Sales Tax USA

About Sales Tax USA

Sales taxes in the United States are imposed by state and local governments. The first state sales tax was enacted by Mississippi in 1930 during the Great Depression. By 2024, 45 states and the District of Columbia have a state sales tax. The states without sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon. Sales tax rates range from 2.9 percent in Colorado to 7.25 percent in California, with local additions pushing combined rates over 10 percent in some cities. The Supreme Court decision in South Dakota v Wayfair 2018 allowed states to require online retailers to collect sales tax, ending the advantage that internet sellers had over physical stores. Sales taxes are generally considered regressive because low income households spend a larger share of income on taxable goods.