Yes, you pay sales tax on online purchases in almost every case. Since a 2018 Supreme Court decision, states can require online sellers and marketplaces to collect sales tax based on where the order ships, and today nearly every retailer does so automatically at checkout. The rate is set by your delivery address, and combined state and local rates around the country run from under 3% to above 10%.
Why Sales Tax Shows Up at Checkout
For years, an online seller only had to charge sales tax in states where it had a physical presence, such as a warehouse or office. That changed in June 2018, when the Supreme Court decided South Dakota v. Wayfair, Inc. The Court held that states can require out-of-state sellers to collect sales tax based on sales volume alone. The South Dakota law at issue applied to sellers delivering more than $100,000 of goods or services into the state, or completing 200 or more separate transactions there annually.1Supreme Court of the United States. South Dakota v. Wayfair, Inc. Every state with a sales tax has since adopted a similar threshold.
On top of that, every sales-tax state has enacted a marketplace facilitator law, which puts the collection duty on the platform itself when you buy from a third-party seller on Amazon, eBay, Etsy, Walmart, and the like.2Tax Foundation. Marketplace Facilitator Laws: Past, Present, and a Better Alternative The platform calculates the rate for your shipping address, adds it at checkout, and remits it to the state. For you, the buyer, the experience is the same as walking into a local store: a tax line item appears on the receipt.
How Much You’ll Pay
Your rate depends on where the package is going, not where the seller sits. State-level rates range from 2.9% in Colorado to 7.25% in California. Most states also let cities, counties, and special districts add their own percentage on top, and the national population-weighted average combining state and local rates is about 7.5%.3Tax Foundation. State and Local Sales Tax Rates, 2026 In some parts of the country, combined rates top 10%.
Do You Pay Tax on Shipping?
That depends on your state. A slight majority treat delivery charges on a taxable item as part of the taxable sale, so the shipping fee is taxed too. Others exempt shipping outright, or exempt it only if the seller lists it separately from the item price on the invoice. There’s no single national rule, which is why your checkout total can look a little different from state to state even for the same order.
When You Won’t See Sales Tax
Five states do not impose a statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon. If your delivery address is in one of them, most online orders arrive tax-free. Alaska is the wrinkle. The state itself charges nothing, but it lets local governments impose their own sales tax, and some Alaska municipalities charge up to 7%. If you’re in one of those localities, you’ll still see a tax charge.
Even in states that do tax sales, certain categories are commonly exempt, and those exemptions apply online the same way they apply in a store:
- Groceries. Most states exempt unprepared food for home consumption. Prepared meals, restaurant food, and snacks often don’t qualify.
- Prescription medication. Nearly every state exempts prescription drugs. Over-the-counter medicine is taxable in many states.
- Clothing. A smaller group of states exempts everyday clothing, sometimes only up to a per-item price cap.
- Resale purchases. A business buying inventory to resell can generally purchase tax-free by providing the seller with a resale certificate.
- Nonprofit and government purchases. Qualifying nonprofits and government agencies can often buy tax-free with an exemption certificate.
Most large e-commerce sites handle these exemptions automatically based on the item and your address. Smaller sellers occasionally get it wrong, so it’s worth checking the tax line if it looks off for a category your state doesn’t tax.
Digital Goods and Subscriptions
Tax treatment of digital purchases is one of the messier corners of the system. States generally split them into three buckets:
- Downloaded software is treated like a tangible product in most states that tax digital goods.
- Software-as-a-Service, the cloud-based subscriptions you access through a browser, is taxed by roughly half the states in some form. Several large states, including California, generally don’t tax SaaS, treating it as a service.
- Digital downloads such as e-books, music, and movies are taxable in most states that tax digital goods, though a few exempt e-books by treating them like printed books.
Streaming services like Netflix or Spotify sit in a gray zone, taxed as digital goods in some states and as services in others. About 25 states now tax SaaS in some form, and the trend has been toward taxing more digital transactions rather than fewer. If you subscribe to several digital services, you may see sales tax on some bills and not others depending on how your state classifies each one.
What Happens When the Seller Doesn’t Collect
Occasionally a seller won’t charge you sales tax. It might be a small shop that falls below your state’s economic nexus threshold, or an individual seller on a platform not covered by a marketplace facilitator law. You still owe the tax. Every state with a sales tax also has a “use tax” that puts the responsibility directly on you, the buyer, for purchases where no tax was collected at the point of sale.
The use tax rate matches the sales tax rate that would have applied locally. Most states provide a line on the individual income tax return where you can report and pay it. Some offer a simplified safe-harbor option that lets you estimate use tax based on your income rather than tracking every untaxed purchase, though the safe harbor typically doesn’t cover big-ticket items above a set dollar amount, which you’d need to report individually.
In practice, few people report use tax on small purchases, and enforcement against consumers for modest amounts is rare. The legal obligation is still there, and it can matter under audit. On a $2,000 laptop from an out-of-state seller who didn’t collect anything, the amount owed is real money. Penalties for unpaid use tax vary but commonly include interest plus a percentage-based penalty that grows the longer the tax goes unpaid.
Buying From Overseas Sellers
Ordering from a foreign retailer adds a separate layer of charges. When goods ship into the United States from abroad, you become the importer, and you’re responsible for any applicable customs duties and fees.4U.S. Customs and Border Protection. Internet Purchases
For years, a “de minimis” exemption let imports valued at $800 or less enter duty-free, which made low-cost purchases from overseas retailers and apps like Temu and Shein essentially tariff-free. That exemption has been sharply curtailed. Starting in 2025, a series of executive orders suspended the duty-free de minimis treatment, first for shipments from China and then more broadly. As of early 2026, the duty-free de minimis exemption has been suspended for shipments regardless of country of origin, meaning virtually all imported goods are now subject to applicable duties, taxes, and fees upon entry.5The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries
State sales or use tax still applies to imported goods on top of federal customs duties. Some international retailers collect the state tax at checkout; others don’t, leaving you with a use tax obligation. Assuming you’ll skip both duties and sales tax on a foreign order is no longer safe.
Sales Tax Holidays
About 19 states run temporary sales tax holidays, typically a weekend or a few days, during which certain purchases are tax-free. The most common is a back-to-school holiday covering clothing, school supplies, and sometimes computers up to a per-item price cap. Several states also run disaster-preparedness holidays covering generators, batteries, and emergency supplies.6Federation of Tax Administrators. 2025 Sales Tax Holidays
These holidays generally apply to online purchases too, as long as the item qualifies and ships to an address in the participating state. Dates and eligible items change year to year, so check your state tax agency’s website before planning a purchase around one.