Origin-Based Sales Tax

Is your business located in an origin-based state or destination-based state for charging sales tax?

We are not tax professionals, for any questions regarding taxes or tax rates, our answers cannot be construed as legal advice. Always consult a tax professional for how to properly collect sales tax for your business.


  • Charging the correct sales tax can be tricky. The starting point is determining if your business is located in a state that charges origin-based or destination-based tax.
  • For businesses located in an origin-based sales tax state, you should be charging everyone in your state the sales tax rate where your business is located. 
  • For businesses located in a destination-based tax state, the sales tax rate is based on where the item will be delivered.

Origin-Based States

Arizona California* Illinois Mississippi
Ohio Pennsylvania Tennessee Texas
Utah Virginia Missouri  

 * California is unique. It’s a modified origin state where state, county, and city taxes are based on the origin, but district taxes are based on the destination (the buyer).

Destination-Based States

Alabama Arkansas Colorado District of Columbia
Florida Georgia Hawaii Idaho
Indiana Iowa Kansas Kentucky
Louisiana Maine Michigan Minnesota
Nebraska Nevada New Jersey New Mexico
New York North Carolina North Dakota Oklahoma
Rhode Island South Carolina South Dakota Vermont
Washington Wisconsin Wyoming  

Configure Origin-Based Sale Tax

  • In Admin, navigate to Settings > Commerce > Sales Tax.
  • Enter (or confirm) your store locations with the appropriate sales tax for the store location.

  • Select only the state (or province) in which your stop is located. 

  • In the Select origin address box, select the store location from the drop-down that you would like used as the origin address.


Please note that an origin address MUST be selected to enable origin-based sales tax collection. If an origin address is not selected then tax will only be charged for orders shipped to your home state.

Additional Resources