{"id":57447,"date":"2021-06-15T15:24:28","date_gmt":"2021-06-15T20:24:28","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=57447"},"modified":"2021-06-15T15:24:36","modified_gmt":"2021-06-15T20:24:36","slug":"sales-tax-by-state-2","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/filing\/states\/sales-tax-by-state-2\/","title":{"rendered":"Sales tax by state varies in rates \u2013 Where state sales tax may be less"},"content":{"rendered":"\n

Each state in America is free to set its own tax policy, and, therefore, differences exist between state in regards to sales tax. With this autonomy, states and local municipalities can choose the types of taxes and the tax rate they impose.<\/p>\n\n\n\n

While H&R Block is in the business of helping taxpayers with their income taxes, we can also give you an overview of state sales taxes. In this post, we\u2019ll cover the basics of sales tax \u2013 including what it is, what it pays for, how it\u2019s calculated, states without sales tax, lowest sales tax states, and general state sales tax rates. Read on as we share the details.<\/p>\n\n\n\n

What is state sales tax?<\/h2>\n\n\n\n
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First, we\u2019ll answer, \u201cwhat is state sales tax?\u201d State sales tax is imposed by state and local governments a on certain retail transactions and services. The seller of the goods and services collects sales tax from a consumer when the purchase is made. This requires many businesses to collect sales tax and register for a specific sales tax permit from a state agency.<\/p>\n\n\n\n

States create their own rules around sales tax, and each state can choose specific sales tax exemptions. In some states there is no sales tax on specific purchases like education, food\/beverage, medical purchases, prescriptions, apparel, and more. For example, there is no sales tax on clothing in Minnesota. In some states and local municipalities, sales tax-free weekends or weeks are held. This is common during back-to-school times.<\/p>\n\n\n\n

Additionally, some counties and cities\/municipalities impose additional surtaxes for the sale of specific goods and services.<\/p>\n\n\n\n

What does state sales tax pay for?<\/h2>\n\n\n\n

Sales tax pays for a number of state-related services and programs, including primary and secondary education, state-funded health insurance and social services, transportation, public assistance programs, recreation, police and fire services, public pensions and retirement funds, and more.<\/p>\n\n\n\n

How is state sales tax calculated?<\/h2>\n\n\n\n

State sales tax is determined by multiplying the final purchase price of a good by the established sales tax rate.  That said, there will never be a fixed amount you\u2019ll pay for sales tax. The amount in sales tax you owe is required to appear on a receipt or sales transaction report.<\/p>\n\n\n\n

States without sales tax<\/h2>\n\n\n\n

Let\u2019s get to the good news \u2013 the states without sales tax at a state level are:<\/p>\n\n\n\n