US sales tax invoicing: what small businesses need to get right

Unlike GST or VAT countries, the US has no federal sales tax and no single national invoice format. Sales tax is set state by state, and often layered with county and city rates on top — so what a compliant invoice needs to show depends entirely on where the sale is taxed.

Nexus decides whether you charge tax at all

Before worrying about invoice fields, you need to know where you're required to collect sales tax in the first place. That's called nexus — the legal connection between your business and a state.

• Physical nexus: an office, warehouse, employee, or inventory physically located in a state.
• Economic nexus: since the 2018 South Dakota v. Wayfair ruling, a state can require you to collect tax based on sales volume alone — no physical presence needed.
• Most states set the economic nexus threshold at $100,000 in sales, though some use higher figures or add a transaction-count test (a trend several states are dropping — Illinois repealed its 200-transaction rule from January 1, 2026).

Without nexus in a state, you generally can't be forced to collect its sales tax. With it, you need to register, collect, file, and remit — even for a handful of sales a year.

Marketplace sellers get a partial pass

If you sell exclusively through a platform like Amazon, Etsy, or eBay, marketplace facilitator laws generally make the platform responsible for collecting and remitting tax on those sales, in every state with a sales tax. That doesn't fully exempt you — you may still need to register and file zero returns, and you stay responsible for any sales made off-platform.

What actually needs to be on the invoice

There's no federally mandated invoice layout, but for audit protection and clean books, a US sales invoice should show:

• Business name and address
• Invoice date and a unique invoice number
• An itemized description of what was sold
• The sales tax rate applied and the jurisdiction it applies to
• The sales tax amount shown as its own line, separate from the price
• The total amount due

Because taxability and rates can differ by item and by jurisdiction — some states tax software differently from physical goods, for instance — a flat single tax rate on every invoice is rarely accurate once you sell into more than one state. StashBill's compliance engine is built to apply the right tax fields and rate logic automatically, item by item and jurisdiction by jurisdiction, instead of one flat rate on every invoice. See how it handles tax rules in other countries.

This is general information, not tax advice — sales tax rules vary by state and change often. Check with an accountant or a sales tax automation tool before registering in a new state.