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      Origin-Based Sales Tax

      Is your business located in an origin-based state or destination-based state for charging sales tax?

      We are not tax professionals, for any questions regarding taxes or tax rates, our answers cannot be construed as legal advice. Always consult a tax professional for how to properly collect sales tax for your business.

      Overview Configure Origin-Based Sales Tax
      Origin-Based States Additional Resources
      Destination-Based States  

      Overview

      • Charging the correct sales tax can be tricky. The starting point is determining if your business is located in a state that charges origin-based or destination-based tax.
      • For businesses located in an origin-based sales tax state, you should be charging everyone in your state the sales tax rate where your business is located. 
      • For businesses located in a destination-based tax state, the sales tax rate is based on where the item will be delivered.

      Origin-Based States

             
      Arizona California* Illinois Mississippi
      Ohio Pennsylvania Tennessee Texas
      Utah Virginia Missouri  

       * California is unique. It’s a modified origin state where state, county, and city taxes are based on the origin, but district taxes are based on the destination (the buyer).

      Destination-Based States

            
      Alabama Arkansas Colorado District of Columbia
      Florida Georgia Hawaii Idaho
      Indiana Iowa Kansas Kentucky
      Louisiana Maine Michigan Minnesota
      Nebraska Nevada New Jersey New Mexico
      New York North Carolina North Dakota Oklahoma
      Rhode Island South Carolina South Dakota Vermont
      Washington Wisconsin Wyoming  

      Configure Origin-Based Sale Tax

      • In Admin, navigate to Settings > Commerce > Sales Tax.
      • Enter (or confirm) your store locations with the appropriate sales tax for the store location.

      • Select only the state (or province) in which your stop is located. 

      • In the Select origin address box, select the store location from the drop-down that you would like used as the origin address.

       

      Please note that an origin address MUST be selected to enable origin-based sales tax collection. If an origin address is not selected then tax will only be charged for orders shipped to your home state.

      Additional Resources