Sales Tax for Online Sellers (2026): A Plain-English Guide for the US
By Saurabh Pandey · Updated · 3 min read
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Sales tax is one of the most confusing parts of selling online in the United States. There is no national sales tax; instead, 45 states and Washington DC have their own, and thousands of cities and counties add more. The good news for small sellers is that marketplaces now handle most of it. The catch is that your own website is a different story.
This guide is general information, not tax advice. Rules differ by state and change often; speak to an accountant about your situation.
Who collects sales tax when you sell on a marketplace?
Every US state with a sales tax has a marketplace facilitator law. These laws make marketplaces such as Etsy, eBay, Amazon, Poshmark, Mercari and Depop responsible for collecting and paying sales tax on orders delivered in those states. For most small sellers who only sell through marketplaces, that means:
- the marketplace adds the tax at checkout,
- the marketplace sends it to the state, and
- the tax never becomes part of your income.
It still matters, though, because some marketplace fees are charged on the tax. Etsy's US payment processing fee and eBay's final value fee are both calculated on totals that include sales tax. The Etsy and eBay fee calculators include a sales tax field for this reason.
Your own website: nexus
When you sell through your own website (Shopify, WooCommerce, Squarespace and so on), you are responsible for collecting sales tax in any state where you have nexus: a connection strong enough for the state to require you to collect.
- Physical nexus: your home or business location, a warehouse (including Amazon FBA warehouses holding your stock), employees or inventory in a state.
- Economic nexus: since the 2018 Wayfair Supreme Court decision, states can require out-of-state sellers to collect once their sales into the state pass a threshold. In many states it is $100,000 of sales a year, and some states also count the number of transactions.
Most small shops have nexus only in their home state at first. Shopify and similar platforms can calculate the right rate for each address once you register and switch tax collection on.
How sales tax rates work
Each state sets a state rate, and most let cities, counties and special districts add their own. That is why the rate depends on the delivery address, not just the state. For 2026:
- California has the highest state rate, 7.25%.
- Louisiana has the highest average combined rate, about 10.13% including local taxes.
- Delaware, Montana, New Hampshire and Oregon have no state or local sales tax, and Alaska has no state tax but allows local ones.
The full table of state rates and average combined rates, from the Tax Foundation's 2026 data:
| State | State rate | Average with local taxes |
|---|---|---|
| Alabama | 4% | 9.46% |
| Alaska | 0% | 1.82% |
| Arizona | 5.6% | 8.54% |
| Arkansas | 6.5% | 9.48% |
| California | 7.25% | 9.03% |
| Colorado | 2.9% | 7.89% |
| Connecticut | 6.35% | 6.35% |
| Delaware | 0% | 0% |
| District of Columbia | 6% | 6% |
| Florida | 6% | 6.98% |
| Georgia | 4% | 7.56% |
| Hawaii | 4% | 4.5% |
| Idaho | 6% | 6.03% |
| Illinois | 6.25% | 8.98% |
| Indiana | 7% | 7% |
| Iowa | 6% | 6.94% |
| Kansas | 6.5% | 8.71% |
| Kentucky | 6% | 6% |
| Louisiana | 5% | 10.13% |
| Maine | 5.5% | 5.5% |
| Maryland | 6% | 6% |
| Massachusetts | 6.25% | 6.25% |
| Michigan | 6% | 6% |
| Minnesota | 6.875% | 8.14% |
| Mississippi | 7% | 7.06% |
| Missouri | 4.225% | 8.44% |
| Montana | 0% | 0% |
| Nebraska | 5.5% | 6.98% |
| Nevada | 6.85% | 8.24% |
| New Hampshire | 0% | 0% |
| New Jersey | 6.625% | 6.6% |
| New Mexico | 4.875% | 7.68% |
| New York | 4% | 8.54% |
| North Carolina | 4.75% | 7.1% |
| North Dakota | 5% | 7.09% |
| Ohio | 5.75% | 7.29% |
| Oklahoma | 4.5% | 9.06% |
| Oregon | 0% | 0% |
| Pennsylvania | 6% | 6.34% |
| Rhode Island | 7% | 7% |
| South Carolina | 6% | 7.49% |
| South Dakota | 4.2% | 6.11% |
| Tennessee | 7% | 9.61% |
| Texas | 6.25% | 8.2% |
| Utah | 6.1% | 7.42% |
| Vermont | 6% | 6.43% |
| Virginia | 5.3% | 5.77% |
| Washington | 6.5% | 9.57% |
| West Virginia | 6% | 6.6% |
| Wisconsin | 5% | 5.72% |
| Wyoming | 4% | 5.39% |
State rates as of 1 July 2026. Most states also allow city and county taxes; the average combined rate is shown in the table, but the exact rate depends on the delivery address. Use “Other rate” for your exact combined rate.
Last verified: . Official sources: Tax Foundation: State and Local Sales Tax Rates, Midyear 2026
Calculating tax backwards
Marketplace reports and receipts often show totals that already include tax. To find the price before tax, divide by 1 plus the rate. Never subtract the percentage:
Price before tax = total ÷ (1 + rate ÷ 100)
A $108.25 total at 8.25% is 108.25 ÷ 1.0825 = $100 before tax, so the tax is $8.25. Subtracting 8.25% from $108.25 would give $99.32, which is wrong.
Reverse Sales Tax Calculator
Open full calculatorFee breakdown
Enter the total including tax.
Selling into Canada
Canada uses a federal GST of 5%, with a combined HST in Ontario (13%), Nova Scotia (14%) and New Brunswick, Newfoundland and Labrador and Prince Edward Island (15%). British Columbia, Saskatchewan, Manitoba and Quebec charge a provincial tax on top of GST. Read our GST guide for Australian and Canadian sellers for the details.
A simple checklist for small US sellers
- If you only sell on marketplaces, confirm each one collects tax in your states (they almost always do).
- If you have your own website, register for a sales tax permit in your home state and switch on tax collection in your shop platform.
- Keep an eye on your sales into each state; when you approach a state's economic nexus threshold, plan to register there.
- Exclude collected tax from your income and profit calculations.
- Keep records of tax collected and filed for each state.
The bottom line
For marketplace sellers, sales tax is mostly handled for you, but it still affects fees. For your own website, register where you have nexus and let your platform calculate rates by address. When you need to split a total into price and tax, use the reverse sales tax calculator.
Rates in this guide are from the Tax Foundation's State and Local Sales Tax Rates, Midyear 2026. This is general information, not tax advice.
Frequently asked questions
Do I have to collect sales tax if I sell on Etsy or eBay?
In almost every case, no: Etsy, eBay and other marketplaces collect and pay sales tax for orders delivered in states with marketplace facilitator laws, which now covers every state with a sales tax.
What is economic nexus?
A rule that requires out-of-state sellers to collect a state's sales tax once their sales into that state pass a threshold, often $100,000 a year.
Which states have no sales tax?
Delaware, Montana, New Hampshire and Oregon have no state or local sales tax. Alaska has no state sales tax, but some local governments charge one.
How do I remove sales tax from a total?
Divide the total by 1 plus the tax rate as a decimal. For 7.25%, divide by 1.0725.