One of the most complicated things about sales tax is determining which rate to charge. At TaxJar, we strive to make this simple with tools like our Online Sales Tax Calculator (just enter a zip code) and Mobile Sales Tax Calculator (just go there on your mobile device and we’ll tell you the tax rate where you stand.)
Most of the time, if you’re making a sale to someone standing in front of you, you simply charge them the local sales tax rate. This includes the state rate plus any county, city or other special taxing rates.
For example, the sales tax rate in the famous Beverly Hills 90210 zip code is made up of the 6.5% California statewide rate, a 1% Los Angeles County rate, and an additional 1.5% local rate, for a total of 9.0% sales tax rate.
Some areas have an odd combination of sales tax rates.
Take the 36301 zip code in Dothan, Alabama. The tax rate in Dothan is the 4% Alabama state tax rate + the 4% Dothan city tax rate + a district tax rate of 2% for a total of 10%. Dothan is located in Dale County, but a sale in Dothan doesn’t require collecting Dale County sales tax.
Sales tax gets even more complicated for online sellers. You must determine in which states you have sales tax nexus, and then figure out what to charge buyers in that state (or states.)
Now that I’ve made this sound complicated, I want to offer a light at the end of the tunnel.
Some states have kept sales tax simple. They only require sellers to charge a state tax rate. That means no worrying about adding the state + any local rates. Who are these simple states? We have your list:
Which states don’t have local sales tax rates?
Connecticut – 6.35% state sales tax rate
District of Columbia – 5.75% district-wide sales tax rate
Hawaii – 4.0% state sales tax rate
Indiana (Amazon FBA State) – 7.0% state sales tax rate
Kentucky (Amazon FBA State) – 6.0% state sales tax rate
Maine – 5.5%
Maryland (Amazon FBA State) – 6.0%
Massachusetts (Future Amazon FBA State as of this writing) – 6.25%
Michigan – 6.0%
Rhode Island – 7.0%
Do you have questions about sales tax? Start the conversation in the comments!