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US Taxes Explained

US Taxes

**Note: This guide is for merchants who sell in the United States. It's your responsibility to consult with local tax authorities or a tax professional to verify that you charge your customers the correct tax rates, and to ensure you file and remit your taxes correctly.

Determine Your Tax Liability

Before you set up your US taxes, you need to determine your tax liability, which means whether you're required to collect tax from your customers and remit tax to a state tax authority.

If you're a US-based merchant, then you potentially have tax liability in your own state because of physical nexus (where you live and where product is shipped from; see more below). If you frequently sell products to customers in a specific state, then you potentially have tax liability there because of economic nexus (when you exceed a certain threshold of sales; see more below), whether or not you're based in the United States.

In the United States, the sales tax that you should charge is affected by several factors:

  • The location that your product is shipped from
  • The location that your product is shipped to
  • Where you're registered to collect tax
  • Item taxability
  • Buyer exemptions

Nexus

Nexus, or a connection between your store and a US state, determines whether you potentially have tax liability there. Nexus can be physical or economic.

Physical Nexus

**Note: If you're a merchant in the United States, then this means that there's at least one state where you have physical nexus and might be liable for taxes: the state in which your store is based.


Generally, physical nexus occurs when you have a physical presence in a state, such as a store, warehouse, or employees. Some states have a broader definition of physical nexus, and might include any of the following:

  • solicitation of sales
  • fulfillment services
  • presence of inventory

If you're not sure whether your activities outside your own state count as having physical nexus, then consult with state tax authorities or a local tax professional.

Economic Nexus

**Note: Economic nexus rules apply to all merchants with customers in the United States, whether or not you have physical nexus there. This includes both US and non-US merchants.

Economic nexus occurs when you exceed a certain threshold (amount) of sales (see more below) to customers in a specific state.

In June 2018, the Supreme Court of the United States ruled that states can require online sellers to collect sales tax based on the volume or value of transactions into a state, also known as economic nexus. For information about how this ruling might affect your business, refer to the Shopify blog post Online Sales Tax: A Guide to Economic Nexus & Ecommerce.

The sales threshold that determines whether you have nexus is different for each state. Refer to the state tax reference table (see below) to determine whether your sales into a state might constitute economic nexus. If you think you might have economic nexus in a state, then consult with state tax authorities or a local tax professional.

Marketplaces

A marketplace is a website where multiple sellers offer their products. Some states include sales in marketplaces for the purposes of determining economic nexus, while others do not. The state tax reference table (see below) provides state-by-state information on whether marketplaces are included in nexus calculation.

**Note: Made By Her only has Nexus in the state of California at this time and therefore the only automatic taxes we will be charging for are on orders where the customer resides in California.

Register for Taxes

After you've determined where you need to charge tax in the United States, you can register with the state tax authorities. The authority to contact is different for each state, and the method of registering might differ. The state tax reference table (see below) provides state-by-state contact information for tax authorities.

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US Taxes Reference

The United States does not charge a federal sales tax. Instead, sales tax is calculated according to state, county, and municipality, according to physical or economic nexus (see above). This section is a general guide to US taxes and doesn't replace any official government information or regulations. If you're not sure about anything related to your taxes, then contact US state tax authorities or a tax professional.

If you determine that you need to charge sales tax in one or more states, then you need to contact each of the relevant agencies and register with them. The process varies depending on where your business is based, where you sell, and individual government requirements.

Determining you tax liabilities

Whether you need to charge sales tax is based on nexus (see above), which means a connection between your business and a state. If you have nexus in a particular state, then you probably need to charge sales taxes there. Nexus can be physical or economic.

Tax Liability Expiry

Falling below the threshold for nexus in a particular state, whether physical or economic, might not terminate your tax liability immediately. Some states have tax policies based on the idea that the behavior that created nexus, such as advertising or sales staff, continues to generate sales for some time after the behaviour stops. This concept is known as trailing nexus or residual nexus.

The following states have formal trailing nexus rules:

State Trailing nexus rules
California Merchants have tax liability for the quarter the merchant stops having nexus, and for the following quarter.
Michigan After the merchant stops having nexus, merchants have tax liability for the remainder of the month, and for the following eleven months.
Minnesota After four days of behavior that creates nexus, merchants have tax liability for the remainder of the month, and for the following eleven months.
Texas Merchants have tax liability for twelve months after the merchant stops having nexus.
Washington After the merchant stops having nexus, merchants have tax liability for the remainder of the year, and for the following year.


Other states have more subjective rulings which state that nexus continues until the behavior that created nexus stops generating sales. If you believe that you no longer have nexus in a specific state, then contact the state tax authority before you stop charging tax to your customers there.

Tax Sourcing

The tax rates that you charge are affected by whether your state is an origin state or a destination state.

Sales tax for interstate sales, which are sales from one state to a different state, are typically based on destination tax rules. Some states have rules that determine tax for intrastate sales, which are sales within the same state, based on origin tax rules.

Destination States

In a destination state, the sales tax you charge is based on the address of your customer.

  • If you have no nexus in the state of the shipping address, then no tax is charged.

  • If you have nexus in the state of the shipping address, then the customer's location is used to determine taxes.

Origin States

In an origin state, the sales tax you charge is based on your location's nexus.

  • If you have no nexus in the state of the shipping address, then no tax is charged.

  • If you have a physical nexus in the state of the shipping address, then the location of your nexus is used to determine taxes. If you have a nexus but no physical location, then the customer's location is used to determine taxes.

Remote Seller Rules

A remote seller is a merchant that isn't physically located in a particular state, but has economic nexus there. Most states have rules determining what defines a remote seller. If you're not sure whether selling in a particular state creates economic nexus for you, then you should consult with US state tax authorities or a local tax professional.

Notice and Report States

Notice and report tax laws exist in some states to ensure that customers pay a use tax. Use tax is a sales tax on purchases that a customer makes from outside their state of residence, on which no tax was collected in the state where it was purchased. If you do not have nexus in these states but you sell to customers there, then those customers are responsible for paying a use tax to their state, rather than paying sales tax to you.

Each state that uses notice and report tax laws has different rules, but in general, if your sales to customers in another state pass a certain threshold then you might be required to do the following:

  • Create a notice in your store that indicates customers might need to pay use tax.
  • Create a notice in your checkout process that indicates customers might need to pay use tax.
  • Send an annual notice to customers spending over a certain amount in your store, reminding them that they owe use tax.
  • Send an annual notice to the state, reporting information about customers that owe use tax.

The following states use notice and report tax laws:

Alabama Colorado Kentucky Louisiana Oklahoma
Pennsylvania Rhode Island South Dakota Tennessee Vermont
Washington


Because requirements and thresholds vary by state, you should check with US state tax authorities or a local tax professional to ensure you're following notice and report laws correctly.

State Tax Reference

**Caution: The following reference guide is for informational purposes only, and is not intended to replace professional tax advice. If you have further questions about whether tax legislation applies to you, then you should contact US state tax authorities or a tax professional.

There are five states that don't have a state-wide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Although there aren't any taxes levied at the state level, you still might need to collect municipal taxes.

You can refer to the below reference for more information about individual states, including special tax rules, information on state tax liability and the time periods of sales data that are considered when calculating liability.

You don't need to register with all of these agencies, only those that apply to you.

Alabama

State tax website Sourcing Taxable shipping Local taxes
Alabama Department of Revenue Destination No Yes


Special tax rules in Alabama

Alabama uses notice and report laws (see above).

While Alabama is classified as a destination state, it's also defined as a home rule state. This means that some local jurisdictions might have differing tax rules. If you need to collect sales tax in one of these jurisdictions, then you can use their simplified seller use tax (SSUT) to register with them them to collect and remit taxes.

If you're not sure whether you need to register, then contact US state tax authorities or a local tax professional.

Tax Liability in Alabama

Nexus is determined using sales from the previous calendar year, and is based on the revenue made from sales to customers in Alabama. Digital products and sales on marketplaces such as Amazon are not included. You might have nexus in Alabama if you met the following condition in the previous calendar year:

  • Your revenue from sales to customers in Alabama was $250,000 or greater.

If you're not sure whether you're required to remit taxes in Alabama, then contact US state tax authorities or a local tax professional.

Alaska

State tax website Sourcing Taxable shipping Local taxes
Alaska Department of Revenue Destination Yes Yes


Special tax rules in Alaska

While Alaska has no state sales tax, it's defined as a home rule state. This means that some local jurisdictions might charge a destination-based rate if the seller has nexus in that state. If you need to collect sales tax in one of these jurisdictions, then you need to register with them to collect and remit taxes.

You don't need to register in all of these jurisdictions, only with those that apply to you. If you're not sure whether you need to register in a particular jurisdiction, then contact US state tax authorities or a local tax professional.

If you're a remote seller (see above) and you need to collect sales tax in one of these jurisdictions, then you can use the Alaska Remote Seller Sales Tax Commission (ARSSTC) Uniform Code to register with them them to collect and remit taxes. If you're not sure whether you need to register, then contact US state tax authorities or a local tax professional.

Tax Liability in Alaska

Alaska doesn't have economic nexus laws at the state level, but some local jurisdictions do. Economic nexus requirements are implemented through the ARSSTC, which has a centralized system for tax registration and reporting.

If you're not sure whether you're required to remit taxes in Alaska, then contact US state tax authorities or a local tax professional.

Arizona

State tax website Sourcing Taxable shipping Local taxes
State of Arizona Department of Revenue Origin No Yes


Special tax rules in Arizona

If you're out-of-state, selling to customers in Arizona, and have nexus there, then you need to register with the local jurisdictions you're selling into and charge destination taxes.

Arizona has implemented a single system for registering and filing taxes in its jurisdictions. Taxpayers are required to file and pay for all tax jurisdictions, including the city of Phoenix, to the state.

Tax liability in Arizona

Nexus is determined using sales from the previous calendar year or the current calendar year, and is based on the amount of revenue from sales to customers in Arizona. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Arizona if you met any of the following conditions in the previous calendar year or in the current year:

  • Your revenue from sales to customers in Arizona was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Arizona, then contact US state tax authorities or a local tax professional.

Arkansas

State tax website Sourcing Taxable shipping Local taxes
Arkansas Department of Finance and Administration Destination Yes Yes


Tax liability in Arkansas

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Arkansas and the number of sales made to customers in Arkansas. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Arkansas if you met any of the following conditions in the previous calendar year or in the current year:

  • Your revenue from sales to customers in Arkansas was $100,000 or greater.
  • You made 200 or more sales to customers in Arkansas.

If you're not sure whether you're required to remit taxes in Arkansas, then contact US state tax authorities or a local tax professional.

California

State tax website Sourcing Taxable shipping Local taxes
California Department of Tax and Fee Administration Hybrid No Yes


Special tax rules

California uses a mixture of origin and destination sourcing rules. State, county and city taxes are based on the origin of the purchase (the seller), but district taxes and total tax rates are based on the destination (the buyer).

In California, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice. If you add handling fees, then shipping becomes taxable. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

When you enter your tax registration information for California, you can choose whether to charge taxes according to destination rules or hybrid origin rules. The default setting is Destination.

**Caution: The default setting of Destination is appropriate for most sellers, but which sourcing you should choose is based on how you've registered with California. It's your responsibility to ensure that you're collecting the correct tax. If you’re not certain what to charge, then consult with US state tax authorities or a tax professional.

Tax liability in California

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in California. Digital products and sales on marketplaces such as Amazon are not included. You might have nexus in California if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in California was $500,000 or greater.

If you're not sure whether you're required to remit taxes in California, then contact US state tax authorities or a local tax professional.

Colorado

State tax website Sourcing Taxable shipping Local taxes
Colorado Department of Revenue Destination Yes Yes


Special tax rules

Colorado is separated into districts. If you're a seller in Colorado, then you need to charge state tax as well as any district taxes in your buyer's location.

Colorado has special registration and filing requirements in certain localities, while other localities may participate in the Sales and Use Tax System (SUTS) that allows simplified local registration and filing.

In Colorado, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Colorado uses notice and report laws (see above).

Tax liability in Colorado

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Colorado. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Colorado if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Colorado was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Colorado, then contact US state tax authorities or a local tax professional.

Connecticut

State tax website Sourcing Taxable shipping Local taxes
Connecticut State Department of Revenue Services Destination Yes No


Tax liability in Connecticut

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Connecticut and the number of sales made to customers in Connecticut. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Connecticut if you met all of the following conditions in a twelve month rolling period:

  • Your revenue from sales to customers in Connecticut was $250,000 or greater.
  • You made 200 or more sales to customers in Connecticut.

If you're not sure whether you're required to remit taxes in Connecticut, then contact US state tax authorities or a local tax professional.

Delaware

State tax website Sourcing Taxable shipping Local taxes
Delaware Tax Center Not applicable No No


Special tax rules

Delaware does not charge sales tax.

District of Columbia

State tax website Sourcing Taxable shipping Local taxes
DC Office of Tax and Revenue Destination Yes No


Tax liability in the District of Columbia

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in the District of Columbia and the number of sales made to customers in the District of Columbia. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in the District of Columbia if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in the District of Columbia was $100,000 or greater.
  • You made 200 or more sales to customers in the District of Columbia.

If you're not sure whether you're required to remit taxes in the District of Columbia, then contact US state tax authorities or a local tax professional.

Florida

State tax website Sourcing Taxable shipping Local taxes
Florida Department of Revenue Destination Yes Yes


Special tax rules

In Florida, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Tax liability in Florida

**Note: Economic nexus tax laws came into force in Florida on July 1, 2021.


Nexus is determined using sales from the previous calendar year, and is based on the amount of revenue from sales to customers in Florida. Digital products and sales on marketplaces such as Amazon are not included. You might have nexus in Florida if you met the following condition in the previous calendar year:

  • Your revenue from sales to customers in Florida was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Florida, then contact US state tax authorities or a local tax professional.

Georgia

State tax website Sourcing Taxable shipping Local taxes
Georgia Tax Center Destination Yes Yes


Tax liability in Georgia

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Georgia and the number of sales made to customers in Georgia. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Georgia if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Georgia was $100,000 or greater.
  • You made 200 or more sales to customers in Georgia.

If you're not sure whether you're required to remit taxes in Georgia, then contact US state tax authorities or a local tax professional.

Hawaii

State tax website Sourcing Taxable shipping Local taxes
State of Hawaii Department of Taxation Destination Yes Yes


Tax liability in Hawaii

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Hawaii and the number of sales made to customers in Hawaii. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Hawaii if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Hawaii was $100,000 or greater.
  • You made 200 or more sales to customers in Hawaii.

If you're not sure whether you're required to remit taxes in Hawaii, then contact US state tax authorities or a local tax professional.

Idaho

State tax website Sourcing Taxable shipping Local taxes
Idaho State Tax Commission Destination No Yes


Special tax rules

If you don't have a location in Idaho, but have economic nexus there, then you only charge the state tax at the destination.

Tax liability in Idaho

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Idaho. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Idaho if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Idaho was $100,000 or greater.
  • You made 200 or more sales to customers in Idaho.

If you're not sure whether you're required to remit taxes in Idaho, then contact US state tax authorities or a local tax professional.

Illinois

State tax website Sourcing Taxable shipping Local taxes
Illinois Department of Revenue Origin Yes Yes


Special tax rules

Illinois follows origin sourcing rules for sales within the state. For out-of-state sales, destination sourcing applies.

In Illinois, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice and there is a choice of means to get the product, such as local pickup. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Tax liability in Illinois

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Illinois and the number of sales made to customers in Illinois. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Illinois if you met any of the following conditions in a twelve month rolling period:

  • Your revenue from sales to customers in Illinois was $100,000 or greater.
  • You made 200 or more sales to customers in Illinois.

If you're not sure whether you're required to remit taxes in Illinois, then contact US state tax authorities or a local tax professional.

Indiana

State tax website Sourcing Taxable shipping Local taxes
Indiana Department of Revenue Destination Yes No

Tax liability in Indiana

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Indiana and the number of sales made to customers in Indiana. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Indiana if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Indiana was $100,000 or greater.
  • You made 200 or more sales to customers in Indiana.

If you're not sure whether you're required to remit taxes in Indiana, then contact US state tax authorities or a local tax professional.

Iowa

State tax website Sourcing Taxable shipping Local taxes
Iowa Department of Revenue Destination No Yes


Special tax rules

Taxes in Iowa are calculated on a destination basis. If you're located in the state and have nexus there, then you need to charge taxes based on the destination of the buyer. If you're an out-of-state seller, then only the state tax rate applies.

Tax liability in Iowa

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Iowa. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Iowa if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Iowa was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Iowa, then contact US state tax authorities or a local tax professional.

Kansas

State tax website Sourcing Taxable shipping Local taxes
Kansas Department of Revenue Destination Yes Yes


Tax liability in Kansas

**Note: Economic nexus tax laws came into force in Kansas on July 1, 2021.


Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Kansas. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Kansas if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Kansas was $100,00 or greater.

If you're not sure whether you're required to remit taxes in Kansas, then contact US state tax authorities or a local tax professional.

Kentucky

State tax website Sourcing Taxable shipping Local taxes
Kentucky Department of Revenue Destination Yes No


Special tax rules

Kentucky uses notice and report laws (see above).

Tax liability in Kentucky

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Kentucky and the number of sales made to customers in Kentucky. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Kentucky if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Kentucky was $100,000 or greater.
  • You made 200 or more sales to customers in Kentucky.

If you're not sure whether you're required to remit taxes in Kentucky, then contact US state tax authorities or a local tax professional.

Louisiana

State tax website Sourcing Taxable shipping Local taxes
Louisiana Department of Revenue Destination No Yes


Special tax rules

Louisiana is generally a destination state, but has some particular rules regarding the state's jurisdictions. Different jurisdictions might have different rules on what counts as nexus based on physical or economic presence. If you're not sure whether you have nexus in a particular jurisdiction, then contact a local tax authority.

In Louisiana, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice and there is a choice of means to get the product, such as local pickup. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Louisiana uses notice and report laws (see above).

Tax liability in Louisiana

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Louisiana and the number of sales made to customers in Louisiana. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Louisiana if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Louisiana was $100,000 or greater.
  • You made 200 or more sales to customers in Louisiana.

If you're not sure whether you're required to remit taxes in Louisiana, then contact US state tax authorities or a local tax professional.

Maine

State tax website Sourcing Taxable shipping Local taxes
Maine Revenue Services Destination No No


Special tax rules

In Maine, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice and there is a choice of means to get the product, such as local pickup. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Tax liability in Maine

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Maine and the number of sales made to customers in Maine. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Maine if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Maine was $100,000 or greater.
  • You made 200 or more sales to customers in Maine.

If you're not sure whether you're required to remit taxes in Maine, then contact US state tax authorities or a local tax professional.

Maryland

State tax website Sourcing Taxable shipping Local taxes
Comptroller of Maryland Destination Yes No


Special tax rules

In Maryland, shipping is not taxable if the actual cost of shipping is listed on a separate line on the invoice. If you add handling fees, then shipping becomes taxable. You can choose whether you want to charge taxes on shipping when you set up your taxes and enter your sales tax ID. If you're not sure whether you should charge taxes on shipping, then leave this option on the default setting and check with US state tax authorities or a local tax professional.

Tax liability in Maryland

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Maryland and the number of sales made to customers in Maryland. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Maryland if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Maryland was $100,000 or greater.
  • You made 200 or more sales to customers in Maryland.

If you're not sure whether you're required to remit taxes in Maryland, then contact US state tax authorities or a local tax professional.

Massachusetts

State tax website Sourcing Taxable shipping Local taxes
Massachusetts Department of Revenue Destination No No


Special tax rules

In Massachusetts, clothing products with a price under $175 are exempt from state sales tax, and clothing products with a price of over $175 will collect tax only on the amount that their price is over $175. For example, an item of clothing with a price of $200 will be taxed on $25, because the first $175 is not taxable.

Tax liability in Massachusetts

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Massachusetts. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Massachusetts if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Massachusetts was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Massachusetts, then contact US state tax authorities or a local tax professional.

Michigan

State tax website Sourcing Taxable shipping Local taxes
Michigan Department of Treasury Destination Yes No


Tax liability in Michigan

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Michigan and the number of sales made to customers in Michigan. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Michigan if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Michigan was $100,000 or greater.
  • You made 200 or more sales to customers in Michigan.

If you're not sure whether you're required to remit taxes in Michigan, then contact US state tax authorities or a local tax professional.

Minnesota

State tax website Sourcing Taxable shipping Local taxes
Minnesota Department of Revenue Destination Yes Yes


Tax liability in Minnesota

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Minnesota and the number of sales made to customers in Minnesota. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Minnesota if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Minnesota was $100,000 or greater.
  • You made 200 or more sales to customers in Minnesota.

If you're not sure whether you're required to remit taxes in Minnesota, then contact US state tax authorities or a local tax professional.

Mississippi

State tax website Sourcing Taxable shipping Local taxes
Mississippi Department of Revenue Origin Yes Yes


Tax liability in Mississippi

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Mississippi. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Mississippi if you met the following condition in a twelve month rolling period:

  • Your revenue from sales to customers in Mississippi was $250,000 or greater.

If you're not sure whether you're required to remit taxes in Mississippi, then contact US state tax authorities or a local tax professional.

Missouri

State tax website Sourcing Taxable shipping Local taxes
Missouri Department of Revenue Origin No Yes


Special tax rules

Missouri is an origin state for sellers with nexus and a location within the state. If you're selling to customers in the state and have economic nexus, but do not have a location in-state, you're required to charge use tax.

Montana

State tax website Sourcing Taxable shipping Local taxes
Montana Department of Revenue Not applicable No No


Special tax rules

Montana does not charge sales tax.

Nebraska

State tax website Sourcing Taxable shipping Local taxes
Nebraska Department of Revenue Destination Yes Yes


Tax liability in Nebraska

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Nebraska and the number of sales made to customers in Nebraska. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Nebraska if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Nebraska was $100,000 or greater.
  • You made 200 or more sales to customers in Nebraska.

If you're not sure whether you're required to remit taxes in Nebraska, then contact US state tax authorities or a local tax professional.

Nevada

State tax website Sourcing Taxable shipping Local taxes
State of Nevada Department of Taxation Destination No Yes


Special tax rules

Shipping is not taxable in Nevada if it's stated as a separate line item. If the prices of your products include shipping or handling, then taxes need to be charged.

Tax liability in Nevada

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Nevada and the number of sales made to customers in Nevada. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Nevada if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Nevada was $100,000 or greater.
  • You made 200 or more sales to customers in Nevada.

If you're not sure whether you're required to remit taxes in Nevada, then contact US state tax authorities or a local tax professional.

New Hampshire

State tax website Sourcing Taxable shipping Local taxes
New Hampshire Department of Revenue Administration Not applicable No No


Special tax rules

New Hampshire does not charge sales tax.

New Jersey

State tax website Sourcing Taxable shipping Local taxes
New Jersey Treasury Division of Taxation Destination Yes No


Tax liability in New Jersey

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in New Jersey and the number of sales made to customers in New Jersey. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in New Jersey if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in New Jersey was $100,000 or greater.
  • You made 200 or more sales to customers in New Jersey.

If you're not sure whether you're required to remit taxes in New Jersey, then contact US state tax authorities or a local tax professional.

New Mexico

State tax website Sourcing Taxable shipping Local taxes
New Mexico Taxation and Revenue Destination Yes Yes


Tax liability in New Mexico

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in New Mexico. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in New Mexico if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in New Mexico was $100,000 or greater.

If you're not sure whether you're required to remit taxes in New Mexico, then contact US state tax authorities or a local tax professional.

New York

State tax website Sourcing Taxable shipping Local taxes
New York State Department of Taxation and Finance Destination Yes Yes


Special tax rules

In New York, clothing products, footwear products, and items used to repair clothing products with an individual price under $110 are exempt from state sales tax. For example, two items with a combined price of $200 will each be exempt from sales tax, but one item with an individual price of $110 will be subject to sales tax.

New York uses quarters to determine tax liability that differ from other jurisdictions. Tax quarters in New York are the following:

  • March, April, and May
  • June, July, and August
  • September, October, and November
  • December, January, and February

Tax liability in New York

Nexus is determined using sales from the previous four tax quarters, and is based on the amount of revenue from sales to customers in New Yotk and the number of sales made to customers in New York. Sales on marketplaces such as Amazon are included, but digital products are not. You might have nexus in New York if you met all of the following conditions in the previous four tax quarters:

  • Your revenue from sales to customers in New York was $500,000 or greater.
  • You made 100 or more sales to customers in New York.

If you're not sure whether you're required to remit taxes in New York, then contact US state tax authorities or a local tax professional.

North Carolina

State tax website Sourcing Taxable shipping Local taxes
North Carolina Department of Revenue Destination Yes Yes


Tax liability in North Carolina

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in North Carolina and the number of sales made to customers in North Carolina. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in North Carolina if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in North Carolina was $100,000 or greater.
  • You made 200 or more sales to customers in North Carolina.

If you're not sure whether you're required to remit taxes in North Carolina, then contact US state tax authorities or a local tax professional.

North Dakota

State tax website Sourcing Taxable shipping Local taxes
North Dakota Office of State Tax Commissioner Destination Yes Yes


Tax liability in North Dakota

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in North Dakota. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in North Dakota if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in North Dakota was $100,000 or greater.

If you're not sure whether you're required to remit taxes in North Dakota, then contact US state tax authorities or a local tax professional.

Ohio

State tax website Sourcing Taxable shipping Local taxes
Ohio Department of Taxation Origin Yes Yes


Special tax rules

Ohio follows origin sourcing. However, if a seller is based outside of Ohio, sells to customers in the state, and has economic nexus in Ohio, then they should charge destination sales tax based on the customer's location.

Tax liability in Ohio

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Ohio and the number of sales made to customers in Ohio. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Ohio if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Ohio was $100,000 or greater.
  • You made 200 or more sales to customers in Ohio.

If you're not sure whether you're required to remit taxes in Ohio, then contact US state tax authorities or a local tax professional.

Oklahoma

State tax website Sourcing Taxable shipping Local taxes
Oklahoma Tax Commission Destination No Yes


Special tax rules

Oklahoma uses notice and report laws (see above).

Tax liability in Oklahoma

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Oklahoma. Digital products and sales on marketplaces such as Amazon are not included. You might have nexus in Oklahoma if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Oklahoma was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Oklahoma, then contact US state tax authorities or a local tax professional.

Oregon

State tax website Sourcing Taxable shipping Local taxes
Oregon Department of Revenue Not applicable No No


Special tax rules

Oregon does not charge sales tax.

Pennsylvania

State tax website Sourcing Taxable shipping Local taxes
Pennsylvania Department of Revenue Origin Yes Yes


Special tax rules

Pennsylvania uses notice and report laws (see above).

Tax liability in Pennsylvania

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Pennsylvania. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Pennsylvania if you met the following condition in a twelve month rolling period:

  • Your revenue from sales to customers in Pennsylvania was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Pennsylvania, then contact US state tax authorities or a local tax professional.

Puerto Rico

Tax website Sourcing Taxable shipping Local taxes
Finance Department of Puerto Rico Destination No Yes


Tax liability in Puerto Rico

Nexus is determined using sales from the previous calendar year or the current calendar year, and is based on the amount of revenue from sales to customers in Puerto Rico and the number of sales made to customers in Puerto Rico. Digital products and sales on marketplaces such as Amazon are not included. You might have nexus in Puerto Rico if you met either of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Puerto Rico was $100,000 or greater.
  • You made 200 or more sales to customers in Puerto Rico.

If you're not sure whether you're required to remit taxes in Puerto Rico, then contact US state tax authorities or a local tax professional.

Rhode Island

State tax website Sourcing Taxable shipping Local taxes
State of Rhode Island Division of Taxation Destination Yes No


Special tax rules

In Rhode Island, clothing and footwear products with an individual price of $250 or less are exempt from state sales tax, and only the incremental amount above $250 is subject to sales tax. For example, if a suit costs $275, then the tax applies only to $25.

Rhode Island uses notice and report laws (see above).

Tax liability in Rhode Island

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Rhode Island and the number of sales made to customers in Rhode Island. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Rhode Island if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Rhode Island was $100,000 or greater.
  • You made 200 or more sales to customers in Rhode Island.

If you're not sure whether you're required to remit taxes in Rhode Island, then contact US state tax authorities or a local tax professional.

South Carolina

State tax website Sourcing Taxable shipping Local taxes
South Carolina Department of Revenue Destination Yes Yes


Tax liability in South Carolina

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in South Carolina. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in South Carolina if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in South Carolina was $100,00 or greater.

If you're not sure whether you're required to remit taxes in South Carolina, then contact US state tax authorities or a local tax professional.

South Dakota

State tax website Sourcing Taxable shipping Local taxes
South Dakota Department of Revenue Destination Yes Yes


Special tax rules

South Dakota uses notice and report laws (see above).

Tax liability in South Dakota

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in South Dakota and the number of sales made to customers in South Dakota. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in South Dakota if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in South Dakota was $100,000 or greater.
  • You made 200 or more sales to customers in South Dakota.

If you're not sure whether you're required to remit taxes in South Dakota, then contact US state tax authorities or a local tax professional.

Tennessee

State tax website Sourcing Taxable shipping Local taxes
Tennessee Department of Revenue Origin Yes Yes


Special tax rules

In Tennessee, whether or not shipping is taxable is dependent on whether or not the product itself is taxable. If your product is taxable, then you need to charge tax on shipping. If the product isn't taxable, then you don't need to charge tax on shipping.

Tennessee uses notice and report laws (see above).

Tax liability in Tennessee

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Tennessee. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Tennessee if you met the following condition in a twelve month rolling period:

  • Your revenue from sales to customers in Tennessee was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Tennessee, then contact US state tax authorities or a local tax professional.

Texas

State tax website Sourcing Taxable shipping Local taxes
Texas Comptroller of Public Accounts Origin Yes Yes


Special tax rules

Texas is an origin state for sellers that have both a physical presence and economic nexus in the state. If you have nexus in Texas but do not have a physical location there, then Texas is considered a destination state.

Tax liability in Texas

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Texas. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Texas if you met the following condition in a twelve month rolling period:

  • Your revenue from sales to customers in Texas was $500,000 or greater.

If you're not sure whether you're required to remit taxes in Texas, then contact US state tax authorities or a local tax professional.

Utah

State tax website Sourcing Taxable shipping Local taxes
Utah State Tax Commission Origin No Yes


Special tax rules

If you do not have nexus in Utah, your customers in that state are responsible for filing their purchases as a use tax on their income tax. If you want, you can register with the state of Utah to collect this tax.

Tax liability in Utah

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Utah and the number of sales made to customers in Utah. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Utah if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Utah was $100,000 or greater.
  • You made 200 or more sales to customers in Utah.

If you're not sure whether you're required to remit taxes in Utah, then contact US state tax authorities or a local tax professional.

Vermont

State tax website Sourcing Taxable shipping Local taxes
Vermont Department of Taxes Destination Yes Yes


Special tax rules

Vermont uses notice and report laws laws (see above).

Tax liability in Vermont

Nexus is determined using sales from a twelve month rolling period, and is based on the amount of revenue from sales to customers in Vermont and the number of sales made to customers in Vermont. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Vermont if you met any of the following conditions in a twelve month rolling period:

  • Your revenue from sales to customers in Vermont was $100,000 or greater.
  • You made 200 or more sales to customers in Vermont.

If you're not sure whether you're required to remit taxes in Vermont, then contact US state tax authorities or a local tax professional.

Virginia

State tax website Sourcing Taxable shipping Local taxes
Virginia Tax Origin No Yes


Special tax rules

Shipping is not taxable in Virginia if it's stated as a separate line item. If the prices of your products include shipping, then taxes need to be charged.

Virginia is considered an origin state, but out-of-state sellers should apply destination rules for determining tax.

Tax liability in Virginia

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Virginia and the number of sales made to customers in Virginia. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Virginia if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Virginia was $100,000 or greater.
  • You made 200 or more sales to customers in Virginia.

If you're not sure whether you're required to remit taxes in Virginia, then contact US state tax authorities or a local tax professional.

Washington

State tax website Sourcing Taxable shipping Local taxes
Washington State Department of Revenue Destination Yes Yes


Special tax rules

Washington uses notice and report laws (see above).

Tax liability in Washington

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Washington. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Washington if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Washington was $100,000 or greater.
  • You made 200 or more sales to customers in Washington.

If you're not sure whether you're required to remit taxes in Washington, then contact US state tax authorities or a local tax professional.

West Virginia

State tax website Sourcing Taxable shipping Local taxes
West Virginia State Tax Department Destination Yes Yes


Tax liability in West Virginia

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in West Virginia and the number of sales made to customers in West Virginia. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in West Virginia if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in West Virginia was $100,000 or greater.
  • You made 200 or more sales to customers in West Virginia.

If you're not sure whether you're required to remit taxes in West Virginia, then contact US state tax authorities or a local tax professional.

Wisconsin

State tax website Sourcing Taxable shipping Local taxes
State of Wisconsin Department of Revenue Destination Yes Yes


Special tax rules

In Wisconsin, whether or not shipping is taxable is dependent on whether or not the product itself is taxable. If your product is taxable, then you need to charge tax on shipping. If the product isn't taxable, then you don't need to charge tax on shipping. If the products in an order are a mix of taxable and non-taxable items, then the portion of shipping that applies to the taxable items is taxable.

Tax liability in Wisconsin

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Wisconsin. Digital products and sales on marketplaces such as Amazon are included. You might have nexus in Wisconsin if you met the following condition in the previous or current calendar year:

  • Your revenue from sales to customers in Wisconsin was $100,000 or greater.

If you're not sure whether you're required to remit taxes in Wisconsin, then contact US state tax authorities or a local tax professional.

Wyoming

State tax website Sourcing Taxable shipping Local taxes
Wyoming Department of Revenue Destination No No


Special tax rules

Wyoming is a destination state, but doesn't have local taxes. For that reason, buyers always pay the same state level tax rate.

Tax liability in Wyoming

Nexus is determined using sales from the previous or current calendar year, and is based on the amount of revenue from sales to customers in Wyoming and the number of sales made to customers in Wyoming. Digital products are included, but sales on marketplaces such as Amazon are not. You might have nexus in Wyoming if you met any of the following conditions in the previous or current calendar year:

  • Your revenue from sales to customers in Wyoming was $100,000 or greater.
  • You made 200 or more sales to customers in Wyoming.

If you're not sure whether you're required to remit taxes in Wyoming, then contact US state tax authorities or a local tax professional.

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