Take two minutes to learn the fundamentals of sales tax — and when you need to collect it as a seller.
Get a primer on filing, reporting and more.
Find your state’s sales tax requirements below. Click on a state for a detailed guide.
Understanding the A-Z of sales tax is crucial for business owners, whether you’re selling in one state or across the United States. With doola’s US sales tax map (shown above), you can quickly find the information you need for each state, including tax rates, resale certificate rules, and registration processes.
Below, we break down everything you need to know about sales tax in the US, including how it works, how to register, and what it means for e-commerce businesses.
Sales tax is a consumption-based tax imposed on the sale of goods and services. It’s collected at the point of sale and then remitted to the state’s tax authority.
Each state sets its own rules, meaning sales tax rates, exemptions, and collection requirements can vary.
As a business owner, it’s your responsibility to determine whether you need to collect sales tax, register for a permit, and file returns on time to stay compliant.
Currently, 45 US states and Washington, D.C. impose a statewide sales tax, while Alaska, Delaware, Montana, New Hampshire, and Oregon do not have a general sales tax.
However, local jurisdictions in some states (like Alaska) may still impose sales taxes.
Sales tax is typically calculated based on several factors, including the state’s base sales tax rate, local tax rates at the county, city, or district level, the type of product or service being sold (as some items, like groceries, may be taxed at a lower rate or exempt), and the location of the buyer and seller, which determines whether origin-based or destination-based taxation applies.
Since each state has different rules for calculating sales tax, it’s essential to review your specific state’s guidelines.
If you run an e-commerce business, you may be required to collect sales tax in certain states based on economic nexus laws. Nexus refers to a connection between your business and a state, which determines whether you’re obligated to collect and remit sales tax there.
Some of the common triggers for sales tax nexus include:
If your business sells online, it’s essential to know where you need to collect sales tax to stay compliant.
Sales tax in the US is never a one-size-fits-all game. It depends on what you sell, where you sell it, and how your business is structured.
Let’s explore the different scenarios to help you understand your tax obligations better.
As online shopping continues to thrive, sales tax regulations for e-commerce businesses have become more complex. Here’s what you primarily need to know:
Staying on top of these legal obligations is crucial to avoid compliance pitfalls and unexpected penalties.
The digital economy has introduced unique sales tax challenges, with taxability varying widely by state. Here’s what sellers should know:
Bottom line, knowing where your customers are and how their states treat digital sales is critical.
Dropshipping typically adds another layer of complexity to sales tax compliance. As your supplier handles order fulfilment, determining who is responsible for collecting and remitting sales tax isn’t always straightforward.
Let’s break it down for you:
Since dropshipping involves multiple parties across different locations, sales tax compliance requires extra diligence. That said, keeping track of varying state laws and tax responsibilities can be complex, but having a streamlined system in place can help you stay compliant without the hassle.
For businesses with physical storefronts, collecting sales tax is more straightforward but still varies by location. In this case, there are two main categories to consider:
While understanding these sales tax obligations is crucial, business owners must always stay proactive, as US sales tax laws are constantly evolving.
A resale certificate allows businesses to purchase goods tax-free when they intend to resell them, preventing double taxation since the final buyer pays sales tax at the point of purchase.
As a retailer, you may need to provide a valid resale certificate to suppliers to avoid paying sales tax on inventory, verify resale certificates from customers claiming tax-exempt status for resale purchases, and follow state-specific requirements for accepting and maintaining resale certificates.
Each state has different rules on how to use and validate these certificates, so be sure to check your state’s regulations.
Explore the US sales tax map and click on any state to learn key details about resale certificates, including; eligibility requirements for obtaining a resale certificate, the step-by-step process to apply in that specific state, how sellers can properly accept and validate resale certificates, common pitfalls to avoid and potential state-specific penalties, and state tax regulations and exemptions that apply to sellers.
For each state, we also provide expert insights on staying up to date with evolving tax laws and ensuring full compliance with doola.
Before collecting sales tax, you must register for a sales tax permit in the states where you have nexus. This typically involves:
Some states charge a fee for registration, while others offer free permits. Be sure to check the requirements in each state where you plan to operate.
Click on any state in the sales tax map to explore the step-by-step process for registering your sales tax permit, including: who qualifies for a sales tax permit in that state, how to apply and meet state-specific requirements, and state-specific regulations and mistakes to avoid.
We also cover frequently asked questions related to sales tax permits in every state and how to file your returns with doola’s expert services.
Every state has its own rules and regulations for sales tax collection, reporting, and compliance. To navigate these requirements, click on a state in the sales tax map for a detailed breakdown of key tax obligations. This includes information on taxable products and services, who is required to collect sales tax, steps to obtain a sales tax permit, accurate tax calculation methods, common exemptions, remote seller and marketplace rules, and potential audit triggers specific to each state.
Each state guide also answers your top sales tax questions and outlines how doola helps sellers stay compliant, from securing permits to handling filings and ensuring you meet ongoing state regulations.
Yes, if your non-US business has nexus in a US state, you may be required to collect and remit sales tax. Nexus can be triggered by:
Even if your business operates from outside the US, check the specific sales tax laws of each state where you have customers.
You need to register for a sales tax permit before you start collecting sales tax. Registration is required when:
Each state has different rules, so confirm the specific threshold and process in states where you sell.
Managing multi-state sales tax compliance involves:
Tools like doola’s bookkeeping and tax automation services can help simplify this process.
Sales tax rates vary by state, county, and city. To calculate correctly, identify if the state has origin-based or destination-based tax rules. Next, use a sales tax software (like doola) to apply the correct rate based on the buyer’s location. You also need to consider additional local tax rates in some states.
Most states have destination-based rules, meaning you must charge the rate where the buyer is located.
Your filing frequency depends on:
States assign a filing frequency when you register for a sales tax permit. Always check your state’s deadlines and file on time to avoid penalties.
A sales tax audit can be triggered by:
Keeping accurate records and detailed bookkeeping (which doola can help with) reduces the risk of audits.
Missing a deadline can result in late fees and interest penalties, revocation of your sales tax permit, and even potential audits
To avoid penalties, set reminders for tax deadlines or use automated tax filing services.
No, shipping taxability varies by state. Some states tax shipping charges, while others do not.
Check individual state laws to determine how to handle shipping tax in your business.
If a customer returns a product and was charged sales tax, you may need to:
Keeping detailed transaction records ensures proper tax adjustments.
Your sales tax amount will depend on the state and local tax rates, product type (some items are tax-exempt), and whether you sell through a marketplace (which may collect tax for you).
Always use a sales tax calculator or automation tool like doola to ensure accurate tax collection.
If you sell through Amazon, eBay, Etsy, or Shopify, they may collect and remit sales tax on your behalf. However, some states still require you to file a “zero return” even if the marketplace collects tax. Again, if you sell on your own website, you are responsible for tax collection
Check marketplace policies and state requirements to stay compliant.
Yes, but taxability varies by state. Some states tax e-books, software, and online courses, streaming services and memberships, and downloadable products.
Other states do not tax digital goods. Always check state laws if you sell digital products.
To streamline bookkeeping and stay sales tax compliant:
By staying organized and automating tax management, you can focus on scaling your e-commerce business hassle-free.
Sales tax compliance doesn’t have to be overwhelming. doola simplifies the process by helping businesses:
✔ Register for sales tax permits in any state
✔ Understand economic nexus and tax obligations
✔ Manage filings and stay up to date with tax deadlines
✔ Avoid penalties and maintain compliance
With doola’s sales tax guide, you’ll find state-specific information on tax rates, filing deadlines, exemptions, and more. All designed to help you streamline your tax compliance process.
Explore our interactive sales tax map now to access tax rules for your state. Need expert support?
Book a demo and let doola take care of your sales tax needs.
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