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An illustration of a map and a calculator indicating the states with the highest sales tax.

Top 10 states with the highest sales tax

Running a small business is thrilling, but navigating sales tax means scrunching numbers and understanding regulations. 

When your business sells something, you have to charge sales tax for each purchase. The sales tax rates vary by state and by location within the state. While some states only have sales tax at a state level, others also have different rates depending on your city or county, leading to a higher combined sales tax rate. 

Sales tax rates vary significantly from state to state. Below is a list of the 10 states with the highest sales tax rates in 2024: 

  1. California
  2. Mississippi
  3. Indiana
  4. Rhode Island
  5. Tennessee
  6. Minnesota
  7. Nevada
  8. New Jersey
  9. Arkansas
  10. Kansas
A map that includes the states with the highest sales tax and lowest.

1. California

California’s sales tax rate is 7.25%, and counties, cities, and towns within the state may charge additional tax. The rate combines a base rate of 6% with a mandatory local rate of 1.25%, which goes to the city and county tax officials. In addition to the state tax, you may also have to pay local taxes, which vary depending on your area. The local sales tax ranges from 0% to 3.25%, which can reach 10.5% when combined with the state rate. 

Some goods are exempt from sales tax, like medical supplies and nonprepared food items. Sales tax rates and regulations may change, and the California Department of Tax and Fee Administration publishes updates on them quarterly.

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California sales tax rates:
State sales tax: 7.25%
Local sales tax range: 0%-3.5%
Combined local and state sales tax range: 7.25%-10.75%