The price on store tags in the U.S. is often not your final cost. Most states add sales tax at checkout. This tax varies from 4% to over 10% depending on your location. Always budget a little extra when shopping, since the price tag rarely matches what you will pay at the register.

What is sales tax?

It’s a government fee added when you buy certain items. Each state decides what gets taxed. Some states tax clothes, others don’t. Food taxes also differ. Some states tax prepared meals but not basic groceries like bread or fruit. The same purchase can have mixed rules too—for example, a state might tax soda but not bottled water.

Where you shop matters.

Sales tax amounts vary by state. Delaware has no sales tax. Other states without sales tax include Oregon, Montana, and New Hampshire. Cities like Chicago or Los Angeles add local taxes on top of state rates, so the same item can cost different amounts depending on where you buy it. Your receipt shows the exact tax amount as a separate line, which is a good way to understand what you were charged for.

What about online shopping?

Online shopping adds tax based on your shipping address, not the location of the store. Most major retailers calculate this automatically at checkout, so the final price you see before paying already includes tax.

What about tipping?

Tipping at restaurants is different from sales tax. Some people determine the tip amount by doubling the tax amount.