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Sales tax by state

In the US, sales tax rates are determined at the state and local levels. There is no overarching national sales tax in the US. In fact, some states don’t have sales tax at all, such as Alaska, Delaware, Montana, New Hampshire, and Oregon.

If you’re selling remotely to other US states, you should check the economic nexus laws to see if you are liable for sales tax there.

State Tax rate Thresholds
Alabama 4% $250,000
Alaska 0% 200 transactions or $100,000
Arizona 5.6% $100,000
Arkansas 6.5% 200 transactions or $100,000
California 7.25% $500,000
Colorado 2.9% $100,000
Connecticut 6.35% 200 transactions and $100,000
Florida 6% $100,000
Georgia 4% 200 transactions or $100,000
Hawaii 4% 200 transactions or $100,000
Idaho 6% $100,000
Illinois 6.25% 200 transactions or $100,000
Indiana 7% 200 transactions or $100,000
Iowa 6% $100,000
Kansas 6.5% $100,000
Kentucky 6% 200 transactions or $100,000
Louisiana 4.45% $100,000
Maine 5.5% $100,000
Maryland 6% 200 transactions or $100,000
Massachusetts 6.25% $100,000
Michigan 6% 200 transactions or $100,000
Minnesota 6.875% 200 transactions or $100,000
Mississippi 7% $250,000
Missouri 4.225% $100,000
Nebraska 5.5% 200 transactions or $100,000
Nevada 4.6% 200 transactions or $100,000
New Jersey 6.625% 200 transactions or $100,000
New Mexico 5.125% $100,000
New York 4% 100 transactions and $500,000
North Carolina 4.75% 200 transactions or $100,000
North Dakota 5% $100,000
Ohio 5.75% 200 transactions or $100,000
Oklahoma 4.5% $100,000
Pennsylvania 6% $100,000
Rhode Island 7% 200 transactions or $100,000
South Carolina 6% $100,000
South Dakota 4.5% $100,000
Tennessee 7% $100,000
Texas 6.25% $500,000
Utah 4.85% 200 transactions or $100,000
Vermont 6% 200 transactions or $100,000
Virginia 4.3% 200 transactions or $100,000
Washington 6.5% $100,000
Washington DC 6% 200 transactions or $100,000
West Virginia 6% 200 transactions or $100,000
Wisconsin 5% $100,000
Wyoming 4% 200 transactions or $100,000

Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.

Frequently Asked Questions

Businesses should collect sales tax only if they have nexus in a state. Sales tax nexus could be:

  • A physical presence (office, employee, storage or warehouse, inventory) in that state.
  • Marketing or sales affiliates that refer customers to your business.
  • Web cookies or click-through ads used on in-state websites.
  • A large volume or number of sales to in-state customers, a.k.a. economic nexus. (See next question!)

Each state has its own rules about nexus and when you’re liable for sales tax, so it’s important to check with local policies. Once you have a nexus, you should register for sales tax there and start collecting it on sales to customers within that state.

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