United States Tax Code Lookup for Sales
If the Ship To state is not the same as the transaction nexus, we always apply the non-liable tax code. This is done to avoid inconsistencies between the taxes and the transaction nexus.
The SuiteTax Engine cannot differentiate between the consumer's use tax and seller's use tax rates. These use tax rates are usually identical, but if they are not, only the general use tax rates (for consumers) are supported.
Sales and purchases tax determination lookup logic is based on ZIP+4 accuracy:
-
Address contains ZIP+4 – the tax group is set according to valid ZIP+4.
-
Address contains ZIP (not ZIP+4), city and state – tax group is set according to valid ZIP. If more than one tax group exists for the given zip, the group with the widest range is used.
-
If no ZIP code is provided in the address used for the tax determination, the taxes are not calculated for this address.
If you leave the Location field empty or if the location record does not have an address, the tax engine will use the subsidiary Shipping Address as the Ship From address.
If your Ship From address (in location or subsidiary records) is a different state than your Shipping Address, then the engine will choose Use tax codes instead of Sales tax codes. This identifies if the sales happens within the same state or in different states.
States Always Applying Sales Tax
The following states always apply the sales tax, including on interstate sales. The sales tax rates are applied based on the Ship To address.
|
States |
States Codes |
Notes |
|---|---|---|
|
Alaska |
AL |
The sales and use tax rates are different. |
|
Arizona |
AZ |
The sales and use tax rates are different. |
|
Colorado |
CO |
The sales and use tax rates are different. |
|
Connecticut |
CT |
— |
|
District of Columbia |
DC |
— |
|
Florida |
FL |
— |
|
Georgia |
GA |
— |
|
Guam |
GU |
Guam has no use tax. It has the gross receipt tax that should be applied on sales to Guam (even from the other US states). |
|
Hawaii |
HI |
The 0.5% use tax is a separate tax that is imposed on the import of the goods that are meant to be resold in Hawaii. If the sale is directly to a customer, the tax does not apply. |
|
Iowa |
IA |
— |
|
Idaho |
ID |
— |
|
Illinois |
IL |
Since 1 January 2025, all the interstate sale should be charged with the sales tax. This applies to both in-state and out-of-state retailers). |
|
Indiana |
IN |
— |
|
Louisiana |
LA |
— |
|
Massachusetts |
MA |
— |
|
Maryland |
MD |
— |
|
Maine |
MA |
— |
|
Michigan |
MI |
— |
|
Minnesota |
MN |
— |
|
North Carolina |
NC |
— |
|
North Dakota |
ND |
— |
|
Nebraska |
NE |
— |
|
New Jersey |
NJ |
— |
|
New Mexico |
NM |
— |
|
New York |
NY |
— |
|
Pennsylvania |
PA |
— |
|
Puerto Rico |
PR |
In Puerto Rico, the tax is officially called "Sales and use tax (SUT)". |
|
Rhode Island |
RI |
— |
|
South Dakota |
SD |
— |
|
Tennessee |
TN |
— |
|
Texas |
TX |
— |
|
Vermont |
VT |
— |
|
Washington |
WA |
— |
|
Wisconsin |
WI |
— |
|
Wyoming |
WY |
— |
Multiple Shipping Routes US Tax Code Lookup
For the line level shipping address to be used in the nexus determination, you need to do the following:
-
enable the Multiple Shipping Routes feature
-
check the Enable Item Line Shipping box on your transaction.
If you enable the feature and then check the box, the US tax code lookup logic is followed on sales transactions.
If you check the Enable Item Line Shipping box on your sales transaction, you should not enter more than 400 item lines. Entering more than 400 item lines may negatively impact the feature performance or cause timeouts.
For more information about nexus determination logic, see Nexus Determination Lookup Logic in SuiteTax.
Shipping items are always taxable and follow the tax code lookup logic for sales.
Shipping items can only be exempt from sales tax in the following cases:
-
if the customer has a valid blanket exemption certificate in the ship to state
-
if the customer's default tax code or tax group are the not liable tax code or tax group for the transaction tax ID
-
if the transaction is treated as non-taxable.
For example, the transaction is related to export out of the US. Then, it is shipping to a state where a seller has no registration. Then, the transaction could also override the nexus to a state not corresponding to the ship to address.