Shopping in one of the states with the lowest sales tax rates can mean saving money. However, how much you save depends on where in the state you shop and what you buy. That's because some localities impose sales tax rates of their own and items that are taxable in some states might not be taxable in others.
A sales tax is often imposed on retail goods and services, though some states may grant a few exemptions on groceries and prescription drugs. As a revenue driver, localities may impose an additional tax rate to collect funds for roads, schools, local fire and police departments, or other public services.
That being said, let’s dive into our list of the 10 states with the lowest sales taxes.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lowest sales tax states in the U.S.
Keep in mind that localities (cities and counties) in some states can add sales tax separate from the statewide tax rate. So, rankings for states with the lowest sales tax are based on the average combined local and state tax rates.
Note: The sales tax rates used in this story are based on 2024 data from the Tax Foundation.. This list does not include the four reported states with no sales tax or average combined local taxes.
Washington D.C. sales tax
State sales tax: 6%
Average local sales tax: 0.00%
Average combined sales tax: 6%
The District of Columbia makes this list, thanks to the lack of local sales taxes. Shoppers in D.C. will pay a 6% sales tax rate regardless of which part of the district they shop in.
Other good things to know about D.C. sales tax:
- Groceries and prescription drugs are tax-exempt.
- Some items in Washington D.C., such as restaurant meals and vehicle rentals are taxed at a rate higher than 6%.
Maryland sales tax
State sales tax: 6%
Average local sales tax: 0%
Average combined sales tax: 6%
One nice thing about tax in Maryland is that you can travel anywhere in the state and not worry about paying a different sales tax rate. It’s 6% everywhere since counties and cities do not levy their own taxes. Your groceries and prescription drugs aren’t taxable, but you’ll need to pay the 6% tax on clothing and motor vehicle purchases.
Other good things to know about Maryland sales tax:
- Alcoholic beverages are taxed between $0.09 and $1.50 per gallon in Maryland.
- Vacationers could face higher sales taxes since short-term rental cars are taxed at 11.5%.
Kentucky sales tax
State sales tax: 6%
Average local sales tax: 0%
Average combined sales tax: 6%
With a 6% average combined sales tax rate, Kentucky sales tax ties with three other places on this list. You won’t need to pay any sales tax on groceries or prescription drugs. However, you will pay sales tax when you make motor vehicle and clothing purchases, but that is the case for most states in the US.
Other good things to know about Kentucky sales tax:
- Last year, three new categories became subject to sales tax. These include jewlery repair, private investigating and even parking.
- On the bright side, Kentucky income tax was slashed from 4.5% to 4% for the 2024 tax year.
Michigan sales tax
State sales tax: 6%
Average local sales tax: 0%
Average combined sales tax: 6%
Michigan is another state with a 6% sales tax rate. The Michigan sales tax is lower for some home energy necessities, like electricity, natural gas and home heating oil, which are taxed at 4% for residential customers.
Other good things to know about Michigan sales tax:
- The statewide sales tax rate hasn't changed in nearly 30 years.
- Groceries and prescription drugs are tax-exempt.
- Clothing and motor vehicle purchases are taxable.
Virginia sales tax
State sales tax: 5.3%
Average local sales tax: 0.471%
Average combined sales tax: 5.771%
Virginia repealed its portion of sales tax on groceries, but a 1% local grocery tax applies in most areas. Local sales tax on everything else can reach as high as 2.7% in some parts of the Commonwealth, meaning that some Virginians pay an 8% tax rate on fully taxable items.
Other good things to know about Virginia sales tax:
- Personal hygiene products (including diapers) are taxable but at a reduced rate of 1%.
- Prescriptions are tax-exempt.
- There is no sales tax on over the counter medication.
- You'll need to pay Virginia sales tax on clothing.
Wisconsin sales tax
State sales tax: 5%
Average local sales tax: 0.696%
Average combined sales tax: 5.696%
The sales tax rate in some parts of Wisconsin are higher than they were last year due to recently enacted Milwaukee sales tax increases. But prescription drugs are tax-exempt statewide. You won’t need to pay Wisconsin sales tax on groceries, either.
Other good things to know about Wisconsin sales tax:
- The state put an end to sales tax on groceries 17 years ago.
- Wisconsin hasn’t repealed its tax on motor vehicles or clothing though, so you’ll still pay state and local tax on these purchases.
Maine sales tax
State sales tax: 5.5%
Average local sales tax: 0%
Average combined sales tax: 5.5%
Grocery staples are tax-exempt in Maine, but the state doesn’t include some healthy snacks like seeds or dried fruit as staples, so you’ll need to pay Maine sales tax on those. And even though Maine doesn't impose sales tax on most fruits, there is a tax on wild blueberries. Wild blueberries processed in the state come with a tax rate of 1 ½ cents per pound.
Other good things to know about Maine sales tax:
- The state put an end to sales tax on groceries 17 years ago.
- Wisconsin hasn’t repealed its tax on motor vehicles or clothing though, so you’ll still pay state and local tax on these purchases.
Wyoming
State sales tax: 4.0%
Average local sales tax: 1.441%
Average combined sales tax rate: 5.441%
Wyoming ranks as the state with the third lowest sales tax rate in the country. The Cowboy State imposes a 4% sales tax on all of your purchases across its 23 counties. However, there’s good news: groceries and prescription drugs are exempt from the tax. Localities may impose an additional sales tax but it can’t surpass 2%. Still, a 6% maximum Wyoming sales tax would make our list.
Other good things to know about Wyoming:
- The maximum local tax rate is 2%
- Groceries and prescription drugs are exempt from the state’s sales tax
- Wyoming is one of the states with the lowest gasoline tax rates at just 24 cents per gallon.
Hawaii sales tax
State sales tax: 4%
Average local sales tax: 0.5
Average combined sales tax: 4.5%
Hawaii has a complex sales tax system with many different levels (county, city, transportation and special purpose districts). Sales tax in Hawaii is passed on to consumers in the final price of products. Businesses often charge more for the products to ensure they don’t lose money since the tax is based on their gross receipts. There is some more disappointing news. You’ll need to pay tax on groceries, which already cost more than the national average.
Other good things to know about Hawaii:
- Prescription drugs are not taxable.
- You still need to pay tax on over the counter medications.
- Clothing and motor vehicle purchases are taxable.
Alaska sales tax
State sales tax: 0%
Average local sales tax: 1.821%
Average combined sales tax: 1.821%
There is currently no state sales tax in Alaska. However, localities in the state can impose their own sales taxes, and the average local sales tax rate in Alaska has increased from 1.76% to 1.821% over the last year.
Other good things to know about Alaska sales tax:
- Groceries are subject to local sales taxes.
- Alaska has a maximum sales tax rate of 7.5%.
Related Content
-
What to Learn from Corporate Insiders' TradesWhen corporate insiders buy or sell, it can offer clues on whether you should do the same.
-
Quiz: Test Your Financial LiteracyTry your hand at these three questions designed to gauge your knowledge of the ABCs of personal finance. In a survey, only 43% of Americans answered correctly.
-
Tax Pros: Is Someone Fraudulently Using Your IRS PTIN?Tax Filing An unmonitored preparer tax identification number (PTIN) can lead to serious issues.
-
Are You a Renter? You Could Save on TaxesTax Breaks With these tax savings at your fingertips, rent may be more affordable
-
2025 Open Enrollment: Some DACA Recipients Can Purchase Affordable Care Act Health InsuranceOpen Enrollment Your eligibility to purchase health insurance from the federal marketplace may have changed. Here's what you need to know.
-
Holiday Office Party Taxes: Know Before You GoTax Tips The IRS could tax your gifts from Christmas raffles, Secret Santa, and White Elephant. Here’s how.
-
New Mexico Small Business Saturday Tax Holiday 2024Tax Holiday Here's how you can save on taxes during New Mexico’s Small Business Saturday.
-
Holiday Shopping Tax Tips for Business OwnersTax Deductions Before hitting the sales, businesses should know these key deductions and look out for overspending.
-
Tax Credit vs. Tax Deduction: What’s the Difference?Tax Breaks Your guide to tax deductions and credits, how the IRS treats them differently, and how they impact your tax bill.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
