California has the highest state sales tax rate at 7.25 percent, but your actual tax depends on local additions

California's base state sales tax is 7.25 percent, the highest in the country. However, that number alone does not tell you what you will pay. Most states allow counties and cities to add their own sales tax on top of the state rate. In California, local additions can push the total to 8.625 percent or higher depending on where you shop. Tennessee, Louisiana, and Arkansas also have high combined rates when you include local taxes.

The reason this matters: a 1 percent difference on a $100 purchase is $1, but on a $10,000 car or appliance it becomes $100. If you live near a state border or make large purchases, knowing your actual local rate — not just the state rate — can affect your decision about where to buy.

Key Takeaways

  • California's state sales tax of 7.25 percent is the highest in the nation, but local taxes can raise your total to 8.625 percent or more.
  • Tennessee, Louisiana, and Arkansas have combined state-plus-local rates that often exceed 9 percent, sometimes reaching 9.5 percent.
  • Your actual sales tax rate depends on your county and city, not just your state, so checking your local rate before a large purchase can save money.
  • Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—have no state sales tax, though some allow local taxes or have other transaction taxes.

How state and local sales taxes stack together

Every state except five sets a base sales tax rate. On top of that, counties and cities can add their own percentage. Your receipt shows the combined total. For example, if you buy something in Los Angeles County, California, you pay 7.25 percent state tax plus 2.25 percent county tax, for a total of 9.5 percent. The same item in San Francisco is taxed at 8.625 percent because the city adds a different amount.

This layering means two people in the same state can pay different sales tax rates depending on their zip code. A resident of rural California might pay 7.25 percent (state only), while someone in a city pays 8 to 9.5 percent. When you shop online or across state lines, the tax you owe depends on where the item is delivered or picked up, not where you live.

States with the highest combined rates

California leads at 7.25 percent state rate, but when local taxes are included, several states tie or exceed it. Tennessee's state rate is 9.55 percent — the second-highest state rate in the nation — and local additions can push it to 9.75 percent or higher. Louisiana's state rate is 4.45 percent, but combined with local taxes, many parishes reach 9.5 percent. Arkansas has a 6.5 percent state rate with local additions often bringing totals to 9.5 percent.

Washington state has a 6.5 percent state rate, but some cities add local tax, reaching 10.25 percent in certain areas. The highest combined rates in the country — around 10.25 percent — appear in specific cities in Washington, Tennessee, and Louisiana, not across entire states. If you live in or frequently shop in a high-tax area, checking your exact local rate on your city or county tax assessor's website takes two minutes and can inform decisions on large purchases.

States with no sales tax

Five states have no state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. This does not mean shopping there is always tax-free. Alaska allows municipalities to impose local sales taxes, and some do. New Hampshire has no sales tax on goods, but it taxes prepared food and restaurant meals. Oregon has no sales tax on goods or food, making it the most tax-friendly for most purchases.

Delaware and Montana also have no local sales taxes, so residents and shoppers there pay zero sales tax on most purchases. However, these states often make up the revenue through other taxes — property tax, income tax, or business taxes — so the overall tax burden is not necessarily lower. If you are considering a move or a major purchase, comparing total state and local taxes (not just sales tax) gives a clearer picture.

How to find your exact local sales tax rate

Your state's Department of Revenue or Tax Commission website lists the state rate and usually has a tool to look up your local rate by zip code or address. For California, visit the California Department of Tax and Fee Administration. For Tennessee, use the Tennessee Department of Revenue lookup. Most states have a similar search function that takes less than a minute.

If you are buying a car, appliance, or other high-value item, call your local tax assessor's office or check your last sales receipt — it shows your combined rate. Online retailers like Amazon now calculate and display the tax rate for your delivery address before you complete checkout, so you can see the exact amount you will owe. For mail orders or out-of-state purchases, the rules are more complex and depend on whether the seller has a physical presence in your state; if you are unsure, contact the seller directly.

Why sales tax rates change and what affects them

States and cities adjust sales tax rates to fund schools, roads, and local services. When a city needs revenue for a new school or transit project, it may raise the local sales tax rate by 0.25 or 0.5 percent. These changes are voted on locally and take effect on a specific date, usually the first of a month. If you bought something last month at 8.5 percent and the rate rose to 9 percent this month, your next purchase will reflect the new rate.

Some states also have temporary sales tax holidays — usually in August for back-to-school items or around other occasions — when certain goods are taxed at a lower rate or not at all. These are state-level decisions and vary widely. If you plan a large purchase, checking whether your state or city has an upcoming holiday can save you money, though the savings are usually modest unless you are buying clothing or school supplies in bulk.

Frequently Asked Questions

Do I pay sales tax on groceries?

Most states exempt unprepared food like raw vegetables, meat, and dairy from sales tax. Prepared foods — deli items, hot food, restaurant meals — are usually taxed. Some states tax all food; others tax none. Check your state's Department of Revenue website for the specific rule where you live, as it varies significantly.

If I buy something online from out of state, do I owe sales tax?

If the seller has a physical location in your state, they must collect sales tax. If they do not, you technically owe "use tax" to your state, but most people do not report it. Large retailers like Amazon now collect tax in all states. For small sellers, the rule is complex; when in doubt, ask the seller whether tax is included in their price.

Can I avoid sales tax by shopping in a neighboring state?

You owe sales tax in the state where you take possession of the item, not where you live. If you drive to a neighboring state and buy something there, you pay that state's rate. Bringing it home does not trigger additional tax, but you cannot legally avoid your home state's tax by shopping elsewhere — though enforcement is rare for individual purchases.

Does sales tax explore to services like haircuts or car repairs?

Most states do not tax services, only goods. A haircut is usually not taxed, but if you buy hair products at the salon, those are taxed. Car repairs are typically not taxed, but parts are. The rule varies by state and sometimes by the specific service, so check your state's tax rules if you are unsure about a particular service.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller at the point of purchase. Use tax is a tax you owe on items you buy out of state and bring home, designed to level the playing field between local and remote sellers. In practice, use tax is rarely enforced for individual consumers, though large purchases may trigger a notice from your state.