US Digital Sales Tax: No Federal Sales Tax
The United Sates of America (USA) has no national or federal sales tax. However, there are approximately 13,000 sales tax jurisdictions in the United States (including states, counties, and cities).
US Digital Sales Tax: Physical Nexus
If you have a physical presence in a state, you have physical nexus. This means you’re subject to sales tax because you have a store, inventory, employees, et cetera, in that state.
US Digital Sales Tax: Economic Nexus
In South Dakata v. Wayfair, Inc., the United States Supreme Court decided (in 2018) that states may charge sales tax based on economic nexus. This means that even if you have no physical presence (or physical nexus) in a state, the state can still charge you sales tax based on the sales you made in that state. This would include digital product sales.
Economic nexus for most states is $100,000 US in annual sales. Once you pass this threshold, you must register for sales tax in that state. At time of writing, these US states had economic nexus sales thresholds that were higher:
- Alabama: $250,000
- California: $500,000
- Mississippi: $250,000
- New York: $500,000
- Texas: $500,000
Be aware that many states have an economic nexus of 200 transactions as well; New York state is only 100 transactions.
US Digital Sales Tax: Other Sales Tax Nexus
Also, sales tax nexus can be triggered by other factors such as affiliates, click-throughs, inventory in state, trade shows, and other factors.
US Digital Sales Tax: US States With No Sales Tax
US states with no sales tax are Alaska, Delaware, Oregon, Montana, and New Hampshire.
Please note that, although Alaska has no statewide tax, some of its cities and counties charge sales tax.
US Digital Sales Tax Rates By State
Avalara, Inc. compiles accurate, thorough, and up-to-date information on US state and local sales taxes. Resources include:
- Sales tax calculator and tax rate lookup tool: Enter any U.S. address to get the sales tax rate for your exact location.
- State-by-state sales tax breakdown: For each state, the statewide sales tax rate, local county and city taxes, economic nexus thresholds, filing and remittance requirements, and more.
Access 2025 U.S. sales tax rates by state here.
USA Digital Sales Tax Compliance
US digital sales tax compliance is a very complicated, constantly changing specialty. This information is not legal, professional, or tax advice, nor is it guaranteed to be complete, accurate, and up-to-date. It is being provided simply to make you aware that, as a resident or non-resident of the United States of America, you may be subject to sales taxes on the sale of your own digital products to residents of the United States and its various states and jurisdictions. Please discuss this situation with your own professional advisors.
We highly recommend this shopping cart with its simple sales tax functionality. It can help you with your digital sales tax compliance worldwide.