How to Charge the Right Sales Tax at Checkout
Getting checkout right protects your margin and your customers. Here is how.
For most remote sales, charge the combined rate at the customer's shipping address, which means calculating the rate per order rather than applying a fixed number. Use an address level lookup, be ready to show how the tax breaks down, and record what you charged on every order for filing.
The rate depends on the address
For most remote sales, the correct rate is the combined rate at the customer's shipping address. That means checkout needs to determine the rate per order, not apply a fixed number. Related: What Economic Nexus Means and Why It Matters
Keep reading: US Sales Tax Basics for Online Sellers, What Economic Nexus Means and Why It Matters, Origin vs Destination Based Sales Tax, Explained. See how SalesTaxly helps you us sales tax rates and lookup for online stores.
Use an address level lookup
An address based rate lookup returns the exact combined rate for where the order ships. Building this into checkout is the reliable way to charge correctly across thousands of jurisdictions. Related: Why does the sales tax rate differ between two addresses in the same city?
Show the breakdown
Displaying how the tax is composed, or at least being able to explain it, builds customer confidence and helps you stand behind the number if it is ever questioned.
Keep clean records
Whatever you charge, record it clearly per order. Good records make filing straightforward and protect you if you ever need to reconcile what you collected with what you owe.
- The correct rate depends on the ship to address
- Use an address level lookup, not a flat rate
- Be able to show how the tax is composed
- Keep clean per order records for filing
Julien Jimenez
Julien Jimenez is an independent software builder based in Paris. He designs, ships, and operates focused SaaS products for small businesses and independent professionals. Read the full author page.
Frequently asked questions
Why not just apply one tax rate to every checkout?
Because for remote sales the correct amount is the combined rate at each shipping address, a single rate mischarges many orders. Checkout needs to determine the rate per order instead.
Why keep a per order record of the tax charged?
Clean per order records make filing straightforward and let you reconcile what you collected against what you owe. They also let you stand behind a number if a customer or state ever questions it.
Charge the right US sales tax, every time
US sales tax rates and lookup for online stores. SalesTaxly is built to help you put this into practice.
Look up a rateMore from the SalesTaxly blog
US Sales Tax Basics for Online Sellers
What Economic Nexus Means and Why It Matters
Origin vs Destination Based Sales Tax, Explained
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