Sales tax Calculator United States

The United States has no VAT and no federal sales tax, so there are no national standard, reduced or zero rates. Each state sets its own base and rates, and counties and cities add local rates. A seller with no physical presence in a state can still be required to collect its tax after the Supreme Court's South Dakota v. Wayfair decision, which the Streamlined Sales Tax Governing Board describes as allowing states to enforce collection against remote sellers. Twenty-three states are full members of the Streamlined Sales and Use Tax Agreement, with Tennessee an associate member. Members use the same sourcing rules for state and local tax, so a seller knows which jurisdiction's rate to charge.

Exemptions are state by state. New York is an example. Its Tax Law exempts purchases for resale, most food for home consumption, prescription and nonprescription medicines and most services. Clothing and footwear under $110 per item are exempt from the 4% state tax, but a county or city's local tax applies unless that locality elects to exempt them, and an election can change only on 1 March.

A seller that sells without tax to a reseller keeps a resale certificate. In New York this is Form ST-120, given within 90 days of the purchase and accepted in good faith. The seller may refuse it and charge tax, and must keep it at least three years from the due date of the return on which the last sale using it was reported (Tax Bulletin ST-240). The FTC's fee rule lets government charges be left out of a displayed total price (16 CFR § 464.1), but only for tickets and lodging; for other goods, how the tax is shown is a matter of state rules.