Ultimate Sales Tax Guide

Overview: U.S Sales Tax is a state-level tax on the sale of goods and services. Unlike federal taxes, sales tax laws and rates differ for each state in the USA, and can directly impact a business’s success, regardless of size, industry, or stage.

Sales taxes are typically calculated as a percentage of the sale price, and are collected at point of sale.

The responsibility of collecting and remitting sales taxes falls on the business owner. This is a vital step in the tax compliance process for founders.

Sales Tax = Purchase Price/Invoice Value * Sales Tax Rate

Example:

Scenario: “Company A” sells a product to college students that enhances their productivity and workflows using AI.

Customer: Your first customer is based in New York City, and purchases the product from New York State.

Revenue Model: Company A charges a simple $100 for their product.

Sales Tax Calculations:

New York State charges a 8.875% sales tax.
If Company A charges $100/month - the total charge w

Sales Tax Overview 288 words

Understanding sales tax rates can be tricky. But there’s one quick way to help you begin to understand what you should be charging your customers in your home state.

The first thing you need to do is find out if you run your business out of an origin-based state or a destination-based state.

In origin-based states, sales tax should be collected based on where you, the seller, are located.

In destination-based states, sales tax should be collected based on where the buyer is located, meaning the sales tax rate is determined by the buyer’s shipping address or location.

Important Note: Use this information to find the sales tax rate you should be charging in your home-base state only. States have different rules for out-of-state sellers who are selling into their states.

Origin Based States

Arizona
California
Illinois
Mississippi
Missouri
New Mexico
Ohio
Pennsylvania
Tennessee
Texas
Utah and
Virginia

California is unique. It’s a modified o

Origin Based vs Destination Based 902 words

Sales Tax on TPP (Tangible Personal Property)

Tangible personal property (TPP) is any personal property that can be seen, weighed, measured, felt, or touched.

TPP typically does not include real property, however, some states do have sales tax on real estate transactions.

States often interpret the definition of TPP in the broadest possible terms.

For example, some states consider " telecommunication " as tangible personal property, even though most people would not consider this tangible in the strict sense of the word.

This issue has become even more present with the rise of digital technologies, which can blur the line between tangible and intangible.

Sales Tax on Services

Services for sales tax purposes are roughly organized into these four categories:

Business services: These include services for businesses such as advertising, computer services, human resources services, lobby and consulting and payroll services.
Personal services: These include services such

Sales Tax On Different Product Types 520 words

Nexus is the foundation of sales tax registration and compliance, determining whether, when and where a business must collect and remit sales tax.

Nexus refers to the connection or presence that a business has in a particular state that gives that state the authority to require the business to collect and remit sales tax on its taxable sales in that state.

In the context of U.S. sales tax, nexus is established when a business has a physical presence in a state (physical nexus), such as a store, warehouse, or employees, or when it engages in certain types of economic activity in that state (economic nexus).

If a business has no nexus in a particular state, then that state cannot require the business to register for and charge sales tax.

Type of Nexus & Key Triggers

Physical Nexus

Physical nexus is when a business has a tangible connection to a state.

This could be through owning or leasing property, having employees, storing inventory, or maintaining physical operations within th

Understanding Nexus 319 words

Each U.S. state has its own rules on what constitutes economic nexus, which can vary considerably.

Sales threshold: Economic nexus can be triggered by making a certain value of sales in a state during a given time period. Some states also have a trigger based on the number of transactions. A few states require that both triggers are met before the nexus is created.

Reference period: Most states look at the calendar year when determining whether the economic nexus threshold has been reached (e.g. January 1, 2025 to December 31, 2025). However, some states have different reference periods for determining nexus.

Transactions made through a registered marketplace facilitator excluded: To calculate nexus, some states allow sellers to exclude any sales made through a registered marketplace facilitator (e.g. Amazon, Ebay, a marketplace facilitator registered for sales tax who calculates, collects, and remits sales tax on the seller’s behalf).

Most states however require that sellers includ

Economic Nexus Rules 279 words

Software as a service (SaaS) is a model where software is hosted in one place but licensed by subscription for use by customers. For example, some states consider SaaS a service. So, if services are generally taxable in the state – such as in Arizona – then SaaS is considered taxable. In most states, where services aren’t taxable, SaaS also isn’t taxable. Other states, like Washington, consider SaaS to be an example of tangible software and thus taxable. Just like with anything tax-related, each state has made its own rules and laws. This list compiles all SaaS-related state sales tax laws at the time of this writing.

Sales Tax Applicability State Wise

Alabama - Taxable

Alaska - Taxable

Arizona - Taxable

Arkansas - Non Taxable

California - Non Taxable

Colorado - Non Taxable

Connecticut - Taxable

Florida - Non Taxable

Georgia - Non Taxable

Hawaii - Taxable

Idaho - Non Taxable

Illinois - Non Taxable

Indiana - Non Taxable

Iowa - Taxable

Kansas - Non Taxable

Sales Tax on SaaS 311 words

Digital products mean movies, books and eBooks, music, ringtones, photographs and magazine and newspaper subscriptions. SaaS is different as compared to Digital products.

Downloads vs. Digital Products Accessed Online

Some states differentiate between digital products that you download to your own device and digital products that you access online but don’t download. (Expect to see states using language like “transferred electronically” to mean something downloaded or otherwise electronically accessed.)

Example: Some states consider you buying a movie and having it transferred electronically to your possession to be taxable, while “renting” that movie for a limited period of time is not taxable. So in this logic, you could buy and download a movie on a site like Amazon and pay tax on it, or “rent” it for a limited period of time on Amazon Prime Video and not pay tax on it.

Physical Property v. Digital Downloads

Another distinction is the difference in taxability between software, music,

Sales Tax on Digital Products 552 words

Services are roughly organized into 4 categories:

Business services – These include services for businesses such as advertising, computer services, human resources services, lobby and consulting and payroll services.
Personal services – These include services such as dry cleaning, hair care, and tanning salons.
Professional services – These include services provided by accountants, architects, attorneys, and doctors.
Maintenance and repair services – These include services that are provided to tangible personal property (i.e. cars, your house) or improvements to buildings and land (i.e. landscaping).

While services are not subject to sales tax in all states, It’s important to note that exclusions are not absolute. It all depends on the state.

5 U.S. states (New Hampshire, Oregon, Montana, Alaska, Delaware) don’t impose any general, statewide sales tax on goods and services.
4 U.S. states (Hawaii, South Dakota, New Mexico, West Virginia) tax services by default,

Sales Tax on Services 211 words

How many states have passed legislation conforming to the SSUTA

To date, twenty-four of the forty-five states with a general sales and use tax have passed the conforming legislation.

The following states have passed legislation to conform to the Streamlined Sales and Use Tax Agreement: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

Other states have recently contacted Streamlined personnel regarding conforming their laws to the requirements of the Streamlined Sales and Use Tax Agreement, but have not yet enacted the necessary legislation.

What is a Full Member State?

A Full Member State is a state that has been determined by the Streamlined Sales Tax Governing Board to have changed its sales tax laws so that they meet all of the requirements set forth in the SSUTA. The member states

Streamlined Sales Tax 430 words

State Wise Sales Tax Rules

State Wise Sales Tax

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4%.
$250,000 in sales during the prior calendar year.
Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: TPP only.
Services: Not taxable, with a few exceptions. Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable.
SaaS Products: Taxable
When To Register: By January 1 of the year after you reach the threshold.
Alabama State Sales Tax Website

Alabama 88 words

Summary:

Destination Based Sales Tax.
No state-wide General Sales Tax Rate but some areas levy local taxes.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products are generally taxable in local jurisdictions that have instituted a sales tax.
SaaS Products: Taxable
When To Register: The first day of the month after 30 days of being adopted by a city or borough. This refers to when a business must start collecting and remitting sales tax in municipalities (cities or boroughs) that have chosen to adopt local sales tax laws.

Here’s what it means step by step:

Adoption by City or Borough: In Alaska, there is no state-wide sales tax, but certain cities or boroughs may choose to implement their own local sales taxes. When

Alaska 298 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.5%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: Taxable transactions only.
Services: Many services are taxable in Arkansas.
Digital products such as Streaming video, digital audio work, digital audio visual work, and digital books are taxable. Downloaded video games, digital newspapers / magazines, digital photographs / images, digital artwork, and digital greeting cards are not taxable.
SaaS Products: Not Taxable.
When To Register: The next transaction as soon as you meet physical or economic nexus (so as soon as possible).
Arkansas Sales Tax Website

Arkansas 126 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 5.6%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products are taxable.
SaaS Products: Taxable
When To Register: When you meet the threshold you must obtain a TPT (Transaction Privilege Tax) license. The TPT is essentially a form of sales tax, but it is a tax on the privilege of doing business in Arizona, imposed on the seller (rather than directly on the consumer). Businesses must collect this tax from customers and remit it to the Arizona Department of Revenue.
Arizona Sales Tax Website

Arizona 133 words

Summary:

Origin Based Sales Tax. It’s a modified origin state where state, county and city taxes are based on the origin, but district taxes are based on the destination (the buyer).
General Sales Tax Rate: 7.25%.
Over $500,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP only.
Services: Not taxable.
Digital products are tax exempt. The sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable (though if you provide some sort of physical copy or physical storage medium then the sale is taxable).
SaaS Products: Not Taxable
When To Register: The same day you exceed the threshold.
California Sales Tax Website

California 143 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 2.9%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: TPP only.
Services: Not taxable.
Digital products are taxable. Digital goods like music, movies, eBooks, magazines etc. are considered tangible personal property because they are “perceptible by the senses” and are therefore taxable. (Electronic delivery of “legal publication” newspapers are exempt, since physical copies of those same newspapers are exempt).
SaaS Products: Not Taxable.
When To Register: Within 90 days of meeting nexus.
Colorado Sales Tax Website

Colorado 116 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.35%.
Over $100,000 in sales AND 200 transactions during the 12 month period ending 30 September (e.g. October 1 2021 to September 30 2022).
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Many services are taxable in Connecticut.
Digital products are taxable in Connecticut. Effective October 1, 2019, sales of “digital goods,” which includes audio works, visual works, audio-visual works, reading materials or ring tones, which are electronically accessed or transferred, will be subject to sales and use taxes at the 6.35% tax rate.
SaaS Products: Taxable. SaaS for personal use is taxed at the full state rate, but SaaS for business use is only taxed at the rate of 1%.
When To Register: By October 1 of the year you cross the threshold.
[Connecticut Sales Tax Website]

Connecticut 158 words

Summary:

Delaware does not have a state sales tax.

Delaware 9 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: Taxable TPP only.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are tax exempt in Florida. Items sold in digital form are not considered “tangible personal property” and are therefore not taxable. Though, if the item is sold in conjunction with tangible personal property then the entire sale would most likely be subject to Florida sales tax.
SaaS Products: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Florida Sales Tax Website

Florida 131 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: TPP only.
Services: Not taxable.
Beginning January 1, 2024, in Georgia, if you buy a digital product like an e-book or a movie and get to keep it permanently without needing to make ongoing payments, you'll have to pay sales tax on it.

For example, if you purchase an e-book for a one-time fee, that purchase will be taxed.
If you subscribe to a streaming service like Spotify or Netflix, where you make monthly payments to access digital content, that purchase would not be taxed under the new rule in Georgia. The tax only applies to digital products you buy and keep permanently without ongoing payments. In this case, since you're paying regularly f

Georgia 189 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4%.
$100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. They are subject to Hawaii general excise tax, as are most transactions (products and services) in Hawaii.
SaaS Products: Taxable.
When To Register: The month following when you meet the threshold.
Hawaii Sales Tax Website

Hawaii 101 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, unless the service you provide includes creating or manufacturing a product.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc), regardless of the delivery or access method, are taxable when the purchaser has the permanent right to use the product. When the purchaser is leasing or renting the item, it is tax exempt. If the right to use digital music, digital books, digital videos or digital games is conditioned upon continued payment from the purchaser it is not a permanent right of use.
SaaS Products: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
[Idoha Sales Tax Website

Idaho 155 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 6.25%.
$100,000 in sales OR 200 transactions during a 12 month period ending any quarter (e.g. July 1, 2021 to June 30, 2022 or April 1, 2022 to March 31, 2023).

This isn't limited to a calendar year. The 12-month period could be from July 1, 2021 to June 30, 2022 or April 1, 2022 to March 31, 2023, or any similar 12-month period that ends on the last day of a quarter (March 31, June 30, September 30, December 31).

Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: TPP only.
Services: Not taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. Information or data that is downloaded electronically, such as downloaded books, musical recordings, newspapers or magazines, does not constitute the transfer of tangible personal property. These types of

Illinois 198 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 7%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. The definition of digital products includes audio works, audio visual works and books.
SaaS Products: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Indiana Sales Tax Website

Indiana 99 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
$100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Iowa.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable at 6%.
SaaS: Taxable, except when being used for business purposes, then it is exempt.
When To Register: Within 30 days of meeting the nexus criteria.
Iowa Sales Tax Website

Iowa 98 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.5%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Kansas.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable.
SaaS Products: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Kansas Sales Tax Website

Kansas 88 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP and digital property only.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable in Kentucky. They are considered tangible personal property. Audio visual works and e-books are taxable.
SaaS Products: Taxable.
When To Register: Within 60 days of meeting the nexus criteria.
Kentucky Sales Tax Website

Kentucky 108 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4.45%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable in Louisiana.
SaaS Products: Taxable.
When To Register: Within 30 days of meeting the nexus criteria.
Louisiana Sales Tax Website

Louisiana 91 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 5.5%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP, taxable services, and products transferred electronically only.
Services: Not taxable, with a few exceptions.
Digital products are taxable. The sale of a digital product is subject to the general rate of tax if the non-digital or physical form would be subject to sales tax.

For example, the sale of digital music, books, magazines, newspapers, and movies are taxable since the sale of a CD, paper-bound book, DVD, and printed magazines and newspapers are taxable. The sale of a digital publication copy is taxable provided the publication is downloadable to the subscriber’s electronic device. If the subscriber is allowed only to access and view an online version of the publi

Maine 192 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP + taxable services only.
Services: Not taxable, with a few exceptions.
Most digital goods (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable in Maryland as of March 14, 2021.
SaaS: Taxable, except when it is being used for business purposes, in which case it is exempt.
When To Register: First day of the next month after you meet the nexus criteria.
Maryland Sales Tax Website

Maryland 116 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.25%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. This includes “Digital products delivered electronically, including but not limited to music, video, reading materials or ring tones”.
SaaS: Taxable
When To Register: By 1 January of the following year, though you have an additional 2 months if you exceed it between November and December.

If your business exceeds the $100,000 sales threshold during the year (January–October), you must register by January 1st of the following year.
If your business exceeds the threshold between November and December, you have an extra 2 months to r

Massachusetts 167 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Michigan Sales Tax Website

Michigan 81 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.875%.
Over $100,000 in sales OR 200 transactions during any 12 calendar month period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. Digital products are considered tangible personal property (TPP) in the state, though students’ digital textbooks and instructional materials are exempt.
SaaS: Not Taxable.
When To Register: Within 60 days of meeting the nexus criteria.
Minnesota Sales Tax Website(https://www.revisor.mn.gov/statutes/cite/297A.66)(https://www.house.mn.gov/hrd/pubs/ss/ssmstb.pdf)

Minnesota 108 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 7%.
Over $250,000 in sales during any 12 calendar month period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Mississippi.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. This applies whether sold permanently or less-than-permanently and whether or not the seller requires continued payment for access to the products are taxable in Mississippi. School textbooks are not taxable.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Mississippi Sales Tax Website

Mississippi 115 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 4.225%.
Over $100,000 in sales during a 12 month period ending any quarter (e.g. July 1, 2021 to June 30, 2022 or April 1, 2022 to March 31, 2023).

This isn't limited to a calendar year. The 12-month period could be from July 1, 2021 to June 30, 2022 or April 1, 2022 to March 31, 2023, or any similar 12-month period that ends on the last day of a quarter (March 31, June 30, September 30, December 31).

Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: TPP only.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. Entertainment such as music or videos, pictures, newspapers, subscriptions and other electronic products are not considered tangible personal property in Missouri.
SaaS: Not Taxable.
When

Missouri 234 words

Summary:

No sales tax but some areas levy local taxes.

Montana 10 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 5.5%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. This includes the sale of digital music, movies, TV shows, and digital books. Digital codes sold to access digital products are also taxable in Nebraska.
SaaS: Not Taxable.
When To Register: By the end of the calendar month once you meet the nexus criteria.
Nebraska Sales Tax Website

Nebraska 119 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.85%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. This includes audio-visual works, whether sold to the end user permanently or for a limited amount of time.
SaaS: Not Taxable.
When To Register: Within 30 days of meeting the nexus criteria.
Nevada Sales Tax Website

Nevada 104 words

Summary:

No sales tax

New Hampshire 4 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.625%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP, specified digital products, and taxable services only.
Services: Many services are taxable in New Jersey.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable in New Jersey. This includes digital audio-visual works like movies, audio works like music and ringtones and digital books. Streaming services are non-taxable in New Jersey.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
New Jersey Sales Tax Website

New Jersey 124 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 5.125%.
$100,000 in sales during the prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Taxable, they are subject to gross receipts tax.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. Most transactions are subject to New Mexico’s gross receipts tax (the state’s version of sales tax).
SaaS: Taxable.
When To Register: By 1 January of following year.
New Mexico Sales Tax Website

New Mexico 101 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4%.
Over $500,000 in sales AND 200 transactions during any 12 month period ending any quarter (e.g. July 1, 2021 to June 30, 2022 or April 1, 2022 to March 31, 2023).
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: TPP only.
Services: Many services are taxable in New York.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. This includes products transferred electronically such as music, ringtones, movies and books. There are some exceptions when it comes to eBooks.
SaaS: Taxable.
When To Register: Register within 30 days, start collecting tax within 20 days thereafter.
New York Sales Tax Website

New York 133 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4.75%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. Digital audio works, audio visual works, books, magazines, newspapers, newsletters, reports or other publications, photographs or greeting cards delivered electronically are all considered tangible personal property in North Carolina.
SaaS: Not Taxable.
When To Register: Within 60 days of meeting nexus criteria.
North Carolina Sales Tax Website

North Carolina 119 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 5%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: Taxable transactions only.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. Specified digital products including digital audio-visual works, digital audio works, and digital books transferred electronically are considered non-taxable in North Dakota.
SaaS: Not Taxable.
When To Register: Within 60 days or the end of the calendar year.

60 Days: If your business exceeds the $100,000 in sales threshold at any point during the year (for either the current or prior year), you must register for sales tax collection within 60 days from the date you surpass this threshold.

North Dakota 282 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 5.75%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Many services are taxable in Ohio.
Some digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable in Ohio. These include digital audio visual works, digital audio work (including music and ringtones), and digital books and it doesn’t matter if they’re sold for permanent or “less than permanent” use.
SaaS: Taxable - For Business Use. Non Taxable - For Personal Use
When To Register: Next transaction after you meet the nexus criteria.
Ohio Sales Tax Website

Ohio 131 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4.5%.
$100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: Taxable transactions only.
Services: Many services are taxable in Oklahoma.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. This includes digital music, movies, ringtones and books.
SaaS: Not Taxable.
When To Register: By the first of the following month.
Oklahoma Sales Tax Website

Oklahoma 96 words

Summary:

No sales tax

Oregon 4 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: Taxable transactions only.
Services: Many services are taxable in Pennsylvania.
Photos, books, games and other digital downloads are taxable as of August 1, 2016.
SaaS: Taxable.
When To Register: By April 1 of following year.
Pennsylvania Sales Tax Website

Pennsylvania 89 words

Summary:

Over $100,000 in sales OR 200 transactions during the seller’s accounting period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
Digital products: Taxable.
SaaS: Not taxable.
When To Register: Next transaction after you meet the nexus criteria.
Puerto Rico Sales Tax Website

Puerto Rico 66 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 7%.
$100,000 in sales OR 200 transactions during the prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: Non-taxable services excluded.
Services: Not taxable.
Digital goods (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. A 7% sales and use tax will apply to specified digital products starting October 1, 2019. The term “specified digital products” means digital movies, digital TV shows, digital books, digital music, and related items that are streamed or downloaded to computers, phones, or other devices.
SaaS: Taxable.
When To Register: By January 1 of following year.
Rhode Island Sales Tax Website

Rhode Island 128 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable. Digital products are not specifically included in the definition of tangible personal property.
SaaS: Taxable.
When To Register: Within 30 days of meeting nexus criteria.
South Carolina Sales Tax Website

South Carolina 101 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4.5%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable, whether transferred electronically, for temporary or permanent use.
SaaS: Taxable.
When To Register: Next transaction after you meet the nexus criteria.
South Dakota Sales Tax Website

South Dakota 94 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 7%.
$100,000 in sales during any 12 calendar month period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. This includes digital audio visual works, audio works and books.
SaaS: Taxable.
When To Register: Within 90 days of meeting nexus criteria.
Tennessee Sales Tax Website (https://revenue.support.tn.gov/hc/en-us/articles/360057677332-RS-1-Sales-Threshold-for-Out-of-State-Dealers-)

Tennessee 95 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 6.25%.
$500,000 in sales during any 12 calendar month period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Texas.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable, as long as the item would also be taxable if sold in physical format.
SaaS: It is considered part of a data processing service in Texas and is 80% taxable and 20% exempt from sales tax.
When To Register: Within 120 days of meeting nexus criteria.
Texas Sales Tax Website

Texas 118 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 6.1% (Includes a state wide 1.25% levied by local governments in Utah).
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Utah.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. A “product transferred electronically” is considered the same as tangible personal property and taxable if the physical form is also taxable.
SaaS: Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Utah Sales Tax Website

Utah 121 words

Summary:

Origin Based Sales Tax.
General Sales Tax Rate: 5.3% (Includes a state wide 1.% levied by local governments in Virginia).
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: Yes.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are tax exempt. This includes digital products delivered electronically, such as software, downloaded music, ringtones and reading materials which are tax exempt in Virginia.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Virginia Sales Tax Website

Virginia 123 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
$100,000 in sales OR 200 transactions during any 12 calendar month period.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable, whether transferred electronically for permanent or temporary use.
SaaS: Taxable.
When To Register: Within 30 days of the end of the quarter you exceed the threshold.
Vermont Sales Tax Website

Vermont 100 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6.5%.
Over $100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Washington.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. Sales or use tax apply to all digital products, regardless of how they are accessed (downloaded, streamed, subscription service, networking, etc.). This includes downloaded digital goods like music and movies, streamed and accessed digital goods, and digital automated services.
SaaS: Taxable.
When To Register: Within 30 days of meeting nexus criteria.
Washington Sales Tax Website

Washington 125 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: Yes.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable.
As of January 1, 2019, digital goods (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. For purposes of the sales and use tax, D.C. Code § 47-2001(d-1) defines the term “digital goods” to mean digital audio visual works, digital audio works, digital books, digital codes, digital applications and games, and any other otherwise taxable tangible personal property electronically or digitally delivered, whether electronically or digitally delivered, streamed or accessed and whether purchased singly, by subscription or in any other manner, including maintenance, updates and support.
SaaS: Taxable.
Whe

Washington DC (District of Columbia) 163 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 6%.
$100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Taxable, with some exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are not taxable in West Virginia. This includes audio works, audio visual works and books.
SaaS: Taxable.
When To Register: Next transaction after you meet the nexus criteria.
West Virginia Sales Tax Website

West Virginia 100 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 5%.
$100,000 in sales during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Many services are taxable in Wisconsin.
Digital goods (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. This includes audio works, audio visual works, books and codes used to purchase works (digital or physical) by digital means.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Wisconsin Sales Tax Website

Wisconsin 106 words

Summary:

Destination Based Sales Tax.
General Sales Tax Rate: 4%.
Over $100,000 in sales OR 200 transactions during the current or prior calendar year.
Transactions made through a registered marketplace facilitator excluded: No.
Transactions made to a reseller excluded: No.
Limited to certain transaction types: No.
Services: Not taxable, with a few exceptions.
Digital products (movies, eBooks, music, photographs, magazine subscriptions etc) are taxable. This includes digital audio works, audio visual works and books. Specific digital products where the purchaser receives permanent use of the digital product are taxable. If it is less than permanent use, it is not taxable.
SaaS: Not Taxable.
When To Register: Next transaction after you meet the nexus criteria.
Wyoming Sales Tax Website

Wyoming 126 words

Alabama: Makes sales through the marketplace of $250,000 OR more in the preceding 12 months.

Alaska: Gross sales to buyers in Alaska meets or exceeds $100,000 or 200 transactions in the current OR previous calendar year.

Arizona: Aggregate sales within the state, or deliveries to locations within the state, exceeding $100,000 OR 200 transactions in the previous or current calendar year.

Arkansas: Aggregate sales within the state, or deliveries to locations within the state, exceeding $100,000 OR 200 transactions in the previous or current calendar year.

California: All marketplaces are considered to be marketplace facilitators if they both facilitate marketplace sales and are registered, OR are required to register, for a California sales tax permit.

Colorado: Retailers who sell more than $100,000 tangible personal property, services OR commodities in the previous year.

Connecticut: All marketplace retailers are considered marketplace facil

Marketplace Nexus Rules 947 words