Tax & Compliance

Sales Tax on Invoices: A US Guide

Sales tax in the US is notoriously fragmented — there’s no single national rate, and the rules genuinely vary by state, and sometimes by city or county within a state. This is a general overview, not a substitute for advice specific to your business from a tax professional.

Whether you need to charge sales tax at all

This depends on whether you have “nexus” (a sufficient business connection) in your customer’s state, which can be triggered by physical presence, or in many states now, by sales volume alone (economic nexus) even without a physical location there.

What’s taxable varies more than people expect

Physical goods are taxable in nearly every state that has a sales tax, but services are taxed inconsistently — some states tax specific service categories, others don’t tax services at all. Confirm your specific service category’s treatment in each state where you do business.

Digital products are their own category

Many states now have specific rules for digital goods and software-as-a-service, separate from both physical goods and traditional services — don’t assume your physical-goods research applies.

Practical takeaway for invoicing

Once you know your applicable rate, our Sales Tax Calculator handles the math, and our generator supports different tax rates on different line items if you sell a mix of taxable and non-taxable items.

This is a general overview, not tax advice. Confirm your specific obligations with a tax professional familiar with your state and industry.