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United States VAT Rate 2026
United States does not levy VAT — it uses a State and local sales taxes (no federal VAT) system instead, which works differently from the credit-invoice VAT used in most of the world.
No VAT — State and local sales taxes (no federal VAT) applies instead
The United States is the only major economy without a VAT or GST. Instead, 45 states plus DC levy single-stage retail sales taxes, with combined state-and-local rates ranging from 0% (Delaware, Montana, New Hampshire, Oregon, and statewide-exempt Alaska) to over 10% in parts of Louisiana. There is no input-credit mechanism: tax applies once, at the final retail sale, and B2B purchases for resale are exempt via resale certificates. Since the 2018 Wayfair ruling, remote and foreign sellers must register state-by-state once they cross economic nexus thresholds — typically USD 100,000 of in-state sales — making US compliance a 50-jurisdiction patchwork rather than a single registration.
US sales tax rate by state — 2026
| State | State rate | Avg. combined rate |
|---|---|---|
| Alabama | 4.00% | 9.46% |
| Alaska | 0.00% | 1.82% |
| Arizona | 5.60% | 8.52% |
| Arkansas | 6.50% | 9.46% |
| California | 7.25% | 8.99% |
| Colorado | 2.90% | 7.89% |
| Connecticut | 6.35% | 6.35% |
| Delaware | 0.00% | 0.00% |
| Florida | 6.00% | 6.98% |
| Georgia | 4.00% | 7.49% |
| Hawaii | 4.00% | 4.50% |
| Idaho | 6.00% | 6.03% |
| Illinois | 6.25% | 8.96% |
| Indiana | 7.00% | 7.00% |
| Iowa | 6.00% | 6.94% |
| Kansas | 6.50% | 8.69% |
| Kentucky | 6.00% | 6.00% |
| Louisiana | 5.00% | 10.11% |
| Maine | 5.50% | 5.50% |
| Maryland | 6.00% | 6.00% |
| Massachusetts | 6.25% | 6.25% |
| Michigan | 6.00% | 6.00% |
| Minnesota | 6.875% | 8.14% |
| Mississippi | 7.00% | 7.06% |
| Missouri | 4.225% | 8.44% |
| Montana | 0.00% | 0.00% |
| Nebraska | 5.50% | 6.98% |
| Nevada | 6.85% | 8.24% |
| New Hampshire | 0.00% | 0.00% |
| New Jersey | 6.625% | 6.60% |
| New Mexico | 4.875% | 7.67% |
| New York | 4.00% | 8.54% |
| North Carolina | 4.75% | 7.00% |
| North Dakota | 5.00% | 7.09% |
| Ohio | 5.75% | 7.29% |
| Oklahoma | 4.50% | 9.06% |
| Oregon | 0.00% | 0.00% |
| Pennsylvania | 6.00% | 6.34% |
| Rhode Island | 7.00% | 7.00% |
| South Carolina | 6.00% | 7.49% |
| South Dakota | 4.20% | 6.11% |
| Tennessee | 7.00% | 9.61% |
| Texas | 6.25% | 8.20% |
| Utah | 6.10% | 7.42% |
| Vermont | 6.00% | 6.39% |
| Virginia | 5.30% | 5.77% |
| Washington | 6.50% | 9.51% |
| West Virginia | 6.00% | 6.59% |
| Wisconsin | 5.00% | 5.72% |
| Wyoming | 4.00% | 5.56% |
State statutory rate plus the population-weighted average of local sales taxes, as of January 1, 2026 (Tax Foundation). Local rates vary by county and city, so the tax at a specific delivery address may differ from the state average shown. Hawaii's rate is its General Excise Tax; Alaska has no state tax but permits local sales taxes.
Registration and filing
| Registration threshold | No federal registration; state economic-nexus thresholds typically USD 100,000 in sales per state (post-Wayfair) |
Access rates via API
The TaxID API returns current VAT and GST rates for 200+ countries and territories. Use the /api/v1/rates/US endpoint to get United States data programmatically. Responses are cached for 24 hours.
curl https://www.taxid.dev/api/v1/rates/US
# No authentication required for rate lookups
# Response:
# { "country_code": "US", "tax_type": "sales_tax",
# "standard_rate": null, "reduced_rates": [],
# "currency": "USD", "last_updated": "2026-06-12" }About United States Sales Tax
Sources: PwC Worldwide Tax Summaries · Tax Foundation — State and Local Sales Tax Rates, 2026 (accessed Jul 2026)
How US sales tax differs from VAT
If you are used to VAT, the mechanics of US sales tax are genuinely different, not just a different rate. VAT is a multi-stage tax: it is charged and reclaimed at every link in the supply chain, so the tax authority collects a slice at each step and the final consumer bears the cumulative amount. US sales tax is single-stage — it is charged exactly once, at the final retail sale to the end user. A distributor selling to a retailer charges no tax; the retailer presents a resale certificate and buys tax-free, then collects tax only when it sells to the consumer. The practical consequences matter for anyone building billing systems. There is no input tax to reclaim, so there is no VAT-style credit-and-refund cycle and no periodic net settlement. Tax is destination-based in most states — the rate is set by where the buyer takes delivery, not where the seller sits — so a single seller can owe dozens of different rates. And there is no equivalent of a VAT number to validate: US businesses prove their exempt status with a state-issued resale or exemption certificate that the seller must collect and keep on file, not a number you check against a central registry.
Economic nexus: when out-of-state and foreign sellers must register
Before 2018, a seller only had to collect a state's sales tax if it had a physical presence there — an office, warehouse, or staff. The Supreme Court's decision in South Dakota v. Wayfair ended that. States can now require sellers to collect tax based purely on economic activity, and every state with a sales tax has since adopted an "economic nexus" threshold. The most common threshold is USD 100,000 in sales into the state, or 200 separate transactions, measured over the current or prior calendar year — though the exact numbers vary (California and Texas use USD 500,000; some states have dropped the transaction count entirely). Crucially, this applies to foreign sellers too: a company based in Berlin or Bangalore with no US presence can trigger a collection obligation in Illinois or Florida simply by selling enough to buyers there. Once you cross a threshold, you register with that individual state's revenue department, collect its rate, file returns on its schedule, and remit — repeated for every state where you have nexus. Selling through a marketplace such as Amazon or Etsy usually shifts the collection duty to the marketplace under "marketplace facilitator" laws, but your own direct sales still count toward nexus.
States with no sales tax
Five states levy no statewide sales tax, remembered by the acronym NOMAD: New Hampshire, Oregon, Montana, Alaska and Delaware. Four of them are genuinely tax-free at checkout. Alaska is the exception — it has no state-level tax but allows municipalities to impose their own, so boroughs and cities in Alaska do charge sales tax, giving the state an average combined rate of about 1.82%. A further nuance: a handful of states apply a related but distinct tax that behaves like a sales tax at the register. Hawaii's 4% General Excise Tax and New Mexico's gross receipts tax are levied on the seller's revenue rather than the buyer's purchase, but they are typically passed on to consumers and appear as line-item charges, which is why they are grouped with sales taxes in most comparisons.
Sales tax on SaaS, software and digital goods
For software and subscription businesses, US taxability is one of the trickiest areas because there is no national rule — each state decides independently whether SaaS, downloaded software, and digital products are taxable. Cloud-based SaaS is taxable in states such as New York, Texas, Washington, Pennsylvania and about twenty others, and non-taxable in states like California and Florida, with several treating it differently for business versus consumer buyers. Downloaded software, streaming media, and e-books each have their own patchwork of rules on top of that. The result is that a SaaS seller can cross economic nexus in a state, register, and then still need a per-state determination of whether its product is even taxable there before charging anything. Because rates and taxability rules change frequently and are set at the state and local level, teams building billing logic should resolve the current rate and taxability at the point of sale rather than hard-coding values — the TaxID rates API exposes the current metadata for the US and 200+ other jurisdictions so you can keep that logic data-driven.
Rate history
- 2018South Dakota v. Wayfair let states tax remote sellers via economic nexus
Frequently asked questions
What is the VAT rate in the USA in 2026?
There is no VAT in the United States. States levy retail sales taxes instead — combined state and local rates run from 0% to about 10%, and the average combined rate is roughly 7%.
How much is sales tax in the US?
It depends entirely on the state and locality. State statutory rates range from 0% (five states) to 7.25% in California. Once local (county and city) taxes are added, the highest combined average is Louisiana at 10.11%, followed by Tennessee (9.61%) and Washington (9.51%). There is no single national figure.
Which US states have no sales tax?
Five states levy no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon (the "NOMAD" states). Alaska is the exception with teeth — it has no state tax but permits local sales taxes, so its average combined rate is about 1.82%.
Why doesn't the US have a VAT?
Consumption taxation is constitutionally and politically the domain of the states, not the federal government. Repeated federal VAT and national-sales-tax proposals have failed in Congress, leaving each state to set and administer its own sales tax.
Do foreign sellers need to collect US sales tax?
Often yes. After the 2018 South Dakota v. Wayfair decision, physical presence is no longer required. Crossing a state's economic-nexus threshold — commonly USD 100,000 in sales or 200 separate transactions into that state per year — obliges even a foreign seller with no US office to register with that state and collect its tax.
Is US sales tax the same as VAT?
No. VAT is a multi-stage tax collected at every step of the supply chain with an input-credit mechanism; US sales tax is a single-stage tax charged only once, at the final retail sale to the end consumer. Businesses buying for resale avoid it entirely by presenting a resale certificate, so there is no VAT-style credit-and-reclaim cycle.
Related concepts and guides: