National Sales Tax Database Overview

The National Sales Tax Database is a companion product that contains geocodes for every state, county, and local tax rate in the entire United States. The system uses this database to calculate tax on your sales.

The term geocode means geographically coded information. For our purposes, the geocode represents a tax jurisdiction that imposes taxes on the goods and services you sell. Each 10-character geocode identifies a state, county, local county area, city, and local city area. The first two numbers in a geocode identify the state, the next three numbers identify the county or local county area, and the final five numbers identify the city or city local area.

Your customers' zip codes determine their standard tax rate. The national sales tax database manages tax rates by assigning tax jurisdictions to the zip code areas where you do business. Tax jurisdictions can include tax rates from multiple entities such as state, county, and city. When customers and products are taxed outside the normal rates, the system provides tax exception groups to manage this.

Implement the National Sales Tax Database as follows:

The following topics explain how to implement the following:

• Identify the states for which you will be charging and paying tax.

• Identify the states for which you will be charging tax on freight and handling.

• Create new geocodes, as needed, for any reduced tax rates that apply to the products or customers with which you do business.

Click here for a printable version of the National Sales Tax Database documentation.