As per Taxlawsinusa, Sales tax rates and exemptions in the USA vary significantly from state to state. Currently, 45 states, the District of Columbia, and several territories impose general sales taxes on the sale or lease of goods and services.
State Sales Tax Rates in USA
Sales tax rates range from 0% in some states like Alaska, Delaware, Montana, New Hampshire, and Oregon, to 7.25% in California. Local governments may also impose additional sales taxes, increasing the total tax rate.
Exemptions on Sales Tax in USA
Most states exempt certain goods and services from sales tax, such as:
– Food for home consumption: Exempt in many states, but some states tax restaurant meals.
– Prescription medications: Exempt in most states.
– Agricultural supplies: Exempt in many states.
– Charitable organizations: Exempt from sales tax on purchases.
– Resale goods: Exempt from sales tax when purchased for resale.
Use Tax
When sales tax is not paid on a purchase, the buyer may be required to self-assess and pay use tax on the item.
Taxable Goods and Services
States vary in what goods and services are subject to sales tax. Some states tax services like telecommunications, while others do not. The taxation of digital goods and services is also inconsistent across states.
Local Variations
Sales tax rates and exemptions can vary significantly within a state, depending on local jurisdictions. Some cities and counties impose their own sales taxes, which can add to the state tax rate.
To determine the specific sales tax rate and exemptions for a particular location, you can use online resources like Avalara’s sales tax calculator.