- Sales tax can be charged based on customer location or purchase location
- Most states follow destination-based sourcing rules for sales tax
- Destination-based sourcing means applying sales tax rules and rates based on the customer’s location
- Some states are considered origin-based and apply sales tax based on the business location
- There are variations in destination-based sales tax rules, such as exemptions for certain types of software in Texas
- Major origin-based states include Texas, Pennsylvania, Ohio, Virginia, and California
- California is a hybrid-origin state that applies taxes based on both the origin and destination of a transaction
- To determine which sourcing rules to follow, check if your home state and where you ship from are destination or origin-based
Source: taxconnex.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
