Sales Tax on Invoices USA: State-by-State Basics

US sales tax is state and local — there's no federal sales tax. Your invoice must reflect tax only where you have nexus and owe tax.

What Is Sales Tax Nexus?

Nexus means sufficient connection to a state to collect tax. Triggers include: physical location, employees, economic thresholds ($100k+ sales in many states).

How to Show Sales Tax on Invoices

List subtotal, then each tax jurisdiction separately if needed:

• Subtotal: $1,000
• CA Sales Tax (7.25%): $72.50
• Total: $1,072.50

Tax-Exempt Sales

For tax-exempt clients (nonprofits, resellers), note their exemption certificate number on the invoice and charge $0 tax.

States With No Sales Tax

Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax (local taxes may apply in Alaska).

Software and Services Tax

SaaS and digital services taxability varies wildly by state. Check each state's rules if you sell software or online services.

Create Sales Tax Invoices

Add tax rates to your invoices with our free generator — calculate subtotal, tax, and total automatically.