Origin vs destination sales tax

Sourcing is the rule that decides whose rate applies: the seller’s location or the buyer’s. Most states are destination-based. A handful still use origin rules for many in-state sales. This page stays high-level on purpose.

Destination sourcing

Destination sourcing taxes the sale where the buyer receives the goods (or first uses the service). A store in Austin shipping to Dallas uses Dallas-area rates if the state is destination-based. Remote sellers with nexus almost always collect at destination, even when they sit in an origin state.

Origin sourcing

Origin sourcing taxes many in-state sales at the seller’s business location. That is simpler for a single storefront: one rate for counter sales and in-state deliveries. It is also why two shops in the same metro can charge different tax on the same cart.

States commonly described as origin-based for in-state tangible goods include Arizona, Illinois, Mississippi, Missouri, Ohio (goods, not always services), Tennessee, Texas, Utah, and Virginia. California is a hybrid: state, city, and county pieces are often origin-based for in-state sellers, while district taxes follow the destination.

What changed recently

Illinois tightened destination rules for shipments that originate outside the state. Pennsylvania shifted toward destination sourcing in 2026. Treat older blog posts that still list Pennsylvania as origin as stale. Always read the current department-of-revenue bulletin.

Why StateTaxAdd does not pick a ZIP

Accurate sourcing needs a ship-from, a ship-to, a product taxability code, and often a marketplace-facilitator flag. That is Avalara-grade work and a paid tax API. This site shows a statewide base and an optional typical local so you can estimate — then verify.

Often origin or hybrid (in-state)

Arizona — In-state sales are generally origin-sourced. Remote sellers shipping into Arizona typically use destination sourcing.
California — Highest statewide base (includes a 1.25% mandatory local add-on collected by the state). District taxes are typically destination-sourced; city/county/state portions are often origin-sourced for in-state sellers.
Illinois — In-state retailers generally use origin sourcing. Remote sellers shipping from outside Illinois typically use destination sourcing. Home-rule locals can be high (for example Chicago).
Mississippi — High statewide rate. Locals are small. In-state sales are generally origin-sourced.
Missouri — Low state base, high locals. In-state sales are generally origin-sourced. Combined rates vary city by city.
Ohio — Tangible personal property sold in-state is often origin-sourced; services are typically destination-sourced. County and transit locals apply.
Tennessee — High state rate plus local. Second-highest typical combined. In-state sales are generally origin-sourced; remote sellers usually use destination.
Texas — State 6.25% plus local (city, transit, county, special purpose) generally capped so combined stays at or under 8.25%. In-state sales are typically origin-sourced.
Utah — Statewide figure includes a 1.25% mandatory local add-on. In-state sales are generally origin-sourced; remote sellers typically use destination.
Virginia — Statewide figure includes a 1% mandatory local add-on. Additional regional taxes apply in Northern Virginia and Hampton Roads. In-state sales are generally origin-sourced.

No general statewide sales tax

Alaska — local-only
Delaware — none
Montana — none
New Hampshire — none
Oregon — none

Everyone else in the table is treated as destination for this educational map. That is a teaching simplification.