What's Taxable in Each State

The rate on your receipt is only half the picture. The other half is what the rate actually applies to. Two neighbors living one state apart can pay wildly different totals on the same shopping cart — not because their rates differ, but because one state taxes groceries and clothing while the other exempts them. This guide walks through the big exemption categories and shows how they line up across the 50 states.

Groceries

Groceries — meaning unprepared food bought for home consumption — are the most commonly exempted category in the US. The logic is simple: taxing food hits low-income households harder than anyone else, so most states carve it out. But "groceries" doesn't mean the same thing everywhere.

A can of soup is usually exempt. A hot rotisserie chicken from the same grocery store is usually taxable, because it's "prepared food." Candy is often taxable even in states that exempt groceries, because some legislatures decided that candy is closer to a luxury than a staple. Soda is taxable in most states that exempt other groceries. Bottled water is a toss-up.

Grocery tax treatment is actively shifting. Several states have eliminated or reduced their grocery tax in the last few years, and more reductions are scheduled. If you're reconciling older receipts, check the rate that was in effect on the date of the purchase — the state rates guide goes into how historical rate lookups work.

Clothing

Clothing is the category where interstate differences hit shoppers the hardest, because the exemption states are geographically clustered in the Northeast and Upper Midwest. A family drive from New York City to King of Prussia, Pennsylvania is a classic "sales-tax-free shopping trip" tradition, and the reason it works is that Pennsylvania exempts almost all clothing from sales tax.

The exemptions usually cover everyday clothing — shirts, pants, shoes, outerwear. Things like athletic gear, fur coats, costumes, and formalwear above certain price thresholds are often excluded from the exemption. Accessories (handbags, jewelry, belts) are usually taxable even in exemption states. The details are written into state tax code and they're not always intuitive.

If you're comparing prices across state lines for a big clothing purchase, the reverse calculator is useful for working out what your neighbor's total would actually be on the same shopping cart once the tax is stripped out.

Prescription and Over-the-Counter Medicine

Prescription drugs are exempt from sales tax in every single US state that has sales tax. This is essentially universal policy. The logic is the same as with groceries — taxing essential medicine would be regressive and politically unworkable.

Over-the-counter medicine is where it gets inconsistent. Ibuprofen, cough syrup, allergy pills, antacids — these are taxed or exempt depending on the state:

• OTC medicine exempt: Florida, Louisiana, Maryland, Massachusetts, Minnesota, New Jersey, New York, Pennsylvania, Texas (with some conditions), Virginia, Vermont, and a few others.
• OTC medicine taxable: Most other states, including California, Illinois, Ohio, Michigan, Washington, Arizona, and the rest.

Medical devices (crutches, wheelchairs, glucose monitors, hearing aids) are almost always exempt when prescribed. When not prescribed, treatment varies by state. Eyeglasses and contact lenses are a mixed bag — some states exempt them entirely, others exempt only the prescription lenses themselves while taxing the frames.

Digital Goods and SaaS

This is the fastest-changing category. Fifteen years ago, almost no state taxed Netflix, Kindle books, or Spotify. Today, roughly half of US states do. The push for digital goods taxation accelerated after the 2018 South Dakota v. Wayfair Supreme Court decision cleared the way for states to require online sellers to collect sales tax based on customer location, not seller location.

Here's roughly where things stand in 2025:

The rules in this space are actively changing. Several states have added digital goods to their tax base in the last two years, and more proposals are in various legislatures. If you work in software or digital content and you're charging customers across state lines, this category is worth monitoring closely.

Services

The traditional US rule is: sales tax applies to goods, not services. Getting a haircut, hiring a plumber, or paying a lawyer is usually tax-free even though the underlying rate for goods in that same state might be 8%. But there's been steady erosion of this rule, as cash-strapped states extend sales tax to more service categories.

States that tax a wide range of services — Hawaii (which taxes almost everything under its general excise tax), New Mexico, South Dakota, and West Virginia stand out. Services like legal, accounting, consulting, and repair work can all be taxable depending on the state.

Services commonly taxed in many states — amusement and recreation (movie tickets, amusement parks, gyms), laundry and dry cleaning, personal services like tanning and salons, data processing, and telecommunications.

Services almost never taxed — medical and dental care, legal and financial services in most states, educational services, and religious services.

When you're working out the pre-tax cost of a mixed receipt that includes both goods and services, the reverse tax formula only applies to the taxable portion. Split the receipt before reversing.

Sales Tax Holidays

Many states run annual sales tax holidays — limited windows where specific categories become temporarily exempt. These are mostly used to give back-to-school shoppers a break on clothing and school supplies, but several states have extended the concept to hurricane preparedness, energy-efficient appliances, and other categories.

• Back-to-school holidays — Alabama, Arkansas, Connecticut, Florida, Iowa, Maryland, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and a few others. Usually a weekend in late July or early August. Typical limits: clothing under $100/item, school supplies under $50/item, sometimes laptops under $1,500.
• Hurricane preparedness holidays — Florida, Texas, Virginia, Louisiana. Flashlights, batteries, generators, tarps, and similar supplies are exempt for a few days before hurricane season.
• Energy Star holidays — Texas, Virginia, Florida, Maryland. Qualifying energy-efficient appliances exempt during a specific weekend.
• Second Amendment holidays — Louisiana, Mississippi. Firearms and hunting supplies exempt during a specific weekend.

The exact dates and item limits change every year. State department of revenue websites publish the current year's schedule in spring or early summer. The state calculator pages on this site — Florida, Texas, and others — flag the major holidays for their state.

A Quick Compare: Same Cart, Three States

To make all of this concrete, here's a single shopping cart worked out in three different states.

The cart: $150 in groceries, $80 shirt, $20 ibuprofen, $12 Netflix monthly subscription, $35 haircut. Total at sticker price: $297.

Same items, same sticker, three different totals. This is why a single "what's the sales tax rate" answer isn't enough to predict what you'll actually pay — the exemption rules matter almost as much as the rate itself.

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