat statewide rate with no local layer.
Why the State-Level Rate Doesn’t Tell You the Combined Rate
Every combined rate starts with the state tax, which is uniform across the state’s borders. Counties frequently add a surcharge for courts, roads, and law enforcement. Cities layer on their own percentage for services like fire departments and water systems. Special-purpose districts add a fourth layer in many areas: regional transit authorities can add anywhere from 0.25% to over 1%, and voters sometimes approve stadium taxes, school-construction levies, or arts-and-culture districts that tack on small fractions of a percent. Each district needs voter approval and operates within caps set by the state legislature, but small percentages compound quickly when several overlap.
That stacking explains why two states with similar state rates can end up in very different places. Oklahoma and Louisiana both set their state rates below 5%, yet aggressive local taxation pushes both above 9% on average. Indiana charges 7% statewide, allows no local taxes, and stops there. The structure each state chooses for dividing taxing power between state and local governments is what shapes the final number on the receipt.
Why the State Average Still Isn’t Your Rate
Rates can change within a single block. A store inside a special transportation district might charge 0.5% more than one directly across the street. Cities with “home rule” authority can set their own tax policies independently of the county around them, creating pockets of higher or lower taxation. One street can mark the line between a 9% combined rate and a 6% rate in an unincorporated area next door.
This is where five-digit ZIP codes fail. ZIP codes were designed to route mail, not to track political boundaries. Roughly 23% of ZIP codes cross city or county lines, so a single ZIP can contain two or more tax jurisdictions with different rates. To pin a rate to an address, you need the full street address matched against jurisdictional boundary data, not just the ZIP.
What Actually Gets Taxed at Those Rates
The combined rate is the ceiling, not the automatic charge on every purchase. Nearly every state with a sales tax exempts prescription drugs. A majority of states also fully exempt unprepared groceries, though the treatment varies more than most people realize.
As of 2026, Tennessee taxes groceries at 4%, Utah at 3% (a 1.75% state portion combined with local taxes), and Mississippi has been phasing its grocery rate down from 7%, reaching 5% recently with further annual reductions planned. Alabama currently taxes groceries at 2% at the state level. Idaho taxes groceries at the full 6% state rate but offers a grocery tax credit on the state income tax return to offset the cost. Arkansas, Illinois, Kansas, and Oklahoma have eliminated their statewide grocery taxes in recent years, though local sales taxes on food may still apply in some of them.
Many states also run annual sales tax holidays, typically two- or three-day windows when specific categories are temporarily exempt. Back-to-school weekends in August are the most common, covering clothing, school supplies, and sometimes computers up to a price cap. Some states offer hurricane-preparedness holidays for generators and emergency supplies, or energy-efficiency holidays for qualifying appliances. Price caps vary: a $200 jacket may not qualify during a clothing holiday if the state caps the exemption at $100 per item.
Which State’s Rate Applies When Goods Are Shipped
Inside a physical store, the rate is obvious. When goods are shipped, sourcing rules decide whose rate governs the transaction, and states fall into two camps.
Twelve states use origin-based sourcing, meaning the tax rate is set by where the seller operates: Arizona, California, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, and Virginia. California adds a wrinkle: its state, city, and county taxes follow origin-based rules, but its district-level taxes are destination-based. Every other state with a sales tax, along with Washington, D.C., uses destination-based sourcing and applies the rate at the buyer’s delivery address.
Destination-based sourcing has become the dominant framework for online sales since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc. That ruling overturned the requirement that a seller must have a physical presence in a state before the state could require tax collection. In its place, the Court endorsed economic nexus: once a remote seller exceeds a threshold level of sales into a state, that state can require the seller to collect and remit tax.
Economic Nexus Thresholds
Every state with a sales tax now enforces economic nexus rules for out-of-state sellers. The most common trigger is $100,000 in annual sales into the state. The original South Dakota law also included a 200-transaction alternative, and many states initially adopted both. Colorado, Indiana, Iowa, Louisiana, North Carolina, South Dakota, Utah, Washington, and Wisconsin have since eliminated their transaction thresholds, recognizing that 200 low-dollar sales shouldn’t necessarily create a tax obligation.
A few large-market states set higher bars. California, New York, and Texas each require $500,000 in sales before economic nexus kicks in. Some states trigger the collection obligation on the very next transaction after the threshold is crossed; others give sellers until the start of the following month or calendar year. The definition of “sales” also varies: some states count gross sales, including exempt and nontaxable items, while others count only taxable sales.
Use Tax on Purchases Where No Sales Tax Was Charged
Every state that imposes a sales tax also imposes a companion use tax at the same rate. Use tax applies when you buy something without paying sales tax, then store or use the item in your home state. Economic nexus laws have largely closed the old online-purchase gap, but use tax still comes up with purchases from small out-of-state sellers below the nexus threshold, items bought while traveling, and goods bought from private parties.
The obligation to report and pay use tax falls on the buyer, not the seller. Most states include a use tax line on the annual income tax return, and a few provide lookup tables that estimate what you owe based on income level without tracking every receipt.
Calculating the Tax on a Purchase
The math itself is straightforward. Convert the combined percentage to a decimal (8.25% becomes 0.0825), then multiply by the pre-tax price. A $100 item at an 8.25% combined rate produces $8.25 in tax, for a total of $108.25. Most jurisdictions round to the nearest cent, with half-cent amounts rounding up. Receipts should itemize the tax separately from the price of goods, which lets you verify that the rate matches your location rather than the state average.