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How is Sales Tax Calculated?

Sales tax depends on where the order is fulfilled, whether the merchant has nexus in that state, and whether that state is configured in CMS Max Tax Locations.

45

States with statewide sales tax

1

State with local sales tax only: Alaska

4

States with no general statewide sales tax

TaxJar resources for CMS Max

Use these related guides to move between TaxJar setup, tax calculation rules, and filing options.

Resource Use it for Link
TaxJar Overview Start here for the CMS Max TaxJar integration, tax calculation, reporting, and where the related guides fit. View overview
Configure Tax Collection Learn how to add CMS Max Tax Locations, pickup settings, product tax codes, and TaxJar calculation settings. Open setup guide
TaxJar AutoFile Understand TaxJar filing enrollment, AutoFile fees, and why merchants need their own TaxJar API key. Review AutoFile

The simple rule

In most states, sales tax is calculated based on where the customer receives the goods. This is called destination-based sourcing. For in-store pickup and curbside pickup, the store location is usually the fulfillment location.

A few states use origin-based or modified-origin rules for some in-state sales, so tax may be based on the store location instead. Billing address is not the tax location.

CMS Max Tax Locations

CMS Max only calculates tax for states and tax locations the merchant has configured. Those settings should reflect where the merchant has nexus and is required to collect tax.

Nexus comes first

Nexus is the legal connection that creates a sales tax collection obligation. Nexus can come from a physical presence, employees, inventory, affiliates, or economic activity over a state threshold.

Economic nexus thresholds change. This page was last reviewed on June 13, 2026 using Sales Tax Institute, TaxJar, and Avalara as reference sources. It is general information, not tax or legal advice.

States with tax

Most states have statewide sales tax and an economic nexus threshold for remote sellers.

Local-only tax

Alaska has no statewide sales tax, but many local jurisdictions may require collection under the Alaska Remote Seller Sales Tax Code.

No statewide sales tax

Delaware, Montana, New Hampshire, and Oregon have no general statewide sales tax.

Sales tax and economic nexus by state

Use this table as a planning reference for CMS Max Tax Locations. The threshold column shows when a remote seller may need to register, collect, and remit sales tax.

Reviewed June 13, 2026

State Sales tax? Current nexus threshold Measurement period What generally counts When to register or collect
Alabama Tax state $250,000 in retail sales plus specified activities Previous calendar year Retail sales; marketplace sales excluded January 1 after the year threshold is exceeded
Alaska Local only $100,000 for participating local jurisdictions Current or previous calendar year under the Remote Seller Sales Tax Code Gross sales; marketplace sales included After a city or borough adopts the code; local timing applies
Arizona Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales excluded Register once threshold is met; collection begins after the state timing window
Arkansas Tax state $100,000 in taxable sales or 200 transactions Current or previous calendar year Taxable sales; marketplace sales excluded Next transaction after threshold is met
California Tax state $500,000 in sales Current or previous calendar year Gross sales of tangible personal property; marketplace sales included The day the threshold is exceeded
Colorado Tax state $100,000 in retail sales Current or previous calendar year Retail sales; marketplace sales excluded First day of the month after the 90th day after exceeding threshold
Connecticut Tax state $100,000 in retail sales and 200 transactions 12-month period ending September 30 Retail sales; marketplace sales included October 1 of the year the threshold is crossed
Delaware No statewide tax N/A N/A N/A No general statewide sales tax
Florida Tax state $100,000 in taxable sales Previous calendar year Taxable sales; marketplace sales excluded First day of the calendar year after threshold is met
Georgia Tax state $100,000 in retail sales or 200 sales Current or previous calendar year Retail sales of tangible personal property; marketplace sales excluded Next transaction after threshold is met
Hawaii Tax state $100,000 in gross sales or 200 transactions Current or immediately preceding calendar year Gross sales; marketplace sales included First day of the month after threshold is met
Idaho Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales included Next transaction after threshold is met
Illinois Tax state $100,000 in sales Preceding 12-month period, reviewed quarterly Retail sales; marketplace sales excluded Determine quarterly based on the prior 12 months
Indiana Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales excluded Next transaction after threshold is met
Iowa Tax state $100,000 in gross sales Current or immediately preceding calendar year Gross sales; marketplace sales included First day of the next calendar month at least 30 days after threshold is exceeded
Kansas Tax state $100,000 in gross sales Current or immediately preceding calendar year Gross sales; marketplace sales included Next transaction after threshold is met
Kentucky Tax state $100,000 in gross sales or 200 transactions Current or previous calendar year Gross sales; marketplace sales included First of the month following 30 days after threshold is met
Louisiana Tax state $100,000 in gross sales Current or previous calendar year Gross sales for remote sellers; marketplace sales included Apply within 30 days; begin collection within 60 days
Maine Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales generally excluded when marketplace collects First day of the first month at least 30 days after threshold is exceeded
Maryland Tax state $100,000 in gross sales or 200 transactions Current or previous calendar year Gross sales; marketplace sales included First day of the month after threshold is met
Massachusetts Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales excluded if marketplace collects First day of the first month that starts two months after threshold is exceeded
Michigan Tax state $100,000 in gross sales or 200 transactions Previous calendar year Gross sales; marketplace sales included January 1 after the year threshold is exceeded
Minnesota Tax state $100,000 in retail sales or 200 retail sales 12-month period ending on the last day of the most recently completed calendar quarter Retail sales; marketplace sales included First day of the calendar month no later than 60 days after threshold is met
Mississippi Tax state More than $250,000 in gross sales Prior 12-month period Gross sales; marketplace sales excluded Next transaction after threshold is met
Missouri Tax state $100,000 in taxable sales Previous 12-month period reviewed quarterly Taxable sales of tangible personal property, including marketplace sales No later than 3 months after the close of the quarter threshold is exceeded
Montana No statewide tax N/A N/A N/A No general statewide sales tax
Nebraska Tax state $100,000 in retail sales or 200 transactions Current or previous calendar year Retail sales; marketplace sales included First day of the second calendar month after threshold is exceeded
Nevada Tax state $100,000 in retail sales or 200 transactions Current or previous calendar year Retail sales; marketplace sales included First day of the calendar month at least 30 days after threshold is met
New Hampshire No statewide tax N/A N/A N/A No general statewide sales tax
New Jersey Tax state $100,000 in gross sales or 200 transactions Current or previous calendar year Gross sales; marketplace sales included Collect on first taxable sale; 30-day grace period to register
New Mexico Tax state $100,000 in taxable sales Previous calendar year Taxable sales; marketplace sales excluded January 1 after the year threshold is exceeded
New York Tax state $500,000 in sales and more than 100 sales Immediately preceding four sales tax quarters Gross receipts from sales of tangible personal property; marketplace sales included Register within 30 days and begin collecting 20 days later
North Carolina Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales included Next transaction after threshold is met
North Dakota Tax state $100,000 in taxable sales Current or previous calendar year Taxable sales; marketplace sales excluded Following calendar year or 60 days after threshold is met, whichever is earlier
Ohio Tax state $100,000 in retail sales or 200 transactions Current or previous calendar year Retail sales; marketplace sales included Next day after threshold is met
Oklahoma Tax state $100,000 in aggregate sales of tangible personal property Current or preceding calendar year Taxable sales; marketplace sales excluded First calendar month after the month threshold is met
Oregon No statewide tax N/A N/A N/A No general statewide sales tax
Pennsylvania Tax state $100,000 in gross sales Prior calendar year for mandatory economic nexus Gross sales on all channels, including taxable, exempt, and marketplace sales April 1 after the calendar year threshold is exceeded
Rhode Island Tax state $100,000 in gross sales or 200 transactions Immediately preceding calendar year Gross sales; marketplace sales included January 1 after the year threshold is exceeded
South Carolina Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales included First day of the second calendar month after nexus is established
South Dakota Tax state $100,000 in gross revenue Current or previous calendar year Gross revenue; marketplace sales included First full month at least 30 days after threshold is met
Tennessee Tax state $100,000 in retail sales Previous 12-month period Retail sales; marketplace sales excluded First day of the third month after the month threshold is met
Texas Tax state $500,000 in gross revenue Preceding 12 calendar months Gross revenue including taxable, nontaxable, and exempt sales; marketplace sales included First day of the fourth month after the month threshold is exceeded
Utah Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales excluded Next transaction after threshold is met
Vermont Tax state $100,000 in gross sales or 200 transactions Prior four calendar quarters Gross sales; marketplace sales included First of the month after 30 days from the end of the quarter threshold is exceeded
Virginia Tax state $100,000 in retail sales or 200 transactions Current or previous calendar year Retail sales; marketplace sales excluded Next transaction after threshold is met
Washington Tax state $100,000 in gross income Current or preceding calendar year Gross sales; marketplace sales included First day of the month at least 30 days after threshold is met
West Virginia Tax state $100,000 in gross sales or 200 transactions Current or preceding calendar year Gross sales; marketplace sales included Next transaction after threshold is met
Wisconsin Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales included; registration may not be required if all sales are through collecting marketplaces Next transaction after threshold is met
Wyoming Tax state $100,000 in gross sales Current or previous calendar year Gross sales; marketplace sales excluded Next transaction after threshold is met

Important state notes

  • Kentucky: As of June 13, 2026, Kentucky still has a $100,000 or 200-transaction threshold. Its 200-transaction threshold is scheduled to be removed on August 1, 2026.
  • Illinois, Utah, North Carolina, South Dakota, Wisconsin, Wyoming, and Alaska: Recent rule changes removed transaction thresholds, so the current table shows sales-only thresholds where applicable.
  • Pennsylvania: Mandatory economic nexus is shown at $100,000; lower notice/reporting rules may still matter in certain cases.

How CMS Max decides whether tax is charged

  1. The order's fulfillment method determines the tax location: delivery address for shipping/local delivery, or store address for pickup.
  2. CMS Max checks whether that state/location is configured in Tax Locations.
  3. If configured, TaxJar calculates the applicable state, county, city, and special district rates for that location.
  4. If the state/location is not configured, CMS Max does not charge sales tax for that order.

Need help configuring tax locations?

CMS Max can help configure the TaxJar integration and CMS Max Tax Locations, but the merchant is responsible for confirming where they have nexus and are required to collect tax.

Contact CMS Max

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