VAT and Sales Tax in United States

Does the United States have a federal VAT or national sales tax?

No. The United States is the only major developed economy without a national consumption tax of any kind. There is no federal value-added tax (VAT), no federal goods and services tax (GST), and no federal retail sales tax. Multiple reform proposals have been introduced in Congress over the decades, but none has been enacted. All general consumption taxation in the US is administered entirely at the state and local level [1]. The federal government raises revenue primarily through individual income tax, payroll tax, and corporate income tax; state and local governments substitute sales tax as a principal revenue source.

Which states impose a sales tax, and what are the NOMAD states?

Forty-five states plus the District of Columbia impose a general sales tax. The five states that do not are known by the acronym NOMAD: New Hampshire, Oregon, Montana, Alaska, and Delaware [2]. Each carries important nuances:

• Alaska: No statewide sales tax, but roughly 100 of its 165 municipalities levy local sales tax, with rates reaching 7 percent or more in some jurisdictions. The Alaska Remote Seller Sales Tax Commission coordinates collection for participating local governments.
• Montana: No statewide sales tax, but a small number of resort communities -- including Whitefish and West Yellowstone -- impose a local-option sales tax capped at 3 percent under state law.
• New Hampshire, Oregon, Delaware: No general sales tax at the state or local level. New Hampshire does impose a meals and rooms tax (9 percent on prepared food, lodging, and motor vehicle rentals).

The table below shows 2026 state sales tax rates and average combined state-plus-local rates for selected states, based on Tax Foundation data published January 2026 and updated April 2026 [1]:

The national population-weighted average combined rate is 7.53 percent as of 2026 [1].

How does economic nexus work after South Dakota v. Wayfair?

Prior to 2018, the Supreme Court's physical-presence rule (Quill Corp. v. North Dakota, 1992) meant that a remote seller had to maintain a physical presence in a state -- an office, employee, warehouse, or inventory -- before the state could require it to collect sales tax. That changed with South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), decided June 21, 2018 [3]. The Court held that physical presence is not a constitutional requirement for sales-tax collection obligations and upheld South Dakota's economic-nexus statute.

Every state with a sales tax (all 45 plus DC) has since enacted an economic-nexus statute. Most follow the South Dakota model: a remote seller that exceeds $100,000 in sales into the state in the current or preceding calendar year must register, collect, and remit sales tax in that state [4]. Some states set higher thresholds: California, New York, and Texas use $500,000; others vary. A shrinking number of states also retain a secondary 200-transaction threshold alongside the dollar threshold -- a seller exceeds nexus under either prong. As of April 2026, at least 16 states have eliminated the transaction threshold entirely (including California, Illinois effective January 1, 2026, and Utah effective July 1, 2025), leaving the dollar amount as the sole test [5]. Connecticut currently retains both the $100,000 and 200-transaction dual test [4].

Once nexus is established, the seller must register with the state department of revenue, obtain a sales-tax permit, collect sales tax on taxable sales at the correct rate for the delivery address, file periodic returns, and remit collected funds. Physical-presence nexus also continues to apply: a seller with employees, offices, warehouses, or third-party fulfillment inventory in a state has nexus there regardless of dollar volume.

What are marketplace facilitator laws?

Marketplace facilitator laws emerged in the years immediately following Wayfair and are now enacted in all 45 sales-tax states plus DC [5]. A marketplace facilitator -- a platform that contracts with third-party sellers to list goods, processes the transaction, and handles payment -- is required to collect and remit sales tax on behalf of those sellers. Amazon, eBay, Etsy, Walmart Marketplace, and similar platforms qualify.

The practical effect for sellers using these platforms is that the platform handles collection and remittance on facilitated sales; the individual seller typically does not collect separately. For a seller operating both marketplace channels and a direct website or storefront, only the direct-channel sales count toward the seller's own nexus threshold and reporting obligation. Sellers should note that marketplace facilitation does not eliminate the need to register in states where the seller has physical-presence nexus or where direct-channel sales exceed economic-nexus thresholds. Drop-shipping arrangements -- where a retailer takes an order and a third-party supplier ships directly -- create layered nexus questions that vary by state and require separate analysis.

Resale certificates, exemption certificates, and use tax

Not all sales are taxable. A buyer that purchases goods for resale -- a retailer buying inventory from a wholesaler, for instance -- may provide the seller with a resale certificate to document the tax-exempt character of the transaction. The seller does not collect sales tax on the wholesale sale; the buyer collects from its own customers at the retail level. Resale certificates are state-specific: California, Florida, and several other states require a state-issued certificate and do not accept out-of-state certificates [6]. The Multistate Tax Commission's Uniform Sales and Use Tax Resale Certificate is accepted by 38 states for multi-state purchases. Certificate records should generally be retained for at least four years from the last transaction covered.

Use tax is the consumer-side complement to sales tax. When a buyer purchases a taxable item from an out-of-state seller that does not collect sales tax -- whether because the seller lacks nexus or because the purchase predated the seller's nexus threshold crossing -- the buyer owes use tax to their state of residence at the applicable sales-tax rate [6]. Most states include a use-tax line on the personal income tax return for self-reporting; voluntary individual compliance is low. Business use-tax obligations are more aggressively audited: state sales-and-use-tax audits commonly identify out-of-state purchases on which the business should have self-assessed and paid use tax.

The United States country overview covers the broader federal and state tax structure, including income tax, payroll tax, and entity-level taxes. For questions about nexus analysis, voluntary disclosure, or multi-state compliance, the right resource is a qualified sales-tax practitioner -- the TaxPros Rated US directory lists credentialed professionals by state.