How sales tax works
This page explains the mechanics once. Every city and ZIP code page links here rather than repeating it, because the general rules do not change from one town to the next — only the rates and the jurisdictions do.
Who charges sales tax?
Several governments can each levy a share of the same purchase: the state, the county, the city, and special districts such as transit authorities. What you see on a receipt is usually the sum of them, not a single tax.
Who collects sales tax?
The seller collects it from the buyer at the point of sale and remits it to the taxing authorities. In most states the state revenue department collects the local shares alongside its own and distributes them, so a business files once rather than to each city and county separately.
Who actually pays it?
The buyer pays it. The seller is responsible for collecting and remitting it, and is liable if they do not, but the tax is charged to the customer.
Is sales tax included in the advertised price?
In the United States it is normally added at the till rather than included in the shelf price, which is why the total is higher than the ticket. This differs from VAT-style systems, where the displayed price usually includes the tax.
Why do two nearby addresses pay different rates?
Because tax follows jurisdiction boundaries, not distance. One address can sit inside a transit district or a special-purpose district while the address across the road does not. City limits, county lines and district boundaries all cut through neighbourhoods.
Does my ZIP code determine my tax rate?
Not reliably. A ZIP code is a postal delivery route and was never drawn to match tax boundaries. A single ZIP can span two counties or contain both incorporated and unincorporated land, which is why some rates can only be settled by a street address.
Are online purchases taxed?
Usually yes. Most states source a delivered sale to the buyer's delivery address, so the rate is the one at the destination rather than at the seller. Large marketplaces are generally required to collect and remit on behalf of the sellers on them.
Are groceries and restaurant meals taxed the same way?
Frequently not. Many states tax unprepared groceries at a reduced rate or not at all while taxing prepared and restaurant food at the full rate, and some cities add a further tax on prepared food specifically. The treatment is set state by state.
Are services taxed?
It depends heavily on the state. Some tax few services, others tax many. Where a service is taxable it is often sourced to where the service is performed or delivered.
What is commonly exempt?
Purchases for resale, sales to government bodies and many nonprofits, prescription medication, and in many states some groceries and medical equipment. Exemptions are conditional and are set by each state, so an exemption in one state may not exist in the next.
Where our figures come from
Every rate is imported from the authority that levies it — a state comptroller, department of revenue, tax commission, or the municipality's own ordinance — and each is shown on the page with its source and the date it was last verified. Where a ZIP code crosses a tax boundary we show the range rather than picking one figure, and where a rate cannot be traced to a source we say so instead of guessing.
TaxAndTips provides informational estimates from published tax-rate data. Actual tax treatment can depend on the product or service, the exact address, the transaction, exemption status and applicable law. For official obligations, consult the taxing authority or a qualified tax professional.