US Receipt Tax Codes Explained
What every letter on your receipt actually means, and how to check you're being charged correctly.
The Most Common US Receipt Tax Codes
| Code | Meaning | Example |
|---|---|---|
| T | Taxable | Clothing, electronics, prepared food |
| N / NT | Non-taxable | Unprepared groceries, prescription drugs |
| F | Food rate (reduced tax) | Bakery bread, dairy products |
| E | Exempt | Medical equipment, educational materials |
| X | No sales tax applies | Tax-exempt organizations, interstate sales |
| H | HSA / FSA eligible | OTC medicines, medical supplies |
| P | Pharmacy / Prescription | Prescription medications |
| S | Store coupon applied | Digital coupon discount |
| A | State-specific tax | Varies by state law |
| B | Reduced rate | Senior discounts, specific items |
| WIC | WIC (Women, Infants, Children) | WIC-eligible items only |
| SNAP | SNAP / Food Stamp eligible | SNAP-eligible groceries |
How to Read a Target Receipt Tax Code
Target uses a simplified 6-code system. Here's what each means on a Target receipt:
State Taxable
Standard state sales tax rate only.
Reduced Rate
Items subject to reduced sales tax rate.
Non-Taxable
Tax-exempt items like unprepared food.
Pharmacy
Prescription drugs and eligible medications.
HSA/FSA Eligible
OTC items covered by health savings accounts.
Food Rate
Special food tax rate in select states.
Want to learn more? View Target receipt examples
Grocery Tax Codes (The Complicated One)
Grocery items are the most tax-coded items on receipts because states have different rules for what's "food" versus what's "taxable merchandise." Most states exempt unprepared groceries from sales tax, but add tax to restaurant and prepared food.
However, the line gets blurry. Is rotisserie chicken "prepared food"? Is a baked good from the grocery store bakery "prepared"? These answers vary by state, and stores use tax codes to track the difference.
Common grocery codes:
- N / NT: Non-taxable: raw vegetables, meat, dairy, dry goods, canned foods
- T: Taxable: prepared foods, deli items, bakery items (if "prepared"), candy, soda
- F: Food rate: reduced tax in states with separate food tax rates
- H: Health items: vitamins, supplements, OTC medications
Pro tip: Your receipt tax codes don't change the amount you pay at the register; that's determined by the store's pre-programmed system. But they help you verify you've been charged correctly, and they provide auditable records for tax purposes.
Frequently Asked Questions
What does T mean on a receipt?
T means the item is taxable: standard sales tax has been applied at the rate for your state and locality.
What does N mean on a receipt?
N or NT means non-taxable. The item is exempt from sales tax (common for unprepared groceries and prescription drugs in most US states).
What does H mean on a receipt?
H indicates the item is HSA or FSA eligible. Since the CARES Act 2020, many OTC medicines qualify without a prescription.
What does P mean on a receipt?
P means pharmacy or prescription. Prescription drugs are exempt from sales tax in almost every US state.
What does F mean on a receipt?
F means food rate: a reduced sales tax rate for qualifying food items in states with a separate lower food tax.
Why does the same item have a different tax code in different states?
Because sales tax rules vary by state, county, and city. The US has over 11,000 individual tax jurisdictions.
Download the Full Tax Codes Dataset
Need the complete tax code reference data? Download our datasets for research and integration:
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