US Sales Tax
Use this skill whenever asked about United States sales tax, use tax, sales tax nexus, multi-state tax compliance, sales tax returns, exemption certificates, taxability of goods or services, economic nexus, or any request involving US state-level consumption taxes. Trigger on phrases like "sales tax", "use tax", "nexus", "Wayfair", "sales tax return", "exemption certificate", "resale certificate", "taxability", "sales tax rate", "marketplace facilitator", "Streamlined Sales Tax", "SST", or any request involving US state sales and use tax filing, classification, or compliance. This skill contains the complete US sales and use tax framework. ALWAYS read this skill before touching any US sales tax work.
Applicable period 2025Attested by another accountant· Reviewed Jun 3, 2026
Accountant-reviewed general reference. Reviewedas reference material, not for your specific facts. Don't file, pay, or take a position on it without a professional reviewing your situation.
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Key figures — United States, 2025
Every figure is drawn from this Tax Guide and cited to its source.
States w/ tax
45 states + DC impose a statewide sales tax; 5 (NOMAD) do notState statutes; Streamlined Sales Tax.
IL rate
6.25% state35 ILCS 120/2-10.
Nexus most
$100,000 is the common post-Wayfair economic-nexus sales threshold; the '200 transactions' prong has been dropped by many states (and some, e.g., CA/TX, never used it). Verify per state.South Dakota v. Wayfair; state statutes.
CA/TX
CA and TX economic-nexus threshold = $500,000 (no transaction-count test)Cal. RTC 6203; Texas Comptroller Rule 3.286.
Quick reference
| Field | Value | |---|---| | Jurisdiction | United States of America | | Tax type | Sales and Use Tax (state-level; no federal equivalent) | | States with general sales tax | 45 states + DC | | States with NO general sales tax | Alaska (AK), Delaware (DE), Montana (MT), New Hampshire (NH), Oregon (OR) | | Key federal precedent | South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018) | | Industry body | Streamlined Sales Tax Governing Board (SSTGB) | | Approximate tax jurisdictions | ~13,000 distinct (state + county + city + special district) | | Typical state rate range | 2.9% (Colorado) -- 7.25% (California) | | Maximum combined rates | 10%+ in some jurisdictions | | Federal framework skill | This IS the framework skill | | Skill version | 2.0 |
Required inputs for multi-state analysis
| # | Question | Why it matters | |---|----------|----------------| | 1 | Which states do you sell into? | Determines which state skills to load | | 2 | What do you sell (TPP, services, digital goods)? | Taxability varies dramatically by state | | 3 | Annual revenue by state? | Determines economic nexus in each state | | 4 | Transaction counts by state? | Some states use transaction thresholds | | 5 | Physical presence in which states? | Creates nexus independent of economic thresholds | | 6 | Use marketplace facilitators? | Facilitators collect in most states | | 7 | Ship from which locations? | Affects sourcing rules (origin vs. destination) |
The full Guide
⚙ canonical modelUnited States Sales and Use Tax Framework Skill v2.0
Verified rates & thresholds (accountant-reviewed)
Reviewed against the cited tax authorities by a licensed accountant on 2026-06-03.
Items flagged for further clarification are tracked separately and excluded here.
This block is generated from verified skill_facts — edit the facts, not the prose.
US Sales Tax
- States w/ tax — 45 states + DC impose a statewide sales tax; 5 (NOMAD) do not (State statutes; Streamlined Sales Tax.)
- IL rate — 6.25% state (35 ILCS 120/2-10.)
- Nexus most — $100,000 is the common post-Wayfair economic-nexus sales threshold; the '200 transactions' prong has been dropped by many states (and some, e.g., CA/TX, never used it). Verify per state. (South Dakota v. Wayfair; state statutes.)
- CA/TX — CA and TX economic-nexus threshold = $500,000 (no transaction-count test) (Cal. RTC 6203; Texas Comptroller Rule 3.286.)
Section 1 -- Quick reference
Quick reference
| Field | Value |
|---|---|
| Jurisdiction | United States of America |
| Tax type | Sales and Use Tax (state-level; no federal equivalent) |
| States with general sales tax | 45 states + DC |
| States with NO general sales tax | Alaska (AK), Delaware (DE), Montana (MT), New Hampshire (NH), Oregon (OR) |
| Key federal precedent | South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018) |
| Industry body | Streamlined Sales Tax Governing Board (SSTGB) |
| Approximate tax jurisdictions | ~13,000 distinct (state + county + city + special district) |
| Typical state rate range | 2.9% (Colorado) -- 7.25% (California) |
| Maximum combined rates | 10%+ in some jurisdictions |
| Federal framework skill | This IS the framework skill |
| Skill version | 2.0 |
Required inputs for multi-state analysis
Required inputs for multi-state analysis
| # | Question | Why it matters |
|---|---|---|
| 1 | Which states do you sell into? | Determines which state skills to load |
| 2 | What do you sell (TPP, services, digital goods)? | Taxability varies dramatically by state |
| 3 | Annual revenue by state? | Determines economic nexus in each state |
| 4 | Transaction counts by state? | Some states use transaction thresholds |
| 5 | Physical presence in which states? | Creates nexus independent of economic thresholds |
| 6 | Use marketplace facilitators? | Facilitators collect in most states |
| 7 | Ship from which locations? | Affects sourcing rules (origin vs. destination) |
Refusal catalogue
- R-US-1 -- Import duties and customs — Federal customs duties are outside scope. Refer to customs broker.
- R-US-2 -- Excise taxes — Federal excise taxes (fuel, alcohol, tobacco, firearms) are separate. Outside scope.
- R-US-3 -- Property tax — Real and personal property taxes are separate. Outside scope.
Section 3 -- Transaction pattern library (cross-state reference)
This table provides the default taxability pattern across US states. Always verify with the state-specific skill.
3.1 SaaS / cloud software
SaaS taxability by state group
| State group | SaaS taxable? |
|---|---|
| TAXABLE: NY, TX, WA, PA, CT, OH, SC, TN, UT, SD, ND, HI, NM, WV, RI, DC, AZ, IA, KY, MS, NE | Yes |
| NOT TAXABLE: CA, IL, CO, GA, MO, VA, MN, NC, MI, OK, OR, IN, WI, AR, KS, ME, VT | No or unclear |
| 20% EXEMPT: TX | Data processing services 80% taxable |
3.2 Food (grocery, unprepared)
Food taxability by treatment
| Treatment | States |
|---|---|
| EXEMPT | Most states (CA, NY, FL, TX, PA, OH, NJ, MA, etc.) |
| TAXABLE at reduced rate | IL (1%), VA (1%), AR (0.125%), MO (1.225%), TN (4%), KS (varying) |
| FULLY TAXABLE | AL, MS, SD, OK (state level), HI |
3.3 Clothing
Clothing taxability by treatment
| Treatment | States |
|---|---|
| EXEMPT (all clothing) | PA, NJ, MN |
| EXEMPT under threshold | NY (under $110/item), MA (under $175/item), VT (under $110), RI (under $250) |
| FULLY TAXABLE | CA, TX, FL, IL, WA, OH, GA, NC, and most other states |
| Holiday exemption only | TX, FL, and several other states with temporary sales tax holidays |
3.4 Digital goods (downloads)
Digital goods taxability by state group
| State group | Taxable? |
|---|---|
| TAXABLE: WA, NY, TX, NJ, CT, TN, UT, WI, KY, NE, SD, ND, HI, NM | Yes |
| NOT TAXABLE: CA (streaming), IL (streaming), GA, MO, OR | Generally no |
3.5 Professional services
Professional services taxability
| Treatment | Notes |
|---|---|
| NOT TAXABLE | Vast majority of states do not tax professional services |
| BROADLY TAXABLE | HI, NM, SD, WV tax most services including professional |
3.6 Manufacturing equipment
Manufacturing equipment taxability
| Treatment | States |
|---|---|
| FULLY EXEMPT | Most states provide full or substantial exemption |
| PARTIAL EXEMPTION | CA (state rate reduced, district tax applies) |
4.1 State base rates
State base rates
| State | Rate | State | Rate | State | Rate |
|---|---|---|---|---|---|
| AL | 4.00% | KY | 6.00% | ND | 5.00% |
| AZ | 5.60% | LA | 4.45% | NE | 5.50% |
| AR | 6.50% | ME | 5.50% | NV | 6.85% |
| CA | 7.25% | MD | 6.00% | NH | None |
| CO | 2.90% | MA | 6.25% | NJ | 6.625% |
| CT | 6.35% | MI | 6.00% | NM | 5.125% |
| DC | 6.00% | MN | 6.875% | NY | 4.00% |
| DE | None | MS | 7.00% | NC | 4.75% |
| FL | 6.00% | MO | 4.225% | OH | 5.75% |
| GA | 4.00% | MT | None | OK | 4.50% |
| HI | 4.00% | OR | None | PA | 6.00% |
| ID | 6.00% | RI | 7.00% | SC | 6.00% |
| IL | 6.25% | SD | 4.50% | TN | 7.00% |
| IN | 7.00% | TX | 6.25% | UT | 6.10% |
| IA | 6.00% | VT | 6.00% | VA | 5.30% |
| KS | 6.50% | WA | 6.50% | WV | 6.00% |
| WI | 5.00% | WY | 4.00% | AK | None (local only) |
| MN | 6.875% |
4.2 Sourcing rules overview
Sourcing rules overview
| Type | States |
|---|---|
| Destination-based | Most states (CA for district taxes, NY, FL, WA, and SST states) |
| Origin-based (intrastate) | TX, IL, OH, PA, VA, MS, MO, TN, AZ |
| Mixed | Some states use origin for intrastate, destination for interstate |
5.1 Sales tax vs. use tax
- Sales tax vs use tax — Sales tax: collected by seller at point of sale. Use tax: owed by buyer when sales tax was not collected. Rates are identical within a jurisdiction. You pay one or the other, never both.
5.2 Tax base
- Tax base — Sales tax generally applies to retail sale of tangible personal property (TPP). Service taxation varies enormously by state. Digital goods and SaaS are evolving and inconsistent.
5.3 Nexus types
Nexus types
| Type | Description |
|---|---|
| Physical nexus | Offices, employees, inventory, property, representatives in the state |
| Economic nexus (post-Wayfair) | Revenue and/or transaction thresholds met |
| Click-through nexus | Referral agreements with in-state entities |
| Affiliate nexus | Related entities with in-state presence |
| Marketplace nexus | Selling through marketplace facilitator |
5.4 Economic nexus thresholds (common patterns)
Economic nexus thresholds (common patterns)
| Threshold | States |
|---|---|
| $100K OR 200 transactions | Most states (SD, IN, IA, KY, ME, etc.) |
| $100K only (no transaction count) | FL, WA, NV, TX (uses $500K), CA ($500K) |
| $500K | CA, TX |
| $500K AND 100 transactions | NY (AND test -- unique) |
6.1 Filing overview
- Filing overview — Each state has its own return form. Common elements: gross sales, exempt sales, taxable sales, tax collected, local tax breakdown, use tax.
6.2 Marketplace facilitator impact
- Marketplace facilitator impact — In all states with marketplace facilitator laws (all 45 + DC as of 2024), the marketplace collects on facilitated sales. Sellers file for direct sales only.
6.3 SST centralized registration
- SST centralized registration — Remote sellers can register in all 24 SST member states through a single application at https://www.sstregister.org.
7.1 Wayfair decision (2018)
- Wayfair decision (2018) — States may require remote sellers to collect sales tax if they meet economic nexus thresholds, even without physical presence. All 45 sales tax states + DC have enacted post-Wayfair economic nexus laws.
7.2 Common penalty patterns
Common penalty patterns
| Penalty type | Typical range |
|---|---|
| Late filing | 5-10% of tax due |
| Late payment | 5-10% of tax due |
| Fraud | 25-100% of deficiency |
| Interest | State-set rates, adjusted periodically |
7.3 Voluntary disclosure agreements (VDA)
- Voluntary disclosure agreements (VDA) — Most states offer VDAs for sellers who discover past-due nexus obligations. Benefits: penalty waiver, limited lookback (typically 3-4 years).
EC1 -- Multi-state seller nexus analysis
Situation: E-commerce seller with $2M in national sales ships to all 50 states. Resolution: Must analyze economic nexus in each state individually. Revenue/transaction thresholds differ by state. Marketplace sales (Amazon, etc.) typically handled by the marketplace.
EC2 -- SaaS taxability varies by state
Situation: SaaS company sells nationwide. Resolution: SaaS is taxable in approximately 20+ states. Must determine taxability state by state. TX provides 20% exemption. CA and IL generally do not tax pure SaaS.
EC3 -- Drop shipments
Situation: Retailer in State A directs supplier in State B to ship to customer in State C. Resolution: Three-party arrangement. Taxability depends on where nexus exists and which exemption certificates are provided. Complex area requiring state-specific analysis.
EC4 -- No-sales-tax state sellers
Situation: Oregon seller ships to customers in other states. Resolution: Oregon's lack of sales tax does NOT relieve the seller of collection obligations in states where they have nexus.
Test 1 -- Economic nexus determination
Input: Seller has $150K in FL sales, $90K in NY sales, $80K in CA sales. Expected: FL: nexus ($100K met). NY: no nexus (need $500K AND 100 transactions). CA: no nexus (need $500K).
Test 2 -- SaaS multi-state
Input: SaaS company with customers in NY, CA, and IL. Expected: NY: taxable. CA: not taxable (pure SaaS). IL: not taxable (pure cloud, no download).
Test 3 -- Food taxability
Input: Grocery food sold in IL, TX, and AL. Expected: IL: 1% reduced rate. TX: exempt. AL: fully taxable.
Test 4 -- Clothing taxability
Input: $200 jacket sold in NY, PA, and CA. Expected: NY: taxable (over $110). PA: exempt. CA: taxable.
Test 5 -- Marketplace facilitator
Input: Seller makes $80K on Amazon, $30K direct, in a $100K nexus state. Expected: Amazon collects on $80K. Seller must analyze if $30K direct creates separate nexus.
Section 10 -- Prohibitions
- NEVER assume a single federal sales tax rate -- there is no federal sales tax.
- NEVER apply one state's rules to another state -- each state is independent.
- NEVER assume SaaS taxability is uniform across states.
- NEVER assume food is always exempt -- several states tax it.
- NEVER assume clothing is always taxable -- several states exempt it.
- NEVER ignore local taxes -- they can add 0.5% to 5%+ to the state rate.
- NEVER assume marketplace sellers have no obligations -- direct sales may still require collection.
- NEVER forget use tax -- buyers owe it when sales tax was not collected.
- NEVER treat economic nexus thresholds as uniform -- they range from $100K to $500K with varying tests.
- NEVER compute any number -- all arithmetic is handled by the deterministic engine, not Claude.
Disclaimer
This skill is provided for informational and computational purposes only and does not constitute tax, legal, or financial advice. All outputs must be reviewed by a qualified professional (CPA, EA, or tax attorney) before filing.
Disclaimer
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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Reviewed by a named licensed practitioner against the stated sources, as general reference material.
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