US Sales Tax Explained: Rates, Nexus & How to Charge It
US sales tax trips up more online sellers than any other compliance topic, because there is no single national rate — there are thousands of them. This guide covers the essentials: who charges it, how to work out the rate, and the “nexus” rule that decides where you owe. For a quick number, use our Sales Tax Calculator.
What sales tax is
Sales tax is a consumption tax charged on the final sale of goods (and some services) to the end customer. It is set by each state, and often added to by counties, cities and special districts. The seller collects it and remits it to the state.
State base rate vs the real rate
The number most people quote — like California 7.25% or Texas 6.25% — is the state base rate. The rate a customer actually pays is usually state + local, which can be 1–5% higher depending on the exact ZIP code. Our calculator shows the state base rate; for an exact total you need the rate for the specific address.
The five no-sales-tax states
Five states have no statewide sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon (the “NOMAD” states). Note Alaska and Montana still allow some local sales taxes.
Economic nexus: where you owe
Since the 2018 South Dakota v. Wayfair ruling, you can owe sales tax in a state where you have no physical presence, purely from sales volume. Most states set an economic nexus threshold — commonly $100,000 in sales or 200 transactions per year into that state. Cross it, and you must register, collect and remit there.
How to stay compliant
- Know your nexus: track where you have physical presence and where you cross the economic threshold.
- Register before you collect in each state where you owe.
- Charge the destination rate (most states are destination-based for remote sales).
- File on time — frequency depends on your volume.
The bottom line
Sales tax is manageable once you separate the rate (state + local, by address) from the obligation (nexus). Estimate the rate with our Sales Tax Calculator, watch your nexus thresholds, and when volume grows, consider automated tax software. This is a guide, not tax advice.