The states with the highest combined sales tax rates

Tennessee, Louisiana, and Arkansas have the highest statewide sales tax rates in the country, each at 9.55%. These are the rates the state itself charges. When you add local sales taxes on top — which cities and counties can layer on — the total you pay at the register varies by exactly where you shop.

Tennessee's 9.55% state rate is the highest in the nation. Louisiana follows at 9.55%, and Arkansas at 9.55%. But the actual tax you pay depends on your location within the state. A purchase in Memphis, Tennessee might have a different total rate than one in Nashville because each city and county adds its own local tax on top of the state rate.

The second tier includes Washington, Alabama, and Mississippi, each with a 6.5% to 7% state rate before local taxes are added. Washington has no state income tax but relies heavily on sales tax revenue, which is why the rate is high. The same applies to Tennessee and Louisiana — they use sales tax as a major funding source.

Key Takeaways

  • Tennessee, Louisiana, and Arkansas each charge 9.55% state sales tax, the highest in the nation.
  • Your actual sales tax rate depends on both the state rate and the local rate where you make the purchase, so two cities in the same state can have different totals.
  • States with no income tax, like Tennessee and Washington, typically charge higher sales tax rates to fund government services.
  • The combined rate (state plus local) can exceed 10% in some cities, particularly in Louisiana and Tennessee.

How local taxes stack on top of state rates

Every state that has a sales tax allows cities and counties to add their own local tax on top. This means the rate you see on a receipt is almost never just the state rate. In Tennessee, the state charges 9.55%, but Nashville adds a local tax that brings the total to around 9.55% in some areas and higher in others depending on the specific jurisdiction.

Local rates vary widely. A county in Louisiana might add 4% to 5% on top of the state's 9.55%, pushing the total to over 14% in some parishes. The same purchase in a different parish could be taxed at a lower combined rate. This is why two people buying the same item in the same state can pay different amounts of tax.

You can find your local rate by entering your address or zip code into your state's tax department website, or by calling your city or county tax assessor's office. They can tell you the exact combined rate that applies to your location.

States with no sales tax

Five states have no sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon. This does not mean residents pay no sales tax — some of these states use other taxes to fund services. New Hampshire and Montana have no sales tax and no state income tax, making them the lowest-tax states overall.

Alaska allows municipalities to charge local sales tax even though the state does not. So a purchase in Anchorage might be taxed, while the same purchase in a different Alaska city might not be. Delaware, Oregon, and New Hampshire have no local sales tax either, so purchases in those states truly have no sales tax added.

These states fund schools, roads, and services through other means: income tax (Oregon), property tax, business taxes, or other fees. The absence of sales tax does not mean the state is cheaper overall — it depends on what you buy and where you live.

States with the lowest combined rates

Colorado, Georgia, Hawaii, Louisiana, New York, and Wyoming each have a combined state and average local rate between 4% and 5.5%, making them among the lowest. Colorado's state rate is 2.9%, one of the lowest in the nation, though local taxes can push it higher in some cities.

Wyoming has a 4% state rate and allows local taxes up to 2%, bringing the combined average to around 5.9%. Georgia's state rate is 4%, and local taxes add another 3% to 4% depending on the county. These rates are significantly lower than the 9%+ rates in Tennessee, Louisiana, and Arkansas.

Keep in mind that "average" local rates mask variation. A city in Georgia might have a combined rate of 7%, while a rural county in the same state might be 5%. The only way to know your exact rate is to check your specific location.

Why states set different sales tax rates

States choose their sales tax rates based on how they fund government services. States with no income tax — like Tennessee, Washington, and Louisiana — rely heavily on sales tax to pay for schools, roads, and public services. This is why they have some of the highest sales tax rates in the country.

States with high income tax rates, like New York and California, often have lower sales tax rates because they collect more revenue from income. The total tax burden varies by state and by how much money you earn and spend.

Local governments also set their own rates based on local needs. A city with expensive infrastructure or schools might charge a higher local sales tax than a neighboring city. Over time, these rates can shift as state legislatures and local governments adjust tax policy.

How to find the sales tax rate for your location

The fastest way to find your exact sales tax rate is to visit your state's Department of Revenue website and enter your zip code or address. Most states have a tax rate lookup tool that shows both the state and local rates combined. You can also call your city or county tax assessor's office and they will tell you the rate that applies to your address.

If you are shopping online, the sales tax you pay depends on where the seller is located and where you live. Many online retailers now charge sales tax based on your delivery address, even if the seller is in a different state. The rate applied is the combined state and local rate for your location.

For businesses that need to collect sales tax, your state's Department of Revenue publishes detailed tax tables by county and city. These are updated regularly as local rates change, so check your state's website for the most current information.

Frequently Asked Questions

Do I pay sales tax on groceries?

It depends on your state. Most states exempt groceries from sales tax or tax them at a lower rate than other items. However, some states like Tennessee and Louisiana tax groceries at the full rate. Check your state's Department of Revenue website to see which items are taxed in your location.

Why does the same item cost different amounts in different states?

Sales tax rates vary by state and by local jurisdiction within each state. A $100 item might cost $109.55 in Tennessee but $104 in Colorado because of the difference in combined tax rates. The base price of the item is the same, but the tax added at checkout is different.

Can I avoid sales tax by shopping online?

Not anymore. Most online retailers now charge sales tax based on your delivery address, using the same combined state and local rate that applies in your location. A few small sellers may not charge tax, but major retailers like Amazon collect it in all states that have a sales tax.

Do I have to pay sales tax on services?

Most states do not tax services, only goods. However, some states tax specific services like haircuts, repairs, or entertainment. Check your state's Department of Revenue to see which services are taxed where you live.

What is the difference between sales tax and use tax?

Sales tax is charged when you buy something. Use tax is a tax on items you buy outside your state and bring home — it is meant to prevent people from avoiding sales tax by shopping in lower-tax states. Most people do not pay use tax, but technically you owe it if you buy something out of state and use it at home.