The topic of shipping and handling can be complicated when determining the taxability for sales tax purposes. The short answer is: the rules vary by state.
As an ecommerce seller in the US, you likely already collect sales tax from your customers for the products and services you sell. But you may question: What about shipping? Do you need to charge sales tax on shipping as well?
It’s crucial to learn how sales tax on shipping works to stay compliant in states where you have nexus. To help you navigate the complex system of sales tax on shipping, this in-depth guide is written just for you.
Shipping vs Handling: What’s The Difference?
Shipping vs Handling: What’s the difference between the two? Both activities involve managing taxable goods for delivery to consumers. However, there are clear distinctions between them.
Shipping involves explicit tasks, such as:
Packaging items
Transporting goods
Creating shipping labels
Selecting the shipping carrier
Tracking shipments and updating the status
Handling services, on the other hand, include activities like:
Inspecting products
Securing package safety
Sorting and organizing goods
Coordinating with shipping carriers
Assembling and labeling packages
When it comes to the taxability of these services, the rules are different in every state. In some states, shipping is taxable. Meanwhile, other states may exempt such services from sales tax.
On the contrary, handling services are also subject to varying sales tax rules by state, and their taxability can often depend on factors like whether they are separately stated on the invoice or bundled with the product cost.
Given the complexity, it’s easy to get lost between what is taxable and what is not. To stay compliant, learning the fundamental rules in every state is crucial. Read on through this guide to discover everything you need to know about sales tax on shipping.
Factors That Determine Shipping Taxability
There are important factors that play a role in identifying the taxability of shipping services. In general, there are 3 main aspects to consider, those are:
Destination: The customer’s location determines if sales tax can be applied to shipping. Each state has different taxability laws and sales tax rates. When shipping to a state where such services are taxable, sales tax must be applied to the shipping cost.
Product Taxability: Some products are taxable in one state, while some goods can be exempt in another. For example, you are shipping items to a state where shipping is taxable, but the delivered goods are tax-exempt. In that case, sales tax may not apply to the shipping cost.
Mode of Transportation: Using your own vehicle for delivery or partnering with a third-party shipping carrier can influence the shipping taxability. Some states differentiate, often making delivery charges more likely to be taxable if the seller uses their fleet, especially if the shipping is not separately stated.Conversely, if a common carrier (such as USPS, FedEx, or UPS) is used and the shipping charge is separately stated, it may be exempt in certain states. Similar to the two factors above, the states have different rules for shipping taxability depending on the mode of transportation.
Understanding the intricacies of shipping taxabilities can be difficult at first. Thus, here’s a more in-depth explanation to fully grasp the differences between these essential factors.
1. Destination
As briefly explained above, some states may apply sales tax to shipping services, while some do not. For starters, most states use the destination of goods (i.e., the location of the buyer) to determine the taxability of the transaction.
On the other hand, some states base sales tax on the origin of the goods (location of the seller). However, all sales from remote sellers who are selling taxable goods from one state to another will always be destination-based.
With that said, here’s an example scenario for a sale that follows destination-basedrules:
You are a vendor from Colorado, where shipping is generally not subject to tax.
You are selling goods to a customer in Arkansas, where shipping is typically subject to tax.
The delivered goods are subject to tax in Arkansas. Therefore, your shipping service is still subject to Arkansas’s sales tax.
Now, let’s flip the situation.
You are a vendor from Arkansas, where shipping is generally subject to tax.
You are selling goods to a customer in Colorado, where shipping is typically not taxable if certain conditions are met.
The delivered goods are taxable in Colorado. While shipping is taxable in your home state, the destination of the goods exempts your shipping service from sales tax in Colorado, provided the conditions for exemption are met.In that case, you only have to apply sales tax on the taxable goods.
These scenarios clarify that the destination of the goods is a defining factor of whether sales tax applies to the shipping service or not.
As complex as it already is, there are more rules involving the destination factor of determining the taxability of shipping.
Additional Restrictions
Specific conditions must be met for the sales tax exemption to take effect. This is crucial for cases where the destination influences the sales tax on shipping. Here’s an example.
In Colorado, shipping charges should not be combined with the price of the taxable goods and must bestated separately. Additionally, for shipping to be exempt, the charges must be “separable from the purchase”. This means the customer must have the option to use an alternative transportation service, such as picking up the goods themselves.
If these requirements are not met, then your shipping service becomes subject to sales tax in Colorado instead. It is also important to note that Colorado imposes a separate Retail Delivery Fee on all deliveries by motor vehicle to a location in Colorado that includes at least one item of taxable tangible personal property.This fee is distinct from sales tax on shipping and must be separatelystated on the invoice.
To stay compliant with each state’s unique regulations, refer to our state-by-state table in the lower section as your guide.
2. Product Taxability
Just like the destination factor, product taxability can also complicate the sales tax on shipping. For a straightforward explanation, here’s another scenario:
You are a vendor from Arkansas, where shipping is generally subject to tax.
Your customer is also from Arkansas, but the purchased goods are exempt from the state’s sales tax. (Examples of tax-exempt goods in Arkansas are agricultural supplies, medical devices, feminine hygiene products, and more.)
Though shipping is generally taxable in Arkansas, in this case, the purchased goods are exempt from sales tax. Therefore, the whole transaction (including shipping services) is excluded from sales tax.
In simpler terms, the product’s taxability may override the “destination” factor in determining sales tax on shipping services.
Each state has different rules regarding the taxation of specific products. If you’d like to know your state’s taxable and tax-exempt products, you can check our state-dedicated ultimate guides.
3. Mode of Transportation
The method used to transport goods is another important factor in determining shipping taxability.
Generally, this involves two main scenarios: (1) when the seller delivers the goods using their own vehicle or personnel, and (2) when a third-party common carrier is used.
It’s critical to remember that regardless of the mode of transportation, sales tax nexusis the foundational element determining if a seller is required to collect any sales tax (including on shipping) in a particular state.
Here are various circumstances you might encounter:
Scenario 1: Seller Delivers Goods (Using Own Vehicle/Personnel)
If you are a vendor who delivers taxable goods using your own vehicle or personnel to a customer in a state where you have a sales tax nexus:
In many states, charges for delivery made by the seller’s own vehicles or employees are considered part of the overall sale of the taxable goods and are therefore typically subject to sales tax, even if separately stated. The logic often is that the delivery is an integral part of making the sale.
If you do not have a sales tax nexus in your customer’s state, you are generally not required to collect sales tax on the transaction, including any delivery charges, regardless of who performs the delivery. The customer, in such cases, may be responsible for paying use tax directly to their state.
If you hire a third-party common carrier (like UPS, FedEx, or USPS) to deliver your taxable goods to a customer, and you, the retailer, have a sales tax nexus in the customer’s state:
The taxability of shipping charges by a third-party carrier varies significantly by state.
If shipping charges are stated separately: Many states may exempt the common carrier’s shipping charges from sales tax.
If the delivered goods are taxable: Shipping charges may still be subject to sales tax in other states, even if the charges are stated separately. As long as the delivered goods are not exempt from sales tax, then sales tax may still apply to shipping charges.
If the shipping charges are combined with handling fees: The entire combined charge often becomes subject to sales tax. This applies even in states where separately stated shipping charges might be exempt. That’s because handling fees are typically subject to sales tax in most states.
If you have a nexus in your customer’s state: Regardless of your carrier’s nexus, you, the retailer, are still the one responsible for collecting sales tax from your customers. Your obligation to collect sales tax on the shipping charges (if taxable in that state) arises from your nexus with the state and the state’s rules regarding shipping.
Scenario 3: Resale Certificates and Shipping (Typically in Drop-Shipping)
Resale Certificates are used by a purchaser (often a retailer) to buy goods for resale from a supplier without paying sales tax on that wholesale purchase. This is common in drop-shippingarrangements.
Example: You’re an online vendor (retailer) selling goods to a consumer. You don’t stock the goods, but instead, you purchase them from a third-party supplier. The third-party supplier is the one who ships them directly to your customer (drop-shipping).
Your transaction with your supplier: When you, the retailer, purchase goods from your supplier for resale, you typically provide your supplier with a valid resale certificate. This means your supplier does not charge you sales tax on the cost of the goods or any shipping charges they assess to you for fulfilling that order.
Your transaction with your customer: As the retailer, if you have a sales tax nexus in your customer’s state and the goods are taxable, you are responsible for collecting sales tax from your customer on the sales price of the goods.The applied sales tax potentially extends to the shipping charges you impose on your customer, depending on that state’s rules. The resale certificate you provided to your supplier does not exempt your customer from sales tax.
NOTE: If both the retailer and supplier have no nexus in the state where the goods are delivered, then no sales tax needs to be collected. In this case, shipping charges should generally not be subject to sales tax.If you have no nexus in the state where the taxable goods are being delivered but your supplier does, the obligation of collecting and remitting sales tax on shipping services may shift to the supplier’s end. However, this still depends on the conditions set by the state involved in the transaction.
The bottom line: The rules of the states are absolute, no matter how convoluted they are. To save yourself from the headache, you can skip the stress and leave the rest to TaxHero instead.
When is Sales Tax Applicable on Shipping?
The previous sections discussed the main factors that influence the taxability of shipping services. Additionally, there are other situations to be aware of to determine when sales tax applies to shipping services.
To stay tax-compliant, here are some general guidelines to keep in mind:
Taxable Items: As mentioned earlier, shipping taxable goods determines the taxability of shipping services. Always be wary of which goods are taxable in a state or not. This way, you can accuratelycalculate the applicable sales tax in your transactions.
Non-Taxable Items: Most states typically exempt sales tax on tax-exempt products when they are sold and delivered within their state. For this, the tax-exempt item is generally expected to be shipped separately from taxable items or, if combined, the shipping portion attributable to the exempt items should also be exempt
Combined Shipments: If taxable and tax-exempt goods are shipped together, the shipping tax should ideally be applied proportionally to the delivery cost of taxable goods. However, it’s important to note that some states may tax the entire shipping charge if any portion of the shipment contains taxable items.
Separate Shipping Charges: Some states will exempt sales tax on shipping if the cost is charged separately from the price of the goods and/or if the buyer has the option to pick up the goods or arrange their transportation. This means you can’t combine the cost of goods with the shipping fee to be tax-exempt in some states.
Freight and Handling: While shipping services are often exempt from sales tax in some states, handling services are typically taxable in most states. Knowing the difference between the two can save you from the trouble of determining your sales tax duties.
Location of the Sale: Always pay attention to whether the state you operate in or sell to is a destination or an origin-based state. Remember, the location is a major factor in determining how sales tax is applied to shipping services.All remote interstate sales must follow the destination-based rule.
For origin-based transactions: The taxability of shipping depends on the seller’s location. If their home-state taxes shipping or has specific requirements to be tax-exempt, the seller must meet those conditions.
These guidelines provide a starting point, but digging deeper into the specific sales tax regulations of the states where you operate is essential to ensure accurate compliance.
States Guide on Sales Tax on Shipping
Here is our comprehensive guide with a state-by-state breakdown of key details about sales tax on shipping.
STATE
IS SHIPPING TAXABLE?
EXEMPTIONS, IF ANY
Alabama
Yes
Sales tax is exempt if:
shipping charges are billed as a separate line item from the price of the item and are paid by the customer (indirectly or directly) and
delivery is by a common carrier (i.e., FedEx) or by the U.S. Postal Service
Alaska
Not applicable
There is no sales tax in this state.
Arizona
No
Sales tax is exempt if:
shipping charges are separable from the product price and
stated separately
Arkansas
Yes
Sales tax on shipping is exempt if the item is exempt.
California
No
Sales tax is exempt if:
shipping charges are billed as a separate line item from the price of the item and are paid by the customer (indirectly or directly) and
delivery is by a common carrier (i.e., FedEx) or by the U.S. Postal Service
Colorado
No
Sales tax is exempt if:
shipping charges are separable from the product price and
stated separately
Connecticut
Yes
Sales tax on shipping is exempt if the item is exempt.
Delaware
Not applicable
There is no sales tax in this state.
District of Columbia
Yes
Sales tax is exempt if:
delivery happens after the sale and
shipping charges are stated separately
Florida
No
Sales tax is exempt if:
shipping is optional (i.e., buyer is allowed to pick up the item) and
shipping charges are stated separately
Georgia
Yes
Sales tax on shipping is exempt if the item is exempt.
Hawaii
Yes
Sales tax is exempt if shipments are made outside of the state.
Idaho
No
Sales tax is exempt if shipping charges are stated separately.
Illinois
No
Sales tax is exempt if:
Shipping charges are separately contracted for.
The buyer is allowed to pick up the purchased item and
the item is exempt.
Indiana
Yes
Sales tax is exempt if delivery charges are billed and furnished by a third party.
Iowa
No
Sales tax is exempt if:
shipping charges are separately contracted for and
Sales tax on shipping is exempt if the item is exempt.
Louisiana
No
Sales tax is exempt if:
delivery happens after the sale and
shipping charges are stated separately
Maine
Yes
Sales tax is exempt if:
shipping charges are billed as a separate line item from the price of the item and are paid by the customer (indirectly or directly),
delivery is by a common carrier (i.e., FedEx) or by the U.S. Postal Service, and
shipment is made directly to the customer.
Maryland
No
Sales tax is exempt if shipping charges are stated separately.
Massachusetts
No
Sales tax is exempt if:
shipping costs are related to the cost of preparing and delivering goods to a location set by the buyer,
shipping charges are stated separately, and
the prices are set in good faith and are reasonable.
Michigan
No
Sales tax is exempt if:
shipping charges are stated separately and
seller maintains records to show transactions used to determine sales tax separately.
Shipping costs related to a utility’s sale of natural gas, electricity, or artificial gas are still taxable.
Minnesota
Yes
Sales tax on shipping is exempt if the item is exempt.
Mississippi
Yes
Sales tax on shipping is exempt if the item is exempt.
Missouri
No
Shipping and handling charges in the state of Missouri are not taxable.
Montana
Not applicable
There is no sales tax in this state.
Nebraska
Yes
Sales tax is exempt if the buyer/customer paid the shipping charge separately from the product’s sale to the shipping carrier or delivery/freight company.
The delivery charge is paid directly to a delivery company by the customer, and not charged or collected by the seller.
A combined delivery fee includes both taxable and exempt items, and the seller properly allocates the charge (by weight or price) so only the taxable portion is subject to sales tax.
The item is exempt.
Oklahoma
No
Sales tax is exempt if shipping charges are stated separately.
Oregon
Not applicable
There is no sales tax in this state.
Pennsylvania
Yes
Sales tax on shipping is exempt if the item is exempt.
Rhode Island
Yes
Sales tax on shipping is exempt if the item is exempt.
South Carolina
Yes
Sales tax is exempt if:
The shipping charges are incurred after the title has passed to the buyer and
The item is exempt
South Dakota
Yes
Sales tax on shipping is exempt if the item is exempt.
Tennessee
Yes
Sales tax on shipping is exempt if the item is exempt.
Texas
Yes
Sales tax is exempt if:
The buyer/customer paid the shipping charge separately from the sale of the product to the shipping carrier, or delivery/freight company, or
separately stated shipping charges for direct mail and not retail sales, or
item is exempt.
Wyoming
No
Sales tax is exempt if shipping charges are stated separately.
Out-of-State Sales: Is Shipping Subject to Sales Tax?
Being an out-of-state seller makes identifying sales tax obligations more challenging. As previously mentioned, there’s a state-mandated law designed to regulate the taxation of sales from businesses with a sufficient economic presence. That rule is known as “nexus.”
A sales tax nexus is the main factor that determines if your business is subject to sales tax obligations. When your business triggers a nexus, you must also collect sales tax on shipping charges. This rule applies whether you’re an in-state or an out-of-state company.
However, to be specific, out-of-state sellers can establish an economic nexuswhen selling taxable goods in another state.
The criteria for creating an economic nexus vary per state. Despite that, you only need to take note of the following factors:
In most states, the standard threshold is $100,000 in sales within the state.
Many states have eliminated the 200-transaction threshold requirement, leaving only the sales threshold as their primary criterion.
Always check the specific requirements for each state, as thresholds can vary. For example, some states like California have higher sales thresholds, like $500,000.
Once your business meets these thresholds, it becomes responsible for collecting and remitting sales tax in the state. This establishes the fact that shipping also becomes taxable for out-of-state sales as long as your business has a nexus and the state’s rules make shipping taxable for the given transaction.
But as previously discussed, the taxability of shipping varies depending on multiple factors. Simplify your experience by letting sales tax experts at TaxHeroidentify and manage your sales tax obligations!
Should you charge sales tax on your shipping fee?
Charging sales tax on shipping fees can be situational. In that case, here are common cases you might encounter and the relevant options you can consider:
The shipping costs are separately stated and not included in the product’s total price: Some states may exempt the shipping service from sales tax under these conditions. Therefore, those states do not require charging sales tax.
The shipping costs are stated or itemized separately on the invoice: By clarifying that the shipping is a separate charge set apart from the price of taxable goods, some states may allow a sales tax exemption on shipping. However, this is not universally true; some states impose taxes on shipping regardless of whether it is separately stated.
Consider handling fees, not just shipping fees: In most cases, handling fees are subject to sales tax, while shipping may or may not be taxable, depending on the state. For this, the handling fee should have the sales tax applied to it if it is taxable in that state, and the shipping fee should have the sales tax applied to it only if it is taxable in that state.
Free shipping sale: Sales tax may still be applied to “free shipping sales” if the shipping costs are integrated into the product price because the sales tax is calculated on the entire, higher product price. Therefore, it’s best to state shipping costs separately (if you’re truly not charging for them as part of the product price) to qualify for sales tax exemptions on shipping in some states.
International Sales: If you’re selling goods outside of the US, then charging U.S. sales tax is typically not necessary, as cross-border sales are generally exempt from U.S. state sales tax. Instead, the customer in the destination country may be subject to import duties, Value Added Tax (VAT), or Goods and Services Tax (GST) as levied by their own country upon import. Sellers need to understand these international taxes and customs requirements to ensure a smooth delivery process.
Outside of these common scenarios, your business may still encounter more complex situations. To deal with those complicated cases with ease, you can ship off the sales tax burdens to TaxHero instead.
Why worry about sales tax when a sales tax expert can handle everything for you? Speak with our CEO, Lahari Neelapareddy, to learn how we can help simplify sales tax compliance for your business!
Understanding grocery tax by state is essential if you sell groceries, snacks, or beverages online. Sales tax laws vary widely across the U.S., and whether your food products are taxed depends on the state—and the type of food you’re selling.
Across the U.S., the sales tax on groceries varies. Some states fully exempt grocery items, while others charge full or reduced rates. As of April 2025, 13 states still impose some form of statewide sales tax on grocery items.
This guide will walk you through different food categories and guidelines on grocery tax by state.
What Counts as Grocery Food?
When states talk about “groceries,” they typically refer to non-prepared food intended for home consumption. Here’s a breakdown of commonly taxed categories:
Grocery food
Most states do not tax these items, but some still do. These are typical items found in grocery or convenience stores:
Fruits, vegetables, meats, grains, dairy
Canned goods, bottled water, packaged snacks
Non-carbonated drinks, baking ingredients
Prepackaged food
Some states tax these differently from unprocessed groceries. These are processed items ready for sale but not meant for immediate consumption:
Frozen meals
Bottled beverages
Packaged sandwiches or shelf-stable meals
Prepared food
Prepared food is ready for immediate consumption and includes:
Hot meals, salads from a bar, heated sandwiches
Items from delis, bakeries, or restaurants
Note: This guide does not cover restaurant sales tax since it’s outside the scope of grocery ecommerce.
Grocery Tax by State (2025)
The table below outlines the taxability of non-prepared grocery food by state. Most states that exempt grocery food exclude soft drinks, candy, and confections. States also charge sales tax for prepared food in restaurants and grocery stores as it is a meal.
Out of 45 states that impose some sales tax, 13 impose statewide sales tax on groceries.
Note: Sales tax regulations keep changing frequently. Bookmark this table to keep yourself updated about the latest developments regarding sales tax on grocery food.
STATE
ARE GROCERIES TAXABLE?
SALES TAX RATE
REDUCED GROCERY RATE
EXEMPTIONS (IF ANY)
Alabama
Yes
4%
3%
In accordance with Act 2023-554, the state sales and use tax rates on food was reduced effective September 1, 2023.
Alaska
not applicable
0%
–
None. There is no sales tax in this state.
Arizona
No
n/a
–
Some grocery food purchases may be subject to local sales tax.
Arkansas
Yes
6.50%
0.125%
Food and food ingredients are taxed at a reduced rate of 0.125% plus the applicable local rate.
California
No
n/a
–
Certain meals are taxed.
Colorado
No
n/a
–
Carbonated water, chewing gum, cold sandwiches, plants to grow food, candy, drinks, and beverages served in unsealed cups. Although there is no state-imposed sales tax on grocery food, cities and counties may levy local sales taxes at their discretion (e.g., Denver).
Connecticut
No
n/a
–
Delaware
not applicable
0%
–
None. There is no sales tax in this state.
Florida
No
n/a
–
Georgia
No
n/a
–
Hawaii
Yes
4%
–
Food purchased with federal food coupons or vouchers is exempt.
Idaho
Yes
6%
–
You can claim an average $100 income tax credit for purchasing grocery items in this state if you are a resident of Idaho.
Illinois
Yes
6.25%
1%
Food consumed off the premises until July 1, 2023, is exempt. After July 1, 2023, the tax rate on items will go back to 1%.
Indiana
No
n/a
–
Starting January 1, 2025, businesses that receive 75% of their total sales from sales of prepared food can now apply for a 50% sales tax exemption on their electric meter without a need for a utility check.
Tobacco, alcoholic beverages, candy, prepared food, dietary supplements, soft drinks, and food sold through vending machines are not exempt.
Louisiana
No
n/a
–
Food sold for preparation and consumption at home is exempt.
Maine
No
n/a
–
The exemption is limited to “grocery staples”(i.e., vegetables, meats, fish, dairy, bread, canned and boxed food products).
Maryland
Yes
6%
–
Sales of food to patients in a hospital, on vehicles operating in interstate commerce, etc., may be exempt
Massachusetts
No
n/a
–
Michigan
No
n/a
–
Food or salad bars, bottled or canned beverages, candy bars, cookies, and potato chips are not exempt.
Minnesota
No
n/a
–
Mississippi
Yes
5%
–
Only state sales tax and no local sales tax on groceries.
Missouri
Yes
4.225%
1.225%
Montana
not applicable
0%
–
None. There is no sales tax in this state.
Nebraska
No
n/a
–
Nevada
No
n/a
–
New Hampshire
not applicable
0%
–
None. There is no sales tax in this state.
New Jersey
No
n/a
–
New Mexico
No
n/a
–
New York
No
n/a
–
Carbonated beverages, sandwiches, confectionery, and candy are not exempt.
North Carolina
No
n/a
–
Sales of food are subject to local taxes.
North Dakota
No
n/a
–
Ohio
No
n/a
–
Oklahoma
No
4.50%
–
Oklahoma has officially eliminated the state sales tax on food and groceries as of August 29, 2024. For a detailed breakdown of what’s exempt and what’s not, check out the comprehensive list here. Although the state sales tax has been eliminated, local taxes remain unaffected. Residents may still face higher grocery taxes in the future if counties or cities decide to increase their local sales tax rates. However, under the new law, changes will not take effect until after July 1, 2025.
Oregon
not applicable
0%
–
None. There is no sales tax in this state.
Pennsylvania
No
n/a
–
It depends on the type of food and the location of where the food is sold.
Rhode Island
No
n/a
–
South Carolina
No
n/a
–
Unprepared food bought with federal food stamps is exempt from state sales tax but might still be subject to local sales tax.
South Dakota
Yes
4.20%
–
Tennessee
Yes
7%
4%
Grocery sales tax holiday (August 2023 – October 2023)
Texas
No
n/a
–
Utah
Yes
4.85%
1.75%
Taxed at a reduced rate. Utah is looking to remove state sales and use tax for food and food ingredients beginning January 1, 2025, if approved by voters.
Vermont
No
n/a
–
Virginia
Yes
4.30%
1%
Seeds & plants used to grow food, alcoholic beverages, and tobacco are not exempt.
Washington
No
n/a
–
West Virginia
No
n/a
–
Wisconsin
No
n/a
–
Some food snacks are excluded from this exemption.
Wyoming
No
n/a
–
*Local taxes may still apply in many states even when groceries are exempt from state-level tax.
Key Insights: States with No Food Tax (2025)
Here are some quick takeaways from the “grocery tax by states” table.
43 states and the District of Columbia impose some form of sales tax.
33 states + D.C. do not impose a state-level sales tax on grocery food items.
In many exempt states like Arizona, Colorado, Georgia, Kansas, Louisiana, North Carolina, and South Carolina, groceries are exempt at the state level but may still be taxed locally, depending on the city or county.
4 states — Hawaii, Idaho, Mississippi, and South Dakota — continue to tax groceries at the full state sales tax rate.
5 states — Alabama, Arkansas, Missouri, Tennessee, and Utah — apply a reduced state sales tax rate on groceries.
Oklahoma and Kansas eliminated their state-level grocery sales tax in August 2024 and January 2025, respectively.
Hawaii, Idaho, and Utah offer tax credits or rebates to reduce the impact on low-income households.
Arkansas applies the lowest effective grocery sales tax rate at just 0.125%.
What This Means for Your Ecommerce/CPG Food Business
If you’re selling food, beverages, or snacks online, the rules on food tax vary wildly across the country—and they change often. You need to consider:
Where your customers are located
Whether you sell via marketplace or direct
Whether your product qualifies as exempt grocery
TaxHero Makes Grocery Sales Tax Easy
Staying compliant with sales tax on food is complicated, but TaxHero simplifies it all for you. We help ecommerce and CPG brand sellers:
Understand state-by-state tax rules
Apply correct tax rates to food items
Stay ahead of legislative changes
Automate tax collection and remittance
Navigating grocery tax by state is essential for any online food seller in 2025. By understanding which items are taxable and in which states, you can better price your products, avoid penalties, and improve customer experience. Book a discovery call and let our experts guide you.
Clothing ranks among the most online shopped items in the USA, with around 51% share in the total online sales, as reported by Statista. Thus making fashion a vital expenditure head for consumers and a source of revenue for businesses. And as either a seller or a buyer, it is important to remember that sales tax on clothing varies by state, with different rates and exemptions.Sales tax on clothes differs because some states exempt them to a certain degree, although they are tangible personal property. Some states categorize clothes as a necessity and, therefore, fully or partially exempt them from sales tax. Is there a tax on clothes in your state? Our guide has got you covered. Find out if clothes are taxed, the sales tax rate, and which states exempt sales tax on clothing.
States without Sales Tax on Clothing
Seven states exempt sales tax on clothing. These states are Massachusetts, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. See the table below for more information.In addition to these states, five states: Alaska, Delaware, Montana, New Hampshire, and Oregon, don’t charge any state sales tax for any items.
List of US States and their Sales Tax on Clothing
Clothing sales tax rates vary significantly among different states. There are also variations in the sales tax exemptions on clothes in different states.Note: Sales tax regulations keep changing frequently. Bookmark this table to keep yourself updated about the latest developments regarding sales tax on clothing.
STATE
IS CLOTHING TAXABLE?
SALES TAX RATE
EXEMPTIONS (if any)
Alabama
Yes
4%
Alaska
Not applicable
0%
Alaska’s state-wide sales tax rate is 0%
Arizona
Yes
5.60%
Arkansas
Yes
6.50%
California
Yes
7.25%
Exemptions allowed for (1) new children’s clothing sold to nonprofit organizations for free distribution to elementary school children and (2) used clothing sold by certain thrift stores benefiting the chronically ill.
Colorado
Yes
2.90%
Connecticut
Yes
6.35%
Clothing and footwear that costs more than $1,000 is subject to the luxury goods tax. Certain exemptions apply.
Delaware
Not applicable
0%
None. There is no sales tax in this state
Florida
Yes
6%
Georgia
Yes
4%
Hawaii
Yes
4%
Idaho
Yes
6%
An exemption applies to purchases of clothes and footwear by nonsale clothiers that provide free clothes to the needy.
Illinois
Yes
6.25%
Indiana
Yes
7%
Iowa
Yes
6%
Kansas
Yes
6.50%
Kentucky
Yes
6%
Louisiana
Yes
5.00%
Maine
Yes
5.50%
Maryland
Yes
6%
Massachusetts
NO
n/a
The exemption is limited to clothing and footwear costing $175 or less. Specific clothing and footwear designed for athletic activity or protective use are taxable. Taxable items’ sales tax rate is 6.25%.
Michigan
Yes
6%
Minnesota
NO
n/a
Accessories, most protective equipment, sports and recreational articles, and fur clothing are taxable. Taxable items’ sales tax rate is 6.88%.
Mississippi
Yes
7%
Clothing, footwear, and accessories used as wardrobes in the production of motion pictures are exempt.
Missouri
Yes
4.225%
Montana
Not applicable
0%
None. There is no sales tax in this state
Nebraska
Yes
5.50%
Nevada
Yes
6.85%
New Hampshire
Not applicable
0%
None. There is no sales tax in this state
New Jersey
NO
n/a
Fur clothing, accessories, sport or recreational or protective equipment are taxable. Protective equipment is only exempt when purchased for the user’s daily work and worn as a work uniform. Taxable items’ sales tax rate is 6.63%.
New Mexico
Yes
4.875%
New York
NO
n/a
The exemption is limited to clothing and footwear costing less than $110 per item or pair. Clothing and footwear costing $110 or more per item or pair are taxable. Taxable items’ sales tax rate is 4%.
North Carolina
Yes
4.75%
Separately stated alteration charges in connection with the sale of clothing are exempt.
North Dakota
Yes
5%
Ohio
Yes
5.75%
Narrow exemption for protective clothing used exclusively in a regulated manufacturing area.
Oklahoma
Yes
4.50%
Oregon
Not applicable
0%
None. There is no sales tax in this state
Pennsylvania
NO
n/a
Accessories, fur articles, ornamental and formal wear, and sports clothing are taxable. Taxable items’ sales tax rate is 6%.
Rhode Island
NO
n/a
Accessories and special clothing designed primarily for athletic or protective use are taxable. The clothing exemption only applies to $250 of the sales price per item. Taxable items’ sales tax rate is 7%.
South Carolina
Yes
6%
Certain protective clothing required for working in a clean room environment is exempt.
South Dakota
Yes
4.50%
Tennessee
Yes
7%
An exemption applies to used clothing sold by certain nonprofit organizations.
Texas
Yes
6.25%
Utah
Yes
4.85%
Vermont
NO
n/a
Clothing accessories or equipment, protective equipment, and sports or recreational equipment are taxable. Taxable items’ sales tax rate is 6%.
Virginia
Yes
4.30%
Exemptions apply to certain protective clothing furnished to employees engaged in research activities, mining, and manufacturing; and foul-weather clothing worn by commercial watermen.
Washington
Yes
6.50%
West Virginia
Yes
6%
Wisconsin
Yes
5%
Wyoming
Yes
4%
*The data included in the table is based on statewide sales tax and does not consider local sales tax rates.
Clothing Tax by States – Key Takeaways
Here are some quick takeaways from the “clothing tax by states” table.
Of 45 states that impose sales tax, 38 states impose sales tax on clothing.
Alaska has no state sales tax, but many jurisdictions impose local sales tax on clothing and footwear.
Massachusetts and Rhode Island only tax the amount exceeding the exemption limit. For instance, if a clothing item costs $300 in Rhode Island, you only have to pay tax for the additional $50 and not the total price of $300.
Clothing Sales Tax Holidays
Some states do not exempt tax on clothing but offer clothing sales tax holidays that may last from several days to weeks. Take note that sales tax holidays vary annually.Most clothing tax holidays happen from July to August for the back-to-school season. Here’s the list of states offering 2024 tax holidays on clothing:
Arkansas
Connecticut
Florida
Iowa
Maryland
Mississippi
Missouri
New Mexico
Ohio
Oklahoma
South Carolina
Tennessee
Texas
West Virginia
Do online sellers need to collect clothing tax?
Yes, online sellers must collect and remit sales tax on clothing if they have met nexus in the state.
I sell fashion and I need help!
There is always room for learning when it comes to sales tax. As an online seller, keeping a record of everything by yourself can be challenging, so you should consider outsourcing this complex business aspect. TaxHero covers everything from determining nexus to identifying the taxability of your goods. The regulations and laws are often changing, and you must stay updated. TaxHero is an excellent solution, offering its all-inclusive, full-stack services to help online businesses with all sales tax matters. Schedule a chat with our CEO and learn how we can help you today.Cloud-based services and Software-as-a-Service (SaaS) businesses have become more popular worldwide. According to Statista, the global SaaS market is projected to be worth $197 billion by the end of 2023. The increasing popularity of this business model comes with sales tax implications too. Software-as-a-Service providers often need help finding out whether their services are taxable or not in their operating state. Vendors must stay on top of sales tax laws to avoid legal consequences and penalties. This blog addresses the questions about SaaS taxability and provides a state-by-state guide about the sales tax regulations for SaaS-based businesses.
What is SaaS Sales Tax?
SaaS, short for Software-as-a-Service, is a business model providing electronic access to software. The software is hosted in one location, and the business offers users the option to purchase a subscription or license to access it. The SaaS provider owns, operates, and maintains the software application.The customer only purchases access to the software through the internet and does not get ownership rights to download or modify the software application. For example, TaxHero is a SaaS-based business. Some other examples of SaaS businesses are Microsoft, Google Workspace, Slack, Adobe, and the Shopify platform. Sales tax for SaaS businesses can be tricky and complex as some states treat it as tangible personal property, similar to product businesses. While on the other hand, some states consider it a service that may be subject to or exempt from sales tax depending on different factors. Learn more about sales tax on services in this blog.
Do all States Charge Sales Tax on Software-as-a-Service?
No, not all states charge sales tax on SaaS.Besides the states with no sales tax, some other states wholly or partially exempt SaaS products from sales tax. This situation can be confusing and complicate navigating SaaS services’ sales tax compliance requirements. Understanding SaaS regulations ensures you meet your sales tax obligations appropriately.
Which States Charge Sales Tax on SaaS?
Before operating a SaaS business in any state, you must determine if your state charges sales tax. Here is a state-by-state guide about SaaS taxability.
STATE
IS SAAS TAXABLE?
SALES TAX RATE
SPECIFICATIONS
Alabama
Yes
4%
All sales of software, including SaaS, are taxable.
Alaska
Yes
up to 7.50% local sales tax
While SaaS products are not subject to a statewide sales tax in Alaska, they are taxed in many home rule charters in the state.
Arizona
Yes
5.60%
Software delivery electronically on a subscription basis is considered tangible personal property.
Arkansas
No
n/a
Software delivered electronically is considered non-tangible and non-taxable.
California
No
n/a
Only if the possession or control of the software is transferred to the user/customer it is considered taxable.
Colorado
No
n/a
Generally, Software-as-a-Service is exempt from sales tax.
Connecticut
Yes
6.35%
If SaaS is used for personal use, then taxed at the full state sales tax rate. If SaaS is used for business, then it is only taxed at the rate of 1%.
Delaware
Not applicable
0%
None. There is no sales tax in this state
Florida
No
n/a
Cloud computing services and the sale of software electronically are not subject to Florida sales tax
Georgia
No
n/a
Electronic delivery of software is not considered tangible personal property.
Hawaii
Yes
4%
It does not have a sales tax, but the general excise tax applies to certain goods and services, including SaaS.
Idaho
No
n/a
Since the user has no permanent right to use the software, it is not defined as a taxable service.
Illinois
No
n/a
Generally, Software-as-a-Service is exempt from sales tax.
Indiana
No
n/a
Exempted if the customer has no ownership or control over the software or server.
Iowa
Yes
6%
Taxable if for personal use. If for business use, then SaaS is exempt.
Kansas
No
n/a
SaaS services are not taxed as long as their ownership is not transferred to the users and they access the software remotely.
Kentucky
Yes
6%
SaaS services performed before January 1, 2023, are exempt.
Louisiana
No
n/a
Starting January 1, 2025, Saas will now be taxable in the state of Louisiana. Additionally, transactions where the customer pays a fee to use a website or software without owning it will also be subject to sales tax. Digital Products (i.e., ebooks, downloadable video content, mobile apps) are also taxable.
Maine
No
n/a
Prewritten and electronically delivered software are subject to sales tax, but SaaS services are exempt.
Maryland
Yes
6%
SaaS intended for business use is exempt from sales tax.
Massachusetts
Yes
6.25%
The tax is applied on the use of the software, irrespective of the transfer of ownership
Michigan
No
n/a
As long as the software is accessed electronically only, it is not taxable.
Minnesota
No
n/a
If the seller owns the application, SaaS services are not taxable.
Mississippi
No
n/a
SaaS services are not taxable as long as the software is stored on a server located outside the state.
Missouri
No
n/a
The service provider is taxed for tangible personal property used to provide the service purchased or used in this state.
Montana
Not applicable
0%
None. There is no sales tax in this state
Nebraska
No
n/a
Computer software is taxable, but SaaS services are not defined as computer software.
Nevada
No
n/a
Electronically delivered software is not considered tangible personal property.
New Hampshire
Not applicable
0%
None. There is no sales tax in this state
New Jersey
No
n/a
Software is not taxed as long as it is not electronically delivered to the user. However, Software-as-a-Service businesses that meet the definition of an information service are subject to sales tax.
New Mexico
Yes
4.875%
Custom and canned software and computer services are taxable.
New York
Yes
4%
Access to computing power is non-taxable in the state.
North Carolina
No
n/a
Since the software is not downloaded on the user’s computer, it is not taxed.
North Dakota
No
n/a
Computer software is taxed when transferred and does not require a subscription.
Ohio
Yes
5.75%
Tax-exempt when SaaS is employed for personal use.
Oklahoma
No
n/a
SaaS is not defined as a taxable service.
Oregon
Not applicable
0%
None. There is no sales tax in this state
Pennsylvania
Yes
6%
Computer software is taxable if the user is located within the state.
Rhode Island
Yes
7%
All prewritten software, whether vendor-hosted or not, is subject to SaaS sales tax.
South Carolina
Yes
6%
Software-as-a-Service is considered a communications service and, therefore, subject to sales tax
South Dakota
Yes
4.50%
Electronically delivered software is considered tangible personal property.
Tennessee
Yes
7%
SaaS is subject to sales and uses tax, irrespective of a customer’s method of use.
Texas
Yes
6.25%
SaaS is 80% taxable and 20% exempt from sales tax as they are considered part of a data processing service.
Utah
Yes
4.85%
License fees for remotely accessed software and cloud computing applications are taxable.
Vermont
No
n/a
Prewritten and downloadable software are considered taxable
Virginia
No
n/a
SaaS transactions and maintenance services are exempt from sales and use tax.
Washington
Yes
6.50%
All types of software are taxable in the state.
West Virginia
Yes
6%
The sales of qualified data processing services are non-taxable.
Wisconsin
No
n/a
The services are exempt from sales tax if the vendor owns and possesses the software.
Wyoming
No
n/a
The services are non-taxable as long as the user doesn’t get any tangible personal property (such as a disk drive).
SaaS is taxable in the District of Columbia as all custom and prewritten software are taxed.If SaaS services are taxable in your state, you must collect sales tax on SaaS subscriptions from your customers. You must have a Private Letter Ruling for specific guidance about SaaS taxability in your state to get the proper compliance guidance for your business.
TaxHero helps your SaaS business stays compliant.
Complying with SaaS sales tax laws and regulations can be a complex and time-consuming. TaxHero experts can simplify this job by handling all the compliance requirements. Our CEO can help walk you through our full-stack all-inclusive sales tax services.Navigating the complex and ever-changing sales tax on services can be challenging for businesses and is usually more complicated than understanding sales tax on goods.The common misunderstanding is that only physical goods are subject to sales tax, and services are somehow exempt. However, clarifying this misconception is essential because many businesses are unaware of the changing rules and regulations when collecting sales tax on services. In recent years, an increasing number of states have started requiring sales tax on services and are continuously updating their guidelines on what is taxable and what is exempt.This guide aims to clarify sales tax on services across the states and serves as a valuable resource to streamline sales tax compliance for businesses and tax professionals.
Goods vs. Services: What’s the difference?
To better understand how sales tax guidelines distinguish between “goods” and “services,” let’s define these terms and highlight their fundamental differences.
Goods. Defined as TPP or “Tangible Personal Property” items, such as furniture, automobile, jewelry, beauty products, clothing, appliances, electronics, food items, and more.
Services. Refers to intangible activities that may or may not produce a tangible good. Services include legal, consulting, advertising, personal grooming, repairs and maintenance, and more.
What are the different types of “Services”?
Services cover many activities, but we can make things easier to understand by grouping them into a few broad categories.
Business Services – includes consulting, advertising, computer services, lobby, and human resource services.
Personal Services – includes various self-improvement and personal grooming services, such as dry cleaning, salons, and spas. Animal grooming is also included in personal services and is taxable in some states.
Professional Services – services provided by licensed and certified professionals such as accountants, lawyers, physicians, attorneys, doctors, and architects. These services are taxable only in some states due to powerful lobbying.
Services to TPP – refer to services directly related to the sale of tangible personal property (i.e., products). These services include repairs and maintenance, shipping or delivery, warehousing, engineering, installation, and rental services.
Amusement and Recreation Services – services that provide entertainment, fun, and enjoyment to individuals. They include amusement parks, sports events, concerts, and sightseeing tours.
Service to Real Property – services directly related to immovable property (i.e., buildings) and real estate. They include building improvement, construction, architectural, property management, property maintenance (i.e., lawn service, cleaning/janitorial services), and broker services.
Some other services are educational, healthcare, and nonprofit organization services. Typically, these services are exempt from sales tax in all states.
Do I Charge Sales Tax on Services?
Each state has its rules and regulations on what type of service to charge sales tax. Just like products, not all services are subject to sales tax. New sales tax regulations are being implemented frequently on services as service-based businesses grow in the United States.As a business, you must determine whether you need to charge sales tax on services before running a service-based business.To determine if your business is eligible to collect sales tax on the services you provide, there are a few crucial factors to consider:
Taxability of Services: Understanding the taxability rules for services in each state where you conduct business is vital. Each state has different guidelines regarding which services are subject to sales tax.
Nexus Requirements: You only need to focus on the states where your business has established a physical and economic nexus. Nexus refers to having a significant presence or connection in a state that triggers tax obligations.
You should register for a sales tax permit in states where your business meets these criteria. This registration ensures compliance with sales tax regulations specific to your services.
Sales Tax on Services by States
The following table summarizes each state’s general services category subject to sales tax.Note: Within each category of services, each state can have different regulations for sales tax and what is taxable within that category. Please refer to the State’s Department of Revenue website for guidelines on whether a specific service is taxable.
STATE
ARE SERVICES TAXABLE?
SALES TAX RATE
EXEMPTIONS
Alabama
No
n/a
Services are generally not taxable.
Alaska
not applicable
0%
None. There is no sales tax in this state.
Arizona
No
n/a
The majority of all service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Job Printing
Pipeline
Prime Contracting
Private Car Line
Telecommunications
Transient Lodging
Transporting
Utilities
Arkansas
Yes
6.50%
Personal and business services, services to TPP, amusement, and services to real property
California
No
n/a
None
Colorado
No
n/a
None
Connecticut
No
n/a
The majority of all service-based transactions, such as medical services and engineering, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Advertising or public relations services
Computer and Data Processing
Credit Information and Reporting
Exterminating Services
Dry Cleaning Services
Management
Delaware
not applicable
0%
None. There is no sales tax in this state.
Florida
No
n/a
The majority of all service-based transactions, such as professional services, advertising, and salon services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Detective and other protection services
Fingerprinting services
Non-residential cleaning and pest control services
Charges for admission to any place of amusement, sport, or recreation
Georgia
No
n/a
None
Hawaii
Yes
4%
Personal and business services, services to TPP, amusement, and services to real property
Idaho
No
6%
Taxable services: Food/drink or serving services, accommodation services, Intrastate air transportation services, manufacturing or production services, Taxidermy services, tire service
Illinois
No
n/a
None
Indiana
No
n/a
None
Iowa
No
n/a
The majority of service-based transactions, such as advertising, employee service, and construction, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Building maintenance like janitorial and cleaning services (non-residential only)
Alteration and garment repair
Barber and beauty services
Photography
Jewelry and watch repair
Landscaping, lawn care, and tree trimming and removal
Sewing and stitching
Tanning beds or tanning salons
Demolition
Kansas
Yes
6.50%
Services to TPP and amusement
Kentucky
Yes
6%
Recreation
Louisiana
No
n/a
The majority of service-based transactions, such as professional services, advertising, and employment services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Coating, wrapping, and galvanizing pipe and other property
Laundry, cleaning, pressing, and dyeing services
Repairs to autos, appliances, equipment, and other property
Storage space for clothing, furs, and rugs
Vehicle storage and parking
Cold storage space
Hotel occupancy
Printing services
Telecommunications services
Maine
Yes
5.50%
Personal services and services to TPP
Maryland
No
n/a
The majority of service-based transactions, such as professional services and advertising, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Manufacturing or producing personal property
Transportation of electricity or natural gas
Certain telecommunications services
Credit reporting services
Security services
Commercial cleaning and janitorial services
Massachusetts
No
n/a
None
Michigan
No
n/a
None
Minnesota
Yes
6.88%
Personal and business services, services to TPP, amusement, and services to real property
Mississippi
Yes
7%
Business services, services to TPP, amusement, and services to real property
Missouri
No
n/a
The majority of service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Admissions to places of amusement, entertainment and recreation, games, and athletic events
Utilities like electricity, water, or gas to domestic, commercial or industrial users
Phone, mobile, and telegraph services
Hotel stays, restaurant meals, and drinks from places like hotels, diners, and bars
Transportation services like taxis, rideshares, buses, etc.
Montana
not applicable
0%
None. There is no sales tax in this state.
Nebraska
Yes
5.50%
Personal and business services, services to TPP, amusement, and services to real property
Nevada
No
n/a
The majority of service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Production, fabrication, processing, printing, and imprinting services
Food or beverage preparation services
New Hampshire
not applicable
0%
None. There is no sales tax in this state.
New Jersey
No
n/a
The majority of service-based transactions, such as professional services, advertising, and interior design services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Information services
Investigation and detective services
Mail processing services for printed advertising/promotional material
Massage services
Sign fabrication and installation services
Servicing or repair of real property
Tanning services
Tattooing
Telecommunications
Utility services
Telephone answering services received by customers in New Jersey
New Mexico
Yes
4.875%
Personal, professional, and business services, services to TPP, amusement, and services to real property
New York
No
n/a
The majority of service-based transactions, such as professional services, advertising, and laundry and dry cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Utility services
Cleaning, maintenance, and repair services
Telecommunication (phone and mobile) services
Information services
Interior decorating and design services
Protective and detective services
Hotel occupancy
Admission to places of amusement
Social and athletic club dues
Certain cabaret services
North Carolina
No
n/a
The majority of service-based transactions, such as professional services, advertising, and janitorial services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Service Contracts
Video Programming Services
Dry Cleaning and Laundry Services
Repair, Maintenance, and Installation Services
Telecommunications Services and Ancillary Services
Prepaid Telephone Calling Services
Satellite Digital Audio Radio Services
Admission Charges to an Entertainment Activity
North Dakota
Yes
5%
Recreation
Ohio
No
n/a
The majority of service-based transactions, such as professional services and advertising, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Short-term hotel room rentals
Private investigation or security services
Information services via 1-900 calls
Producing goods from customer-supplied materials
Exterminating services
Physical fitness facility services
Recreation and sports club services
Vehicle washing, cleaning, waxing, polishing, or painting services
Towing services for motor vehicles
Laundry and dry cleaning services, excluding coin-operated
Business-related data processing, computer, and electronic information services
Certain telecommunication services
Satellite broadcasting services
Personal care services (skin care, cosmetics, manicures, pedicures, hair removal, tattoos, piercings, tanning, massage), excluding hair care
In-state person transportation, excluding public transit and commercial airlines
Snow removal services with annual sales over $5,000
Storage of tangible personal property, except for inventory storage
Oklahoma
No
n/a
The majority of service-based transactions, such as professional services and cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Advertising services
Admissions, dues, or fees to clubs, amusement venues, sports events, or for using facilities related to entertainment, recreation, or athletics.
Catering services
Computer services involving prewritten programs
Fabrication services
Florist services
Hotel accommodation
Tanning salons
Telecommunications services sourced to Oklahoma
Oregon
not applicable
0%
None. There is no sales tax in this state.
Pennsylvania
No
n/a
The majority of service-based transactions, such as professional services, advertising, and laundry and dry cleaning services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Adjustment and collection services
Lobbying services
Disinfecting or pest control service
Catering services
Help supply services
Credit reporting services
Lawn care services
Premium cable services
Self-storage services
Rhode Island
No
n/a
None
South Carolina
Yes
6%
Personal services, services to TPP, and amusement
South Dakota
Yes
4.50%
Personal, professional, and business services, services to TPP, amusement, and services to real property
Tennessee
No
n/a
Taxable services include: Repair and installation of TPP or computer software, cleaning of TPP, lodging services, animal bathing, Telecommunication and Television programming services, parking, ancillary services
Texas
Yes
6.25%
Business services, services to TPP, amusement, and services to real property
Utah
No
n/a
The majority of service-based transactions, such as professional services, advertising, and beauty services, are not subject to sales tax. However, there are specific situations where certain services are taxable like:
Laundry and dry-cleaning services
Assisted cleaning or washing of tangible personal property
Use of assisted amusement devices
In-state telecom services
Vermont
Yes
6%
Amusement and services to TPP
Virginia
No
n/a
The majority of service-based transactions, such as professional services, clothing alterations, and repair services, are not subject to sales tax. However, if a business offers services that include creating or manufacturing a tangible personal product, it is seen as a retail sale and, therefore, is subject to sales tax.
Washington
Yes
6.50%
Personal and business services, services to TPP, and amusement
West Virginia
Yes
6%
Business services, services to TPP, amusement, and services to real property
Wisconsin
Yes
5%
Services to TPP, amusement, and services to real property
Wyoming
Yes
4%
Amusement and services to TPP
Improve your Sales Tax Compliance with TaxHero
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