Connecticut is one of the few states that only has a statewide sales tax. If you live in Maryland, collect sales tax based on where your customer lives. All that being said, here are 10 “general rules” of sales tax that can help those of you just starting trying to make sense of sales tax and FBA. Reduce tax risk. Chat with us about available options. Read on to get the inside scoop about the types of sales tax and sales tax laws by state. If you have nexus in Pennsylvania but are located outside of the state, charge customers the 6% tax rate. Individual state and local sales tax information provided by TaxJar. However, business owners should begin prepping for the new law. Washington D.C. does not charge local sales taxes. No matter if you live or run your business in or outside of Nebraska, charge sales tax based on the buyer’s ship-to location. Sales & Use Tax in California. A business or vendor has sales tax nexus in the state of Massachusetts if they have or do one of the following: As of 2017, vendors who make more than $500,000 in sales or have more than 100 transactions in the state annually have economic nexus. You have sales tax nexus in Nebraska if you have any of the following in the state: Under Nebraska law, vendors who make more than $100,000 in sales or more than 200 transactions annually have economic nexus. Illinois has origin-based sales tax. Again, Hawaii does not have a general sales tax. You have sales tax nexus in Illinois if you have one of the following: Under Illinois law, vendors who make more than $100,000 in sales or have more than 200 transactions annually have economic nexus. Oregon does not have sales tax. Pennsylvania state law considers businesses to have sales tax nexus if they have or do one of the following in the state: A business has economic nexus in the state of Pennsylvania if they exceed $100,000 in sales annually. Everything about sales tax is organic: Sales tax rates, rules, and regulations are subject to change from coast to coast. If you own a business in Arkansas, you have sales tax nexus if you have: Under Arkansas law, you have economic sales tax nexus if your business makes more than $100,000 in sales or has 200 or more transactions in the state annually. Ohio uses the origin-based sales tax method. The law states that any online seller who grosses more than $100,000 in sales from buyers is required to do the following: In Colorado, you have sales tax nexus if either of the following is true: Colorado also considers vendors who make more than $100,000 annually to have economic nexus. Sales Tax Rules . If your business is not in Wisconsin, you must still collect sales tax based on the customer’s ship-to location. If your business is based outside of Nevada, charge sales tax based on the buyer’s destination. Where are you required to collect sales tax? Many states collect both a statewide sales tax and local city or county sales taxes as well. Because of this, you must only charge the statewide 7% sales tax to each buyer in Rhode Island. Because states constantly update and amend their sales and use tax laws, see each state’s tax authority website for the most up-to-date and comprehensive information. In a destination-based state, you must collect sales tax based on the buyer’s location. In New Jersey, you have sales tax nexus if you have or do one of the following in the state: New Jersey law states that any vendor who makes more than $100,000 in sales or more than 200 transactions in the state has economic nexus. If your business is in Wisconsin, collect sales tax based on where you’re delivering the item to. You can also get to it by pressing US states,cities and/or zip code buttons and links. Once the law takes effect, remote sellers with revenue exceeding $500,000 in Texas must: If you live in Texas, you must collect sales tax depending on where your business is located. Your office, warehouse, store, or business location, Employees, contractors, salespeople, or other personnel, A regular presence of traveling salespeople or agents, An employee, independent contractor, or representative present in the state for more than two days per year, Delivery of merchandise in vehicles owned by the taxpayer, An office or place of business in the state, A person working for you (e.g., sales rep, agent, contractor, employee), An affiliate (e.g., person who refers potential buyers to your business), Provide a notice that use tax is due on the sale with every transaction to a Colorado buyer, Provide customers who purchased more than $500 in products with an annual summary of their purchases to help them pay use tax. The lowest non-zero state-level sales tax is in Colorado, which has a rate of 2.9 percent. Hawaii also does not have sales tax. The date on which a remote seller must start collecting sales tax varies from state to state. Some customers, such as nonprofits, do not have to pay sales tax in California if they show a valid certificate. If you’re an Oklahoma-based business selling to an Oklahoma customer, charge sales tax based on the customer’s ship-to address. It’s hard to find many things about sales tax that are straight-forward. Regardless of where you’re located, you must collect sales tax from your customers based on their ship-to location. Looking for an easy way to track your state’s sales tax and business transactions? View Rate Changes New Mexico does not currently have any economic nexus laws. When collecting taxes in Colorado, you must collect the full combined sales tax rate at your buyer’s ship-to address. There are many ways to establish sales tax nexus — the connection between a business and state that creates a sales tax collection requirement — and no two state sales tax laws are exactly alike. Scroll through the maps to see the laws affecting sellers in each state. Determining which laws apply to your business is hard, but it’s a crucial step toward compliance. Out-of-state business with sales tax nexus in Kentucky must also charge 6%. This is not intended as legal advice; for more information, please click here. California has the highest state-level sales tax rate, at 7.25 percent.Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. Because there are so many states with sales tax laws in place, it may be easier to remember the states that don’t. Sales tax in Arizona is a little different than other states. As a remote seller, you must collect sales tax, which is at a rate of 4.225%. According to Vermont, you must charge a state sales tax of 6% on the retail sales of tangible personal property. Every other location only uses the statewide 6% sales tax rate. You typically have sales tax nexus in the state of Wyoming if you have: You have economic nexus in the state of Wyoming if you are a vendor who: If you aren’t sure whether you have sales tax nexus, ask yourself the following questions: If you answered “yes” to any of the above questions, you likely have sales tax nexus. Solicit sales in Washington through employees or representatives, Maintain a stock of goods (e.g., inventory), Construct, install, repair, or maintain real or personal property, Make regular deliveries of goods into the state, Have an office, place of distribution, sales or sample room, warehouse, storage place, or another place of business. Kentucky does not have local tax rates. Out-of-state businesses who have no physical presence in Tennessee and don’t meet the threshold are not required to register with the state or collect sales tax. Retailers engaged in business in California must register with the California Department of Tax and Fee Administration (CDTFA) and pay the state's sales tax, which applies to all retail sales of goods and merchandise except those sales specifically exempted by law. Under Missouri law, you have sales tax nexus if you: Missouri currently does not have any economic nexus laws. Now that you have a little background on sales tax, let’s take a look at which states have it. There’s no federal sales tax in the United States. Minnesota has destination-based sales tax. The range of local taxes is also included as a quick reference. Certain business activities can determine if you have sales tax nexus in an area. (e.g., trade shows). Sales taxes are generally collected on all sales of tangible goods (and sometimes services) completed within the state, although several states have started moving toward levying sales taxes on residents who make purchases online as well. You must collect all applicable taxes, and you should generally collect the sales tax rate that applies at the location of the sale. Physical presence nexus: Having employees, inventory, kiosks, offices, stores, trade show attendance, warehouses, or other physical ties to the state may give you an obligation to collect and remit sales tax in these states. Under Hawaii law, a business must collect GET if they meet the threshold of $100,000 in sales or 200 transactions annually. If you live in Nevada, you must collect sales tax based on where your customer lives. Collect sales tax based on your customer’s state and local taxes. If you live in Tennessee, collect sales tax based on where your business is located. The rate change list does not contain rates for all locations. You must also send a summary to the Colorado Department of Revenue, You have an office, distributing house, sales room, warehouse, or another place of business, You have independent contractors or other representatives in Colorado, An employee, independent contractor, or another representative present in the state for more than two days per year, Repairs or alterations of tangible personal property, Rentals, leases, or licenses to use real property, Rentals of short-term living accommodations, Manufacturing or producing goods for sale at retail, Importing goods from any state or country for retail sale, Providing taxable services (e.g., cleaning services), An employee, independent contractor, or representative, Office, warehouse, sales room, or storage place, A salesman, agent, employee, or another representative, An office, warehouse, or place of business, An employee, contractor, salesperson, agent, or representative in Illinois, An employee or independent sales representative in the state, Third parties that install, repair, or service property that is sold to Indiana customers, An office, warehouse, distribution house, or place of business, An employee, contractor, or another representative in the state, Regularly engage in the delivery of products to Iowa, Retailers selling goods at trade shows, craft shows, or festivals, Non-resident contractors performing services in the state, Owned or leased property that is utilized or located in the state, Computer software used by a third party in the state, Participate in craft or trade shows or festivals for 15 or more days per year, The use, consumption, distribution, or storage of tangible property, The lease or rental of any item of tangible property, A store, office, warehouse, repair facility, or another place of business in the state, An employee, salesperson, contractor, or another representative, Ownership of real (e.g., land) or personal property, An office, place of business, or any owned property, An employee present for more than two days per year, A sample or display area (e.g., trade show exhibit), Deliver property or performance of service, Have an office, distribution center, sales room, warehouse, or another place of business in the state, Have a representative, agent, salesperson, or solicitor (both permanent and temporary), Deliver items into Minnesota in your own vehicle, Have an agreement with a solicitor for the referral of Minnesota customers for a commission and your gross receipts are at least $10,000 over the course of 12 months, Have employees or agents of the business provide services in Mississippi, Have an employee, contractor, or another representative present in the state for more than two days per year, Deliver merchandise in Missouri in vehicles you own, Employee, agent, salesperson, or contractor present in the state, Ownership of or goods in a warehouse or storage facility, Receipts from rental or lease of property, An employee, independent contractor, or representative in the state, Delivery of merchandise in Nevada using company vehicles, Delivery of merchandise in New York in a taxpayer-owned vehicle, Employees, independent contractors, agents, or other representatives, Any place of distribution, sales or sample room, warehouse, storage place that you manage, use, or occupy temporarily or permanently, A temporary or permanent office or place of business, Tangible personal property (leased or rented), Have a place of business that’s operated by employees or agents, a member of an affiliated group, or a franchisee, Have employees, agents, representatives, solicitors, installers, repair people, salespeople, or other individuals in Ohio, Have a person in the state for the purpose of receiving or processing orders, Make regular deliveries of tangible personal property into the state, Own tangible personal property that is rented or leased to a consumer in this state, Offer tangible personal property, on approval, to consumers in this state, Own, rent, lease, maintain, or use tangible personal or real property that is located in Ohio, Are registered with the secretary of state to do business, Are licensed by any state agency, board, or commission to do business in Ohio or to make sales to Ohio customers, Make more than $500,000 in sales in the state and use software or content delivery network, Have an office or place of business in the state, Have a salesperson, contractor, installer, or other representative doing business in the state, Have goods in a warehouse, distribution center, or another place of business, Deliver merchandise in Oklahoma in taxpayer-owned vehicles, An employee, independent contractor, or another representative, An employee, representative, contractor, agent, or salesperson present in the state, Goods in a warehouse, sample room, or storage room, Delivery of merchandise to customers in the state using the business’s owned vehicle, Have an employee, independent contractor, or representative, Deliver merchandise in South Carolina in taxpayer-owned vehicles, Have a place of distribution, sales room, warehouse, or storage space, Collect sales tax on sales that ship to Texas, A physical presence in the state (e.g., employees or property), Ownership in a business with a presence in Utah, Make more than $100,000 in sales annually in the state, Have more than 200 transactions in Vermont each year, An employee or independent contractor in the state, More than 12 deliveries or merchandise per year. 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