The 10 States With the Highest Sales Tax Rates in 2026: What Small Businesses Need to Know

Handling sales tax for a small business is an often-overlooked challenge. Each business must calculate and charge sales tax for each purchase and sale. While that seems straightforward, each state has a different sales tax rate and exempt categories of goods. Furthermore, some states have a statewide tax rate, while others have rates for individual cities or counties.

The following list presents the ten states with the highest sales tax rates in 2026, starting with the highest:

• Louisiana — State: 5.0% | Local: 5.11%
• Tennessee — State: 7.0% | Local: 2.6%
• Washington — State: 6.5% | Local: 3.01%
• Arkansas — State: 6.5% | Local: 2.95%
• Alabama — State: 4.0% | Local: 5.44%
• Oklahoma — State: 4.5% | Local: 4.56%
• California — State: 7.25% | Local: 1.73%
• Illinois — State: 6.25% | Local: 2.63%
• Kansas — State: 6.5% | Local: 2.28%
• New York — State: 4.0% | Local: 4.54%

To help keep your business sales tax compliant, be sure to understand local regulations, obtain the appropriate sales tax license, and submit filings on time. Working with one of our experts can provide clarity and help you manage sales tax more efficiently.