What is Sales tax?
Sales tax is a percentage tax added to the price of taxable goods and services, collected by the seller and remitted to the government. Rates and rules vary by state, county, and city in the US — and what's taxable (a haircut? a SaaS subscription?) differs everywhere. When in doubt, check your state revenue department, not a blog.
In practice
A retailer in a 7% sales-tax area sells a $200 jacket: tax = $14, customer pays $214. The $14 is held separately and filed with the state quarterly.
Do the math in seconds
Billia's free sales tax calculator figures tax and totals instantly.
Open the sales tax calculatorFrequently asked questions
Do freelancers charge sales tax?
Sometimes — several states tax specific services (design, consulting, SaaS). It depends on your state and what you sell; check your state revenue department.
What's the difference between sales tax and VAT?
Sales tax is charged once, at the final sale; VAT is charged at each production stage with credits along the way. The US uses sales tax; most of the world uses VAT.
Where does sales tax go on an invoice?
On its own line after the subtotal, showing the rate: 'Sales tax (7%) — $14.00.' Then the total below it.