The States With the Highest Combined Sales Tax

Tennessee, Louisiana, and Arkansas have the highest statewide sales tax rates in the country, each at 9.55 percent. However, the rate you actually pay depends on where you shop within that state, because cities and counties add their own local sales tax on top of the state rate. A purchase in Memphis, Tennessee might be taxed at 9.55 percent, but one in Nashville could be higher or lower depending on what Davidson County and the city add.

California's statewide rate is 7.25 percent, but combined with local taxes, some California counties reach 10.75 percent or higher. The same pattern holds in most states: the state sets a floor, then local governments layer on additional tax. This means two people in the same state can pay different rates depending on their zip code.

Key Takeaways

  • Tennessee, Louisiana, and Arkansas have the highest statewide sales tax rates at 9.55 percent each, but local taxes can push the total higher.
  • The actual tax you pay is statewide rate plus local rate, so the same purchase costs different amounts in different cities within one state.
  • Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—have no statewide sales tax, though some allow local sales taxes.
  • The combined rate (state plus local) can exceed 10 percent in California, Illinois, Washington, and several other states depending on location.

How Statewide and Local Taxes Stack Together

When you see a sales tax rate quoted for a state, that is only the state portion. Your city or county then adds its own rate on top. A shirt that costs $100 in a Tennessee city with a 2 percent local rate would be taxed at 11.55 percent total (9.55 state plus 2 local), bringing the final price to $111.55. The same shirt in a Tennessee city with no local sales tax would cost $109.55.

Some states allow local governments to set their own rates freely. Others cap how high local rates can go, or require voter approval before a city or county can add tax. This is why you cannot assume everyone in Tennessee pays 9.55 percent—you have to check the specific city or county where the purchase happens.

States With No Statewide Sales Tax

Five states do not charge a statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, this does not mean shopping there is always tax-free. Alaska and Montana allow cities and boroughs to charge local sales tax, so some purchases in those states are taxed and others are not, depending on location. Delaware, New Hampshire, and Oregon have no local sales tax either, making them the only three states where most purchases are completely untaxed.

Some of these states make up the lost revenue through other taxes. New Hampshire and Oregon have no sales tax but do tax income. Alaska has no income tax and no statewide sales tax. The tax structure varies widely, so the absence of sales tax does not mean a state is cheaper overall.

States Where Combined Tax Exceeds 10 Percent

Several states regularly see combined sales tax rates above 10 percent when you add local taxes to the statewide rate. California reaches 10.75 percent in some areas. Illinois, Washington, and Oklahoma can all exceed 10 percent depending on the city. Louisiana and Tennessee, already at 9.55 percent statewide, often push past 10 percent once local tax is added.

The highest combined rates in the country appear in specific cities rather than entire states. Some areas in California, Louisiana, and Oklahoma report combined rates of 11 percent or higher. If you are shopping in a major city or a county with high local tax, check the local rate before assuming the statewide number is what you will pay.

Why Sales Tax Rates Vary So Much Between States

States set their own tax policy based on their budget needs and political choices. Some states rely heavily on sales tax to fund schools, roads, and services. Others use income tax or property tax instead. A state with high sales tax might have lower income tax, or vice versa. There is no single reason why Tennessee is higher than California—it reflects different decisions about how to fund state government.

Local governments also make independent choices. A city might add sales tax to fund schools or infrastructure. A county might add tax to pay for a new hospital or jail. Over time, these layers accumulate, which is why some zip codes end up with much higher combined rates than others.

How to Find the Sales Tax Rate for a Specific Location

The statewide rate is easy to find—each state publishes it on its revenue or taxation department website. Finding the exact rate for your city or county requires one more step. Most state tax websites have a lookup tool where you enter a zip code or address and it returns the combined state and local rate for that location. Some retailers also show the tax rate at checkout or on their website before you complete a purchase.

If you are buying online, the tax rate depends on where the item ships, not where you live or where the seller is based. A purchase shipped to an address in Tennessee will be taxed at the Tennessee rate for that zip code, regardless of where the seller operates. If you are buying in person, the tax is based on the store location.

Frequently Asked Questions

Do I pay sales tax on groceries?

It depends on the state. Most states exempt groceries from sales tax or tax them at a lower rate than other items. However, some states tax all groceries at the full rate, and others only exempt certain foods (like unprepared items but not prepared foods). Check your state's rules, as they vary significantly.

Is sales tax the same everywhere in my state?

No. The statewide rate is the same, but local tax varies by city and county. Two people in the same state can pay different total rates depending on their zip code. Use your state's tax lookup tool to find the exact combined rate for your location.

Why do some states have no sales tax?

States choose their own tax structure based on how they want to fund government. States without sales tax often rely more on income tax, property tax, or other revenue sources. Alaska is unusual because it has no income tax and no statewide sales tax, but it funds government through oil revenue and allows some local sales taxes.

Do I have to pay sales tax when I shop online?

Yes, in most cases. Online retailers are now required to charge sales tax based on where the item ships. The rate depends on the destination zip code, not where you live or where the seller is located. A few items may be exempt depending on state rules.

Can a city or county change its sales tax rate?

Yes, but the process varies by state. Some states allow cities to change rates freely. Others require voter approval or have caps on how high local tax can go. If you see a sales tax rate change, it usually means a local government voted to adjust its portion of the tax.