Sales Tax Exemptions by State: Complete 2026 Guide
Complete breakdown of which states exempt groceries, clothing, medicine, digital goods, and more.
Not all products are taxed equally. Most US states exempt certain categories of goods from sales tax — but the rules vary dramatically from state to state. This guide covers the most common exemptions and which states apply them.
Groceries & Unprepared Food
32 states fully exempt unprepared groceries from sales tax. This generally includes items like bread, milk, eggs, fresh produce, canned goods, and meat. Prepared food (restaurant meals, deli items) is almost always taxed.
States That Tax Groceries
Full rate
Full rate (7%)
Full rate (4.2%)
Reduced (2%)
Full rate (6%)
Full rate (4.5%)
Reduced (4%)
Reduced (3%)
Clothing & Apparel
Most states fully tax clothing. However, 8 states provide full or partial exemptions:
| State | Clothing Exemption |
|---|---|
| New York | Items under $110 exempt |
| New Jersey | All clothing exempt |
| Pennsylvania | Most clothing exempt |
| Minnesota | All clothing exempt |
| Massachusetts | Items under $175 exempt |
| Connecticut | Items under $1,000 exempt |
| Rhode Island | All clothing exempt |
| Vermont | All clothing exempt |
Medicine & Health Products
Prescription drugs are exempt in all 45 states with sales tax — no exceptions. Over-the-counter (OTC) medicine is more complicated:
- Exempt OTC states: CT, FL, IL, IA, MD, MI, MN, NJ, NY, PA, TX, VT, VA, and others
- Taxed OTC states: CA, CO, GA, IN, KS, NC, OH, OK, WI, and others
Medical devices (crutches, wheelchairs, prosthetics) are exempt in most states. Cosmetics and personal care products (shampoo, toothpaste) are taxable in almost every state.
Digital Goods & Software
This is the most inconsistent category. States are still adapting their tax codes to the digital economy:
Tax Digital Downloads
CT, CO, DC, HI, ID, IN, KS, KY, LA, ME, MD, MN, MS, NE, NJ, NM, NY, NC, OH, PA, RI, SD, TN, TX, UT, VT, WA, WV, WI, WY
Exempt Digital Downloads
AL, AZ, AR, CA, FL, GA, IL, IA, MA, MI, MO, NV, ND, OK, SC, VA
SaaS (Software as a Service) taxation is even more complex — about 20 states tax SaaS, while the rest treat it as a service (exempt). This is a rapidly changing area of tax law.
Other Common Exemptions
Check if your purchase is taxable
Look Up Your Zip Code →Frequently Asked Questions
Are groceries exempt from sales tax?
In most states yes — 32 states fully exempt unprepared groceries. However, Alabama, Mississippi, South Dakota, and others tax groceries at full or reduced rates.
Is clothing taxed in all states?
No. Eight states exempt clothing: CT, MA, MN, NJ, NY, PA, RI, and VT. Some have price thresholds (e.g., NY exempts items under $110).
Are prescription drugs subject to sales tax?
No. All 45 states with sales tax exempt prescription medications. OTC medicines are exempt in some states but taxed in others.
How do I get a sales tax exemption certificate?
Most exemptions are automatic. For business or nonprofit exemptions, file a state-specific exemption certificate with the seller. Each state has its own form.