Much less than the headline rate implies, because the rate does not apply to most of your budget. Most states exempt groceries and nearly all exempt services, so the taxable share of ordinary household spending is roughly a third. On a normal budget that turns a seemingly large percentage into a few hundred dollars a year, which is real but rarely enough to decide a move.
- The headline rate applies to maybe a third of what a household actually spends, not to all of it.
- Five states levy no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon.
- The highest statewide rates are California, Indiana, Mississippi, Rhode Island, and Tennessee.
- Local add-ons can rival the state rate, and they are not in any statewide figure.
Why the headline rate overstates it
A sales tax applies to taxable goods. Most states exempt groceries entirely or tax them at a reduced rate, and nearly every state exempts services: rent, healthcare, insurance, education, most personal services. Between them those are the majority of a household budget.
This site models the taxable share at about a third of non-housing spending, which is a deliberately conservative middle estimate rather than a precise figure. Multiplying a headline rate by total spending, which is what a quick mental calculation does, overstates the real cost by roughly three times.
What it comes to on a normal budget
California levies 7.25% at state level, which works out at roughly $1,317 a year on a baseline household budget. Tennessee, at 7.00%, comes to about $1,272.
Those are not trivial sums. They are also, for most households, smaller than a single month of the housing difference between two states, which is the honest way to hold them when you are weighing a move.
The states with no sales tax are the interesting edge: Alaska, Delaware, Montana, New Hampshire and Oregon. Oregon in particular is worth knowing about, because it pairs no sales tax with a relatively high income tax, which is close to a clean swap of one instrument for another.
The part no statewide figure includes
Local sales taxes are levied by counties and cities on top of the state rate, and in several states they are large enough to rival it. A statewide number therefore understates the real rate in most of the places people actually live.
The figures on this site are state-level only, deliberately, because there is no single local rate for a state and averaging them would invent a number. Once you have narrowed to a specific city, its combined rate is published and easy to find, and that is the point at which to look.
Who a sales tax actually falls on
Sales tax scales with what you spend, not with what you earn. Households that spend most of their income pay a larger share of it in sales tax than households that save a good deal of theirs.
That is the reverse of how income tax works, and it is why a state swapping one for the other is not a neutral change. Moving from an income-tax state to a sales-tax state is generally better arithmetic the more you earn, and worse the less you do.
One case where it does matter
A large one-off purchase in the year you move, such as a car, appliances or furnishing an empty house, is taxed at the full rate on the full amount, with no exemption to soften it. On several thousand dollars of purchases that is a real number arriving all at once.
It is worth knowing which side of the move those purchases fall on, particularly if one of the two states is among the ones that levy nothing.