thread Origin based sales tax in Payments Troubleshooting

Origin based sales tax

txwholesaleblan — Sat, 20 Sep 2025 14:19:58 GMT

Texas is an origin based sales tax state so I need to charge sales tax on EVERY order no matter where the item is being shipped to. However when an out of state customer enters their information the sales tax disappears. How do I charge sales tax on all of my orders?

Re: Origin based sales tax

gillym82 — Fri, 06 Sep 2019 05:14:03 GMT

I did some searching on this as I'm in WI and we are a destination state and I'm not sure there is a way to do this 😞

Re: Origin based sales tax

ashc — Fri, 06 Sep 2019 20:24:20 GMT

Hi @txwholesaleblan and @gillym82!

In origin-based states, if you make a sale to someone in your state, then you simply charge the sales tax rate at your location. But in destination-based states, the point of sale is considered to be the buyer’s location. In those cases, you need to figure out the sales tax rate at each buyer’s address and charge sales tax based on that rate. Complicated, right?

We have a whole lot more about origin and destination-based sales tax to help you figure out which sales tax rate to charge.

Re: Origin based sales tax

HeatherM — Fri, 06 Sep 2019 21:10:24 GMT

Sales taxes are never fun 😉

However, the general rule is if you sell and ship to someone out of state via the internet you do not charge sales tax.

There are thresholds in most other states as to whether or not you should collect their sales tax on your sales. I believe the current accepted threshold is somewhere around $100,000 in the state you ship to. In other words you have to ship $100,000 or more to any state in question to collect their tax. Otherwise small businesses would be unable to handle the accounting involved in collecting taxes for each state. I could be wrong, consult a tax accountant.

As @ashc said, if you sell to someone in your state (no matter if it's via the internet or not), the tax rate that applies depends on whether you're in an origin or destination state and you must follow the rules of your state for that.