The sales tax laws within the United States are not subject to federal regulation. Each state controls its base sales tax. Some states impose sales taxes on retail transactions and certain services. Local municipalities and counties may impose excise or surtaxes.
In 2023, Alaska, Delaware, Montana, New Hampshire, and Oregon impose no sales tax. However, some municipalities in these states impose excise taxes or taxes on tourists.
The absence of sales tax in some states matters for consumers and businesses. For consumers, no sales tax means savings, especially on big purchases. Sales tax rates range from 7.25% in California to 2.9% in Colorado. Thirty-eight states allow local taxes on top of state taxes.
As of 2023, nine states—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming—do not tax income. However, Washington taxes some capital gains.
Sales taxes provide states 29.52% of total tax revenue, second only to income tax.
Which US state has lowest sales tax?
Colorado has the lowest state sales tax rate at 2.9%.
Do any states have no sales tax and no income tax?
Yes, Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming have neither a state sales tax nor an income tax.