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States with Origin sourcing or Special sourcing rules

A list of special sourcing states and states that use origin sourcing.

Sourcing

Sourcing determines how tax should be applied to a transaction. Tax rules are applied based on the origin or destination address, depending on state laws. 

Watch our "What is Sourcing" video.

Origin Sourcing

Apply sales tax to products based on their point of origin (Ship From address) for intrastate transactions (transactions within the same state).

Example: Product shipped from Springfield to Chicago, both within the state of Illinois. Tax is based on the Springfield address because Illinois is an origin sourcing state.

States with origin sourcing:

  • Arizona
  • Illinois
  • Missouri
  • New Mexico
  • Ohio
  • Tennessee
  • Utah
  • Virginia

Note: For services, AvaTax typically applies tax based on the destination address.

Mixed Sourcing

The tax rate depends on the product, service, or unique jurisdiction rules. 

States with mixed sourcing:

  • California
    • Products in counties and local special jurisdictions are based on the origin
    • Products in cities and district special jurisdictions are based on the destination
    • Services are based on the destination
    • See How does California's sourcing work?
  • Texas
    • If local tax rates at the origin address are less than 2%, the destination address is used to apply additional tax up to the 2% limit
    • Some services are based on the destination
  • Ohio
  • Pennsylvania

Home Rule States

Self-administered local taxing authorities. See What are home rule states?

States:

States with differing sales and use rates

States with at least one jurisdiction where the sales and use rates are different. See our compliance video covering tax types.

States with differing rates:

  • Alaska
  • Alabama
  • Arizona
  • Colorado
  • Iowa
  • Illinois
  • Missouri
  • Mississippi
  • New Mexico
  • Oklahoma
  • South Dakota (only the city of Carthage)

 

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