2025 State Sales Tax Guide
2025-08-22
2025 State Sales Tax Guide
Sales tax rules vary by state. With 51 different sets of sales tax laws across the U.S., compliance is one of the biggest headaches for e-commerce sellers, SaaS companies, and small businesses.
This 2025 guide covers state sales tax rates, economic nexus thresholds, filing deadlines, and penalties.
For businesses that don’t want to juggle 51 jurisdictions, Afternoon.co can track thresholds, register your business, and file sales tax in every state automatically.
Last updated: August 2025
Who Should Use This Guide?
- Small business owners and online retailers
- SaaS founders and digital product companies
- E-commerce sellers on Shopify, Amazon, Etsy, WooCommerce, etc.
If you’re selling across state lines, sales tax compliance is unavoidable. This guide helps you understand where to start.
What Is Sales Tax?
Sales tax is a consumption tax imposed on goods and services, collected by the seller and remitted to state and local governments.
- 45 states + D.C. impose a statewide sales tax
- Local jurisdictions (cities, counties, transit districts) may add extra rates
- Not all items are taxable; for example, many states exempt groceries or prescription medicine
Afternoon.co insight: Exemptions vary widely by state (e.g., SaaS is taxable in Washington but exempt in California). Our platform keeps you updated so you don’t over- or under-collect.
Economic Nexus Thresholds (2025)
The South Dakota v. Wayfair (2018) decision gave states the power to require remote sellers to collect sales tax.
- Most states: $100,000 in sales or 200 transactions annually
- Some states only use a sales-dollar threshold (no transaction count)
- Applies to remote sellers, SaaS companies, and e-commerce stores
Not sure when you’ll cross a threshold? Afternoon.co monitors your sales across all states, so you can always register on time.
Filing, Deadlines & Penalties
- States assign filing frequencies: monthly, quarterly, or annually
- Most returns are due between the 20th–25th of the following month
- Penalties: Late filing can trigger penalties of up to 30%, plus daily interest
With Afternoon.co, you can automate recurring filings so you never risk penalties or interest.
State Sales Tax Directory (2025)
Use this directory to find your state’s basic rate structure and official tax authority.
*Averages based on Tax Foundation data.
†States with no state-level sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon) may still allow local taxes.
Note: Local rates vary widely within each state. Always verify exact rates with the official state tax agency or the state’s address-based lookup tool.
FAQs: U.S. Sales Tax
Does the U.S. have a federal sales tax?
No. Sales tax is governed by states and local jurisdictions, not the federal government.
What is economic nexus?
Economic nexus means you must collect sales tax if your sales into a state exceed its threshold, even without a physical presence.
Do states tax SaaS and digital products?
Yes, many do. Rules vary — e.g., Washington taxes SaaS, while California generally exempts it. Afternoon.co keeps track of these differences for you.
Which states don’t have sales tax?
Alaska, Delaware, Montana, New Hampshire, and Oregon. (Note: some still allow local-level taxes.)
How do I register for sales tax?
Every state has their own online registration portal. Or let Afternoon.co help you register.
What happens if I don’t collect sales tax?
States can assess penalties of up to 30%, plus interest, and hold you liable for uncollected tax.
Learn more about Afternoon
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