Reverse Sales Tax Calculator

Calculate the price before tax when you know the total price including sales tax.

Total Price (including tax)

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Add Sales Tax Calculator

Calculate the total price when you know the price before tax.

Price Before Tax

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Compare Prices Across States

See how much a product costs in different states after tax (state rate only).

Price Before Tax

US Sales Tax Rates by State (2025)

Current state sales tax rates for all 50 states plus Washington D.C. Rates verified from Tax Foundation and state department of revenue sources.

Alabama

Combined Avg: 9.46%

High local tax rates

Alaska

No State Tax

Local taxes may apply

Arizona

5.6%

Combined Avg: 8.38%

State + local rates

Arkansas

6.5%

Combined Avg: 9.46%

Above average rates

California

7.25%

Highest State Rate

Combined up to 10.75%

Colorado

2.9%

Lowest State Rate

High local variation

Connecticut

6.35%

Combined: 6.35%

No local tax

Delaware

No Sales Tax

Business-friendly

Florida

Combined Avg: 7.08%

Tourism destination

Georgia

Combined Avg: 7.43%

State + local rates

Hawaii

GET Tax

General Excise Tax

Idaho

Combined Avg: 6.02%

Low local variation

Illinois

6.25%

Combined Avg: 8.83%

Chicago rates higher

Indiana

Combined: 7%

Uniform statewide

Iowa

Combined Avg: 6.95%

Local option tax

Kansas

6.5%

Combined Avg: 8.68%

Food tax eliminated 2025

Kentucky

Combined: 6%

No local sales tax

Louisiana

Combined: 10.11%

Highest combined rate

Maine

5.5%

Combined: 5.5%

No local tax

Maryland

Combined: 6%

Uniform rate

Massachusetts

6.25%

Combined: 6.25%

No local tax

Michigan

Combined: 6%

State rate only

Minnesota

6.875%

Combined Avg: 7.52%

Local variations

Mississippi

Combined Avg: 7.07%

Reduced grocery rate

Missouri

4.225%

Combined Avg: 8.35%

High local rates

Montana

No Sales Tax

Tax-free shopping

Nebraska

5.5%

Combined Avg: 6.94%

Local option tax

Nevada

6.85%

Combined Avg: 8.25%

Tourism dependent

New Hampshire

No Sales Tax

Border shopping destination

New Jersey

6.625%

Combined Avg: 6.60%

Urban Enterprise Zones

New Mexico

Gross Receipts Tax

Combined avg 7.84%

New York

Combined Avg: 8.54%

NYC rates 8.875%

North Carolina

4.75%

Combined Avg: 6.99%

Moderate rates

North Dakota

Combined Avg: 7.04%

Local variations

Ohio

5.75%

Combined Avg: 7.25%

County rates vary

Oklahoma

4.5%

Combined Avg: 9.06%

High local rates

Oregon

No Sales Tax

Shopping destination

Pennsylvania

Combined Avg: 6.34%

Low local variation

Rhode Island

Combined: 7%

No local tax

South Carolina

Combined Avg: 7.47%

Local option tax

South Dakota

4.2%

Combined Avg: 6.40%

Tourism tax

Tennessee

Combined: 9.61%

Second highest combined

Texas

6.25%

Combined Avg: 8.20%

No income tax

Utah

6.1%

Combined Avg: 7.25%

Local option tax

Vermont

Combined Avg: 6.36%

Local option tax

Virginia

5.3%

Combined Avg: 5.77%

Low combined rate

Washington

6.5%

Combined: 9.51%

Third highest combined

West Virginia

Combined Avg: 6.55%

Municipal taxes

Wisconsin

Combined Avg: 5.43%

County tax varies

Wyoming

Combined Avg: 5.36%

Low rates overall

Washington D.C.

Combined: 6%

District rate only

Understanding State vs Combined Rates

The state rate is set by the state government. The combined rate includes state plus average local rates (county, city, and special district taxes). For precise rates in your area, check your local tax authority.

Understanding US Sales Tax

What is Sales Tax in the United States?

Sales tax in the United States is a consumption tax imposed by state and local governments on the sale of goods and services. Unlike Canada or many European countries, the US has no federal sales tax. Each state determines its own sales tax policy. Learn more from the IRS state tax resources.

No Federal Tax: Unlike Canada's GST, there is no federal sales tax in the USA
State-Based: Each state sets its own rate (0% to 7.25%)
Local Taxes: Counties, cities, and districts can add their own taxes
5 Tax-Free States: Alaska, Delaware, Montana, New Hampshire, Oregon
Combined Rates: Total rate = State + County + City + Special District

States with No Sales Tax

Five states have no statewide sales tax, making them attractive for both consumers and businesses:

Alaska: 0% state tax (but local jurisdictions can impose sales tax up to 7.5%)
Delaware: 0% sales tax (business-friendly incorporation state)
Montana: 0% sales tax (no local taxes either)
New Hampshire: 0% sales tax (border shopping destination)
Oregon: 0% sales tax (major shopping destination)

These "NOMAD" states (New Hampshire, Oregon, Montana, Alaska, Delaware) generate revenue through other means like income taxes, property taxes, or corporate taxes.

How to Calculate Reverse Sales Tax

To find the pre-tax price when you know the total including tax:

Formula: Pre-tax Price = Total Price ÷ (1 + Tax Rate)
Example (California 7.25%): $107.25 ÷ 1.0725 = $100.00
Example (Texas 6.25%): $106.25 ÷ 1.0625 = $100.00
Example (Colorado 2.9%): $102.90 ÷ 1.029 = $100.00
Tax Amount: Total Price - Pre-tax Price = Sales Tax Paid

State vs Local Sales Tax

Understanding the difference between state and local sales tax is crucial for businesses:

State Sales Tax: Set by state legislature, uniform across the state
County Tax: Additional tax imposed by county governments
City Tax: Additional tax imposed by municipal governments
Special District Tax: Extra tax for transit, tourism, or other districts
Combined Rate: Sum of all applicable taxes in that jurisdiction
Example: Los Angeles = 7.25% state + 2.50% local = 9.75% total

Origin-Based vs Destination-Based Sourcing

How sales tax is calculated depends on whether a state uses origin-based or destination-based sourcing:

Origin-Based: Tax rate based on seller's location (AZ, CA, IL, MS, MO, NM, OH, PA, TN, TX, UT, VA)
Destination-Based: Tax rate based on buyer's location (most states)
Remote Sellers: Generally use destination-based sourcing regardless of state
Example: TX seller ships to CA buyer = Use CA rate (destination)
In-State Sales: Follow state-specific origin or destination rules

Economic Nexus and Online Sales

Since the 2018 Supreme Court decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax based on economic nexus. Learn more from the Tax Foundation's analysis.

Economic Nexus: Sufficient connection to a state based on sales volume
Common Threshold: $100,000 in sales or 200 transactions per year
Varies by State: Some states use $100k only, others add transaction counts
Registration Required: Must register with state tax authority once threshold met
Marketplace Facilitators: Amazon, eBay, Etsy collect tax on behalf of sellers
Compliance: Businesses must track sales by state and monitor thresholds

What Items are Taxable?

Taxability varies significantly by state:

Usually Taxable: Clothing, electronics, furniture, vehicles, prepared food
Often Exempt: Groceries (unprepared food), prescription drugs, medical devices
State Variations: Some states tax groceries, others don't
Services: Generally not taxed, but varies by state (Hawaii taxes most services)
Digital Products: Software, e-books, streaming (increasingly taxed)
Example: Clothing taxed in CA but exempt in PA under $110

Sales Tax Holidays

Many states offer sales tax holidays - temporary periods when certain items are exempt from sales tax:

Back-to-School: Clothing, school supplies, computers (July-August)
Hurricane Preparedness: Emergency supplies (FL, AL, MS, LA)
Energy Efficiency: Appliances, insulation (varies by state)
Gun Safes: Firearm storage (several southern states)
2025 Dates: Vary by state, check your state's department of revenue

Business Applications

Reverse sales tax calculations are essential for:

Accounting: Separating tax from revenue in financial statements
Expense Tracking: Identifying base cost vs tax for business purchases
Pricing Strategy: Setting retail prices when displaying inclusive pricing
Tax Compliance: Verifying collected amounts match required rates
Refund Processing: Calculating appropriate refunds including tax
Budget Planning: Determining actual costs before taxes

Step-by-Step: Reverse Tax Calculation Examples

Example 1: California (Highest State Rate)

You receive a receipt showing $322.50 total in California. What was the pre-tax price?

Step 1: California state rate = 7.25%
Step 2: Convert to decimal: 7.25% = 0.0725
Step 3: Calculate: $322.50 ÷ 1.0725 = $300.70 (pre-tax)
Step 4: Tax amount: $322.50 - $300.70 = $21.80
Note: This uses state rate only; actual combined rate may be higher

Example 2: No Sales Tax State (Oregon)

A purchase in Oregon totals $100.00. What is the pre-tax price?

Answer: $100.00 (no calculation needed)
Reason: Oregon has 0% sales tax
Benefit: Price shown is price paid

Example 3: Texas (Popular State)

Business expense in Texas shows $212.50 total. Calculate the base price.

Step 1: Texas state rate = 6.25%
Step 2: Calculate: $212.50 ÷ 1.0625 = $200.00
Step 3: Tax: $212.50 - $200.00 = $12.50
Verification: $200 × 0.0625 = $12.50 ✓

Example 4: Combined State and Local (Louisiana)

Purchase in New Orleans with 10.11% combined rate totals $220.22.

Step 1: Combined rate = 10.11% (5% state + 5.11% local)
Step 2: Calculate: $220.22 ÷ 1.1011 = $200.00
Step 3: Total tax: $20.22
State portion: $200 × 0.05 = $10.00
Local portion: $200 × 0.0511 = $10.22

State Sales Tax Comparison 2025

Compare sales tax rates across US states. Data sourced from Tax Foundation and state revenue departments.

State	State Rate	Avg Local Rate	Combined Avg	$100 Item Total
Louisiana	5.00%	5.11%	10.11%	$110.11
Tennessee	7.00%	2.61%	9.61%	$109.61
Washington	6.50%	3.01%	9.51%	$109.51
Arkansas	6.50%	2.96%	9.46%	$109.46
Alabama	4.00%	5.46%	9.46%	$109.46
California	7.25%	1.59%	8.84%	$108.84
Delaware	0.00%	0.00%	0.00%	$100.00
Montana	0.00%	0.00%	0.00%	$100.00
New Hampshire	0.00%	0.00%	0.00%	$100.00
Oregon	0.00%	0.00%	0.00%	$100.00

Key Insights

Highest Combined: Louisiana at 10.11% (highest in the nation)
Highest State: California at 7.25% (but combined avg is 8.84%)
Lowest State with Tax: Colorado at 2.9%
No Tax States: 5 states (AK, DE, MT, NH, OR) have 0% state tax
National Average: Combined rate averages 7.53%

Frequently Asked Questions

How do I calculate reverse sales tax?

To calculate reverse sales tax, divide the total price (including tax) by (1 + tax rate). For example, in California with 7.25% sales tax: $107.25 ÷ 1.0725 = $100 pre-tax price. This removes the tax from the total to find the original price.

Which states have no sales tax?

Five US states have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska does allow local jurisdictions to impose sales taxes. These states are often referred to as the "NOMAD" states.

What state has the highest sales tax?

California has the highest state sales tax rate at 7.25%. However, when including local taxes, Louisiana has the highest combined rate at 10.11%, followed by Tennessee at 9.61% and Washington at 9.51%.

Is there federal sales tax in the USA?

No, there is no federal sales tax in the United States. Sales tax is imposed only by state and local governments. This differs from countries like Canada which have a federal GST (Goods and Services Tax).

How do I calculate pre-tax price?

To calculate the pre-tax price: Divide the total price by (1 + tax rate as decimal). Example: $106.25 total with 6.25% tax = $106.25 ÷ 1.0625 = $100.00 pre-tax. The tax amount is $6.25.

What is economic nexus for sales tax?

Economic nexus means a business has sufficient connection to a state to be required to collect sales tax, even without physical presence. Most states use $100,000 in annual sales as the threshold. This applies to online sellers following the 2018 South Dakota v. Wayfair Supreme Court decision.

Are groceries taxed in the US?

It varies by state. Most states exempt unprepared groceries from sales tax, but 13 states tax groceries at some level. States like Alabama, Mississippi, and South Dakota tax groceries at the full rate, while others like Arkansas and Illinois tax them at reduced rates. Prepared food (restaurants) is generally taxed everywhere.

What is origin-based vs destination-based sales tax?

Origin-based means tax is collected based on the seller's location. Destination-based means tax is based on the buyer's location. Most states use destination-based for remote sellers. States like California and Texas use origin-based for in-state sales but destination-based for out-of-state sales.

Do I need to collect sales tax for online sales?

If you exceed a state's economic nexus threshold (typically $100,000 in sales), you must register and collect sales tax in that state. Many marketplace facilitators like Amazon and eBay now collect tax on your behalf. Check each state's requirements on their department of revenue website.

What are sales tax holidays?

Sales tax holidays are periods when states temporarily suspend sales tax on certain items, typically back-to-school supplies, clothing, computers, or hurricane preparedness items. These usually occur in July-August. Not all states offer sales tax holidays, and dates/eligible items vary by state.

Can local sales tax be higher than state sales tax?

Yes! In Alabama, the average local sales tax (5.46%) is higher than the state rate (4%). Colorado has a 2.9% state rate but local taxes can add up to 8.3%. This is why combined rates can be significantly higher than state rates alone.

Are digital products taxed?

Taxation of digital products (e-books, software, streaming services, digital downloads) varies widely by state. Over 30 states now tax some digital products. States like Louisiana added digital product taxation in 2025. Software as a Service (SaaS) is particularly complex, with different rules in each state.

How often do sales tax rates change?

State rates change infrequently (every few years), but local rates can change quarterly or even monthly. There are over 12,000 sales tax jurisdictions in the US. Louisiana increased its rate from 4.45% to 5% in January 2025. Businesses should verify rates regularly.

What is use tax?

Use tax is sales tax owed on purchases made out-of-state or online when no sales tax was collected. If you buy something from a no-sales-tax state (like Oregon) and bring it to your home state (like California), you technically owe use tax. Most individuals don't pay use tax, but businesses are expected to report and remit it.

Why doesn't Alaska have sales tax like other states?

Alaska has no statewide sales tax because it generates substantial revenue from oil production taxes and royalties. However, many local jurisdictions (boroughs and cities) do impose local sales taxes up to 7.5%. This gives Alaska an average local rate of 1.89%.

How do marketplace facilitators affect sales tax?

Since 2019-2020, most states require marketplace facilitators (Amazon, eBay, Etsy, etc.) to collect and remit sales tax on behalf of third-party sellers. This simplifies compliance for small businesses but means they must still track nexus for sales made outside these platforms.

What's the difference between sales tax and excise tax?

Sales tax applies to a broad range of goods and services at the retail level. Excise tax targets specific products (gasoline, alcohol, tobacco, tires) and is often included in the price you see. Hawaii's 4% "sales tax" is technically a General Excise Tax (GET) that functions differently from traditional sales tax.

How do I register for sales tax collection?

Register through each state's department of revenue website. You'll need your business information, EIN, and estimated sales figures. Some states offer online registration, others require forms. After registration, you'll receive a sales tax permit and filing schedule. Visit your state's revenue department site or check Streamlined Sales Tax for multi-state registration.

Are services subject to sales tax?

Most states don't tax services, but this is changing. Hawaii taxes nearly all services. States like New Mexico, South Dakota, and West Virginia tax many services. Digital services (SaaS, streaming) are increasingly taxed. Professional services (legal, medical, accounting) are generally exempt everywhere. Each state has specific lists of taxable services.

What happens if I don't collect required sales tax?

You're personally liable for uncollected sales tax plus penalties and interest. States can assess tax going back 3-4 years (or longer for fraud). Penalties typically range from 5-25% plus interest around 10% annually. Some states offer voluntary disclosure programs with reduced penalties. Always collect tax when required - it's not your money to keep.

Official Tax Resources and References

For authoritative information on US sales taxes, consult these official sources:

Federal Resources

Internal Revenue Service (IRS): IRS.gov - Federal tax authority
State Tax Links: IRS State Tax Resources
Small Business Guide: Small Business Tax Center

Research Organizations

Tax Foundation: Tax Foundation - Nonpartisan tax research
Sales Tax Rates: State and Local Sales Tax Rates
Streamlined Sales Tax: SST Governing Board - Multi-state compliance

State Tax Authority Links

Alabama: Alabama Department of Revenue
California: CA Dept of Tax and Fee Administration
Florida: Florida Department of Revenue
Illinois: Illinois Department of Revenue
New York: NY Department of Taxation and Finance
Texas: Texas Comptroller
Washington: Washington Department of Revenue
Find Your State: Search "[Your State] department of revenue" for official site

Business Tools and Compliance

Sales Tax Institute: Professional sales tax education
Nexus Calculator: Economic nexus tools

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Last Updated: January 2025

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Disclaimer

Not Professional Tax Advice

IMPORTANT: This calculator provides estimates for informational purposes only. We make no warranties about accuracy, completeness, or reliability. Tax rates change frequently - always verify with official sources.

Not Tax Advice: Consult a qualified tax professional for specific situations
Rate Changes: Verify current rates with state tax authorities
No Liability: Not responsible for losses from calculator use
Official Sources: IRS.gov and state revenue departments

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Reverse Sales Tax Calculator USA