Sales Tax in the United States

Most of the states in the United States charge “sales and use tax” for consuming taxable goods or services within the state. There is no federal sales tax in the United States. Each state has its own sales tax law and regulation for charging sales and use tax at the state level and at the local county or city level.

Sales and Use tax are a major source of revenue for the state.

Usually, sales and use tax is charged based on the place of the seller of the goods or at the place of the service provider. With the invention of online marketplace and remote seller, most of the states in the United States has adopted a nexus system. Nexus in a state is mostly based on your physical presence or your economic nexus in the state. If your business has a nexus you will need to register for sales tax in that state and charge sales and use tax to your buyer, whether you are physically present in that state or not.

In general, the sales tax rates in the United States are as follows as of January 2021.