In June 2018, in a landmark decision, the U.S. Supreme Court overturned an earlier precedent, ruling that states can collect sales taxes from online retailers. As a result, we are legally required to charge sales tax in states where we have met or exceeded a threshold set by the state; have a physical presence (called a "nexus"); or operate in states where certain business activities (such as personnel, inventory, affiliate, drop-shipping relationship, etc.) also create a sales tax nexus. Once a nexus is reached within a jurisdiction, sales tax is legally required to be collected.

Sales tax is complex. With economic nexus determination and street-address accurate calculations, TaxJar ensures that we collect the right rate on every product in over 14,000 taxing jurisdictions. More than 20,000 businesses, from Microsoft to Coca-Cola, rely on TaxJar to calculate sales tax in real time. We do not calculate the applicable sales tax jurisdictions or rates ourselves.

When it comes to destination-based eCommerce transactions, the location where any customer takes possession of a product is considered the point of sale. As a result, taxes are calculated based on the shipping address, not on the billing address. You can read this TaxJar blog article for more information.

Your Combined Sales Tax Rate is simply the sum of all applicable taxes. You can look up the Combined Sales Tax Rate of your shipping address using TaxJar's online sales tax calculator.