Overview of US Sales Tax Supported in Kintsugi

This article gives you a high-level overview of how Kintsugi handles US sales tax compliance. Whether you are onboarding for the first time or expanding into new states, this is a good starting point.

What Is US Sales Tax?

Sales tax is a consumption tax collected by businesses on behalf of state and local governments when a taxable product or service is sold. Unlike a federal tax, US sales tax is administered entirely at the state level, which means the rules, rates, and requirements vary significantly from state to state.

For businesses selling across multiple states, this creates a complex web of compliance obligations. Kintsugi is built to handle that complexity for you.

How Kintsugi Supports US Sales Tax

The US is a fully supported jurisdiction in Kintsugi. This means Kintsugi covers the complete compliance lifecycle, including the following:

• Tax Engine: Real-time tax calculations across all 50 states, plus Washington DC and US territories

• Nexus Monitoring: Automatic tracking of where you have or are approaching a tax obligation

• New Registrations: Kintsugi handles filing for new sales tax permits on your behalf

• Import Registrations: Existing registrations from other platforms or manual accounts can be imported

• Filings: Automated, on-time filing and remittance to state tax authorities

All product categories and all supported read-only and tax-engine integrations are available for US compliance. No partner is required for filings or registrations.

The Key Steps in US Sales Tax Compliance

Managing sales tax in the US involves a series of connected steps. Here is how Kintsugi fits into each one:

1. Track nexus exposure across all states where you do business

2. Register for a sales tax permit in states where you have nexus

3. Collect the correct tax amount at checkout based on product type and location

4. File returns and remit collected tax to each applicable state tax authority

5. Manage exemption certificates for tax-exempt customers such as resellers and nonprofits

6. Use Voluntary Disclosure Agreements (VDAs) to resolve past non-compliance when needed

Why US Sales Tax Is Complex

There are over 12,000 taxing jurisdictions in the US, each potentially carrying different rates and rules. The primary sources of complexity include the following:

• State-by-state rate differences: Combined state and local rates can range from 0% (in states like Oregon) to over 10% in some localities

• Product taxability: What is taxable in one state may be fully exempt in another (clothing, SaaS, groceries, and dietary supplements are common examples)

• Nexus triggers: Both physical presence and economic activity (sales volume or transaction count) can create a tax obligation in a state

• Filing frequency: Some states require monthly filing, others quarterly or annually, depending on your sales volume

A Note on States Without Sales Tax

Five states have no state-level sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local jurisdictions to administer their own sales taxes, so local obligations may still apply in certain Alaskan cities.

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