Sales tax calculator

Your business is required to collect sales tax when you have sales tax nexus in a state. Sales tax nexus occurs when your business has a physical or economic connection to a state. All states have a slightly different definition of nexus. You only charge sales tax in the states in which you have sales tax nexus.

If your business has offices, warehouses and employees in a state, you likely have physical nexus. On the other hand, economic nexus thresholds are based on sales transaction amounts or revenue thresholds. Certain states only have revenue thresholds, while other states require businesses to meet both a revenue and transaction threshold to meet their nexus requirement. 

We recommend using Stripe’s VAT calculator or GST calculator to find the correct GST or VAT rate.  

Stripe acquired TaxJar in 2021 to accelerate the future of e-commerce. Available in over 100 countries, Stripe Tax enables you to automatically calculate and collect the right amount of tax based on where you are registered, where your customers are located, and what you are selling. Stripe Tax also helps you monitor your obligations and provides reporting for filing and remittance. Learn more about Stripe Tax here.

E-commerce retailers must collect sales tax in states where they have sales tax nexus. Even without a physical presence, businesses must register and collect sales tax if their sales or revenue exceed a state’s economic nexus threshold. For e-commerce businesses, sales tax compliance can be a challenge, as you can meet an economic nexus threshold in multiple states quickly.

The sales tax rate in an area is the combined rate of a state sales tax rate and any additional local sales taxes levied by a county or city. That’s why the sales tax rate on a sale in one town can differ from one located in a different town – even if it’s close by.

You can calculate the sales and use tax rate in your area by entering an address into our sales tax calculator. This will provide a combined sales tax rate for a location.

You will receive a filing frequency from the state when you register for a sales tax permit. Filing frequency varies by both the state you’re filing in and the size of your business. As a general rule of thumb, the more taxable revenue you generate in a state, the more often they want you to file sales and use tax. Your filing frequency may start out quarterly, but if your business sees an increase in revenue or transactions, a state may decide you need to file monthly. On the other hand, if your revenue or transactions decrease, a state may decide you should file annually. States will notify you if your filing frequency changes. 

You could be responsible for paying interest and penalties on top of the state sales tax you owe. There’s also the possibility of criminal penalties, lawsuits and reputational damage. 

TaxJar makes it easy to track where you have (and where you may soon have) sales tax obligations using our Economic Nexus Insights dashboard. TaxJar’s AutoFile can also automate filing sales tax returns on your company’s behalf, so you never miss a filing date again.