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How to address
US tax rates?
US sales tax is a state-based tax. Each state has its own sales tax policy and rate. In most states, local sales taxes are imposed in addition to the state sales tax. Therefore, you can have customers in the same state, and even the same city, but you might have to charge them different tax rates. On top of that, some products have special tax rates that need to be applied as well.
State and ZIP: Essentials for tax compliance
The tax rate is determined by where the customer is based, so it’s impossible to know what rate to charge if you don’t have their address. You must collect the billing address of all customers (at very least their state and ZIP code) – otherwise, it’s impossible to determine the appropriate rate.
For example the retail sales tax rates for select US states: California (7,25% – 10,25%), Florida (6% – 8%), New York (4% – 8,87%), Illinois (6,25% – 11%), Texas (6,37% – 8,25%) or Washington (6.5% – 10.4%).
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