There is no federal sales tax in the United States. The federal government does not add a general tax to retail purchases, and no portion of what you pay at a checkout goes to the U.S. Treasury as a broad consumption tax. Every general sales tax collected in this country is imposed by a state, a city, a county, or a special district. Washington funds itself through other means: income taxes, payroll taxes, excise taxes on specific products, and customs duties on imports.
That answer surprises visitors from countries with a national VAT, and it can confuse Americans too, because several federal charges look and feel like sales taxes even though they are structured differently. Here is what actually applies to your purchases and why.
Sales Tax Is a State and Local Matter
Forty-five states and the District of Columbia impose a statewide sales tax, with base rates running from about 4% to 7.25%. Five states charge no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon. Alaska is a partial exception because it lets individual cities and boroughs impose their own local sales taxes.
In most states, cities, counties, and special districts stack their own rates on top of the state rate, which can push the combined figure several percentage points higher. What counts as taxable also depends on where you are. Prescription medications are exempt in most states. Unprepared groceries are often exempt or taxed at a reduced rate. A handful of states exempt clothing. Several states run annual sales tax holidays, typically a few days in late summer, during which qualifying school supplies and clothing can be bought tax-free up to a per-item cap.
If you buy something in a no-tax state and bring it home to a state that does tax it, you generally owe a “use tax” to your home state at the same rate as the sales tax. Most states require you to report use tax on your annual income tax return, though compliance is low.
Online sellers now collect state and local sales tax in most situations. In South Dakota v. Wayfair, Inc., the U.S. Supreme Court held that states may require remote sellers to collect sales tax based on their economic activity in the state, even without a physical presence there.1Justia Supreme Court Center. South Dakota v Wayfair Inc Nearly every large online retailer now applies the destination state’s sales tax at checkout. The rate you see is still a state and local rate, not a federal one.
Federal Excise Taxes on Specific Goods
The federal government does tax certain products, but through excise taxes rather than a general sales tax. These are typically collected from manufacturers, importers, or service providers, who build the cost into the price you pay. Federal excise taxes are authorized under Subtitle D of the Internal Revenue Code.2Office of the Law Revision Counsel. 26 USC Subtitle D – Miscellaneous Excise Taxes
The federal gasoline tax is 18.3 cents per gallon. Diesel is taxed at 24.3 cents per gallon, and aviation gasoline at 19.3 cents per gallon.3Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax These are collected when fuel leaves the refinery or import terminal, so the tax is already inside the pump price.
A standard pack of 20 cigarettes carries a federal excise tax of roughly $1.01, based on a statutory rate of $50.33 per 1,000 small cigarettes.4Office of the Law Revision Counsel. 26 USC 5701 – Rate of Tax Distilled spirits are taxed at $13.50 per proof gallon at the general rate, with a reduced $2.70 rate for smaller producers on their first 100,000 proof gallons each year.5Office of the Law Revision Counsel. 26 USC 5001 – Imposition, Rate, and Attachment of Tax Both taxes are collected from the manufacturer or importer.
Pistols and revolvers carry a 10% federal excise tax on the sale price. Other firearms, shells, and cartridges are taxed at 11%.6TTB: Alcohol and Tobacco Tax and Trade Bureau. Firearms and Ammunition Taxes and Tax Exemptions Again, the tax hits the manufacturer or importer, not the retail counter.
Heavy trucks, trailers, and highway tractors are one of the few products actually taxed at the retail level by the federal government. The tax is 12% of the sale price and applies to the first retail sale.7Internal Revenue Service. Publication 510 (12/2025), Excise Taxes
Some federal excise taxes do appear as line items on your bill. A domestic airline ticket carries a 7.5% federal excise tax on the fare, plus a segment fee of $5.30 per passenger.8Federal Aviation Administration (FAA). Trust Fund Excise Taxes Structure Local and toll telephone service carries a 3% federal excise tax.9Office of the Law Revision Counsel. 26 USC 4251 – Imposition of Tax These are narrow product-specific taxes, not a general sales tax.
Duties on Imported Goods
When goods enter the country from abroad, the federal government collects customs duties. U.S. Customs and Border Protection classifies imported merchandise under the Harmonized Tariff Schedule and assesses duties based on the product and country of origin.10U.S. Customs and Border Protection. Harmonized Tariff Schedule – Determining Duty Rates Rates vary widely, from duty-free to well above 25% for some categories under recent reciprocal tariff actions.
Small international shipments used to slip through duty-free. Until mid-2025, packages valued at $800 or less qualified for the de minimis exemption. That exemption was suspended for shipments from all countries effective August 29, 2025, and low-value packages are now subject to the same duty rules as larger commercial shipments.11U.S. Customs and Border Protection. E-Commerce Frequently Asked Questions If you buy from overseas sellers, expect duties on goods that previously arrived free of federal charges.
How the Federal Government Raises Money Instead
Without a national sales tax, Washington relies mainly on direct taxes on income and employment. The 16th Amendment, ratified in 1913, authorized Congress to tax income without apportioning the tax among the states by population.12National Archives. 16th Amendment to the US Constitution – Federal Income Tax (1913)
Individual federal income tax rates for 2026 range from 10% to 37%. Corporations pay a flat 21% on profits. On top of that, the Federal Insurance Contributions Act funds Social Security and Medicare through a combined 15.3% payroll tax, split evenly between employer and employee: each pays 6.2% for Social Security and 1.45% for Medicare.13Internal Revenue Service. Topic No 751, Social Security and Medicare Withholding Rates Self-employed workers pay the full 15.3% themselves and can deduct the employer-equivalent half when computing adjusted gross income.14Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The federal estate and gift taxes hit only very large wealth transfers, with a $15,000,000 per-person exclusion in 2026.15Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Could a Federal Sales Tax Ever Be Enacted?
Congress has considered creating one, but nothing has been enacted. The most prominent proposal is the Fair Tax Act (H.R. 25), which would replace the federal income tax, payroll tax, and estate tax with a single national consumption tax of 23%, calculated as a tax-inclusive rate so the tax is included in the sticker price rather than added at checkout. The bill would also eliminate the Internal Revenue Service. It has been reintroduced in multiple sessions of Congress, most recently in January 2025, and has not advanced to a floor vote.
The Congressional Budget Office has separately analyzed a national value-added tax as a deficit-reduction option, estimating that a broad-based 5% VAT could reduce the federal deficit by about $350 billion in its first year.16Congressional Budget Office. Impose a 5 Percent Value-Added Tax That analysis is a policy study, not a bill. Unless and until Congress passes something along these lines, the answer for anyone paying at a U.S. register remains the same: the tax on your receipt is a state or local tax, and there is no federal sales tax on top of it.