How to calculate sales tax
Tax = price × rate ÷ 100 · Total = price + tax
At 8.25%, a $100 item has $8.25 of tax and costs $108.25. To take tax out of a total, divide by (1 + rate): $108.25 ÷ 1.0825 = $100.
Which rate applies?
Sales tax is set by the state plus cities, counties and special districts, so two addresses in one state can have different rates. For goods you deliver, the rate is usually the one where the buyer receives them. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon (some Alaska towns still charge a local tax). Services are taxed in some states and not in others.
2026 state sales tax rates
| State | State rate | Average local | Average combined |
|---|---|---|---|
| Alabama | 4% | 5.46% | 9.46% |
| Alaska | 0% | 1.82% | 1.82% |
| Arizona | 5.6% | 2.94% | 8.54% |
| Arkansas | 6.5% | 2.98% | 9.48% |
| California | 7.25% | 1.78% | 9.03% |
| Colorado | 2.9% | 4.99% | 7.89% |
| Connecticut | 6.35% | 0.00% | 6.35% |
| Delaware | 0% | 0.00% | 0.00% |
| District of Columbia | 6% | 0.00% | 6.00% |
| Florida | 6% | 0.98% | 6.98% |
| Georgia | 4% | 3.56% | 7.56% |
| Hawaii | 4% | 0.50% | 4.50% |
| Idaho | 6% | 0.03% | 6.03% |
| Illinois | 6.25% | 2.73% | 8.98% |
| Indiana | 7% | 0.00% | 7.00% |
| Iowa | 6% | 0.94% | 6.94% |
| Kansas | 6.5% | 2.21% | 8.71% |
| Kentucky | 6% | 0.00% | 6.00% |
| Louisiana | 5% | 5.13% | 10.13% |
| Maine | 5.5% | 0.00% | 5.50% |
| Maryland | 6% | 0.00% | 6.00% |
| Massachusetts | 6.25% | 0.00% | 6.25% |
| Michigan | 6% | 0.00% | 6.00% |
| Minnesota | 6.88% | 1.26% | 8.14% |
| Mississippi | 7% | 0.06% | 7.06% |
| Missouri | 4.23% | 4.22% | 8.45% |
| Montana | 0% | 0.00% | 0.00% |
| Nebraska | 5.5% | 1.48% | 6.98% |
| Nevada | 6.85% | 1.39% | 8.24% |
| New Hampshire | 0% | 0.00% | 0.00% |
| New Jersey | 6.63% | 0.00% | 6.63% |
| New Mexico | 4.88% | 2.80% | 7.68% |
| New York | 4% | 4.54% | 8.54% |
| North Carolina | 4.75% | 2.35% | 7.10% |
| North Dakota | 5% | 2.09% | 7.09% |
| Ohio | 5.75% | 1.54% | 7.29% |
| Oklahoma | 4.5% | 4.56% | 9.06% |
| Oregon | 0% | 0.00% | 0.00% |
| Pennsylvania | 6% | 0.34% | 6.34% |
| Rhode Island | 7% | 0.00% | 7.00% |
| South Carolina | 6% | 1.49% | 7.49% |
| South Dakota | 4.2% | 1.91% | 6.11% |
| Tennessee | 7% | 2.61% | 9.61% |
| Texas | 6.25% | 1.95% | 8.20% |
| Utah | 6.1% | 1.32% | 7.42% |
| Vermont | 6% | 0.43% | 6.43% |
| Virginia | 5.3% | 0.47% | 5.77% |
| Washington | 6.5% | 3.07% | 9.57% |
| West Virginia | 6% | 0.60% | 6.60% |
| Wisconsin | 5% | 0.72% | 5.72% |
| Wyoming | 4% | 1.39% | 5.39% |
Source: Tax Foundation, state and local sales tax rates, midyear 2026. Local averages are population-weighted; your exact rate depends on the address.
Sales tax on invoices
On an invoice, sales tax goes on its own line after the subtotal and any discount. Discounts you give reduce the taxable amount; manufacturer coupons often don’t. Shipping is taxable in some states and not in others, so check your state’s rules. In our invoice generator, choose “US sales tax”, pick the state and enter your combined rate.
Do you need to collect it at all?
You collect sales tax in a state when you have “nexus” there: a physical presence, or, since 2018, enough sales into the state (often $100,000 a year; some states also count the number of transactions). Most states require a sales tax permit before you start collecting.
Related calculators
- Free Invoice Generator: Make a professional invoice and download the PDF.
- VAT Calculator: Add or remove VAT at any rate.
- Late Fee Calculator: Interest or a flat fee on overdue invoices.
Questions people ask
How do I calculate sales tax backwards?
Divide the total by 1 plus the rate as a decimal. For a $54 total at 8%: 54 ÷ 1.08 = $50 before tax, so the tax is $4.
Do I charge sales tax on services?
It depends on the state and the service. Many states tax only goods; others tax some or most services. Check your state revenue department before adding tax to an invoice.
Formula checked October 2026 · How we calculate