Sales Tax Calculator based on US Zip Codes

Calculating sales tax on online sales requires that you first know the address of the customer who’s buying from you so you can determine if you need to calculate sales tax in their jurisdiction. If you have sales tax nexus in their state, the next step is to determine the combined sales tax rate for their zip code.

This can be done by looking it up on TaxCloud’s Sales Tax Calculator or using TaxCloud’s API integrated in your e-commerce store. It can also be done by looking up their state and local sales tax rates. Once you know their sales tax rate, you simply need to divide the sales tax percentage by 100 to get a decimal. Then, you multiply the retail price by the decimal to calculate the sales tax. If you have an ecommerce store, however, you’ll need to use an automated sales tax calculation solution like TaxCloud’s API.

The sales tax rate in your area will be a combination of both the state sales tax rate and any local or regional sales tax rates that are charged. If you’re unsure what the sales tax rate is in your area, you can use TaxCloud’s Sales Tax Calculator to find out. Powered by our API, it gives accurate sales tax info down to the zip code.

If you own an ecommerce store, you will need to calculate and charge sales tax on all sales in jurisdictions where you have economic nexus. There are two ways to achieve economic nexus in a state. The first is physical nexus, which means you might be located there or have an office there.

The second is economic nexus and states have different rules for how you achieve economic nexus in their state. This often involves making a certain volume of sales in the state in the last 12 months or calendar year. Some states calculate that in dollars of sales in the state, whereas others calculate it in numbers of transactions. Other states require that you achieve either a certain number of transactions or a certain threshold of sales and some require that you achieve both. For example, Georgia requires that you have $100,000 in sales or 200 transactions.

Sales tax is often calculated for online purchases using a sales tax API or sales tax software. Sales tax software can quickly provide you with accurate sales tax data down to the zip code. For example, TaxCloud’s API has sales tax information for over 13,000 sales tax jurisdictions in the U.S. and can calculate sales tax in real-time during checkout.

How often you should be filing sales tax returns for your business depends on a variety of factors. Each state has different requirements for how often you should be filing that are typically based on how much sales tax you collect every month in that state. Some businesses will only need to file sales tax returns annually or quarterly whereas others will need to do so every month. Unsure how often you should be filing? We can help! Sign-up for TaxCloud today!