State sales tax is a [tax](https://www.law.cornell.edu/uscode/text/26/164) imposed by state governments on the sale of certain goods and services. It is a [consumption tax](https://www.law.cornell.edu/wex/consumption_tax) levied as a percentage of the retail price. The sales tax rate varies across states, and even within a state, there may be different rates for different types of products or services. According to the [IRS](https://www.irs.gov/pub/irs-drop/rp-24-40.pdf), the highest combined state and local sales tax rate in 2025 is 8.88% in Tennessee.