United States VAT / Sales Tax

The United States does not impose a federal value-added tax (VAT) or national sales tax. Instead, sales taxes are levied at the state and local level. Forty-five states and the District of Columbia impose statewide sales taxes, with rates ranging from 2.9% (Colorado) to 7.25% (California). When combined with local sales taxes, total rates can exceed 10% in some jurisdictions. Five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—have no statewide sales tax, though Alaska allows local sales taxes. Sales taxes generally apply to tangible personal property and some services, with exemptions commonly granted for groceries, prescription medications, and clothing in certain states.