Sales tax on books
Sales tax on books in the United States
The US has no national sales tax. Each state sets its own, and they disagree most about digital books. A reader in Pennsylvania pays tax on an ebook, a reader in California does not. You only have to collect in a state once you have a connection there, and since 2018 sales alone can be enough.
This is general information, not tax advice. Rates and rules change, and your own situation matters. Check with the tax authority or an accountant before you decide.
There is no single US rate
Sales tax is set state by state, and many cities and counties add their own on top. A few states have no general sales tax at all. Oregon is one.
That is why this page has no rates table. A list of every state's rate on ebooks, audiobooks and print would need a checked source for each row, and the rules change often. Stripe Tax keeps that table for you at checkout.
Ebooks and audiobooks depend on the state
Pennsylvania taxes ebooks and audiobooks at its 6% rate. Since August 1, 2016, sellers have had to collect tax on books, music and other products delivered or streamed digitally.
Washington taxes many digital products sold to the end user, audiobooks included, however the reader gets them, by download, stream or subscription.
California does not tax an ebook sent over the internet. A new California law makes many digital products taxable from January 1, 2027, but it leaves out digital books and digital audio works, so ebooks and audiobooks stay untaxed there.
Source: Pennsylvania Department of Revenue, digital products
Printed books are goods
A paperback or hardcover is a physical item, and states with a sales tax usually tax it like other goods. In California, if you sell an ebook together with a printed copy, the whole sale is usually taxable.
When you have to collect in a state (economic nexus)
In South Dakota v. Wayfair (2018), the Supreme Court let states require sellers based elsewhere to collect their sales tax, even with no office or stock there.
The test is usually your sales into that state. South Dakota, the state in the case, asks you to register once you sell more than $100,000 there in the current or previous calendar year. It dropped its 200-sales test on July 1, 2023. Some places still count orders too. Washington, DC, for example, applies more than $100,000 or more than 200 separate sales.
Under those amounts you usually do not have to collect in that state. The state where your business is based has its own rules, so check those first.
Source: South Dakota Department of Revenue, 2023 legislative updates
Marketplace facilitators
When a reader buys your book on a marketplace that runs the checkout for many sellers, state law often makes the marketplace collect and pay the sales tax instead of you. California calls this a marketplace facilitator and has made it the retailer for those sales since October 1, 2019.
On Lanternbee, readers buy from your own store and pay through your own Stripe account. You are the seller, so collecting sales tax where you need to is yours to do, with Stripe Tax working out the amount.
What Stripe Tax does for US sales
Stripe Tax has separate product tax codes for downloaded digital books, audiobooks and printed books, so each format is taxed the way each state treats it. It also tracks your Stripe sales against each state's registration threshold and tells you when you get close. It does not watch your home state, and it only sees sales that go through Stripe.
Who charges the sales tax when you sell on Lanternbee
You do. Each author connects their own Stripe account, so you are the seller and the money goes straight to you. At checkout, Stripe Tax works out the right rate for where the reader is and adds it to the order. It collects tax in the places where you have added a tax registration in Stripe, so you still register where you need to, file the returns and pay what you collected. Stripe on tax registrations.
Questions authors ask about the United States
Do I charge sales tax on ebooks in the US?
It depends on the reader's state, and only once you are registered there. Pennsylvania and Washington tax digital books and audiobooks. California does not tax ebooks, and its new digital products tax from January 2027 leaves ebooks and audiobooks out. Stripe Tax applies each state's rule at checkout.
When do I have to start collecting in another state?
Usually once your sales into that state pass its economic nexus threshold. In South Dakota that is more than $100,000 in the current or previous calendar year. Some places, like Washington, DC, also count the number of sales. The state where your business is based has its own rules.
Does Stripe Tax register me in states?
Stripe Tax tracks your Stripe sales against each state's threshold and warns you when you are close. It collects tax only in states where you have added a registration. You can register with the state yourself, or ask Stripe to register you in states other than your home state.
Are printed books taxed the same as ebooks?
Not always. A printed book is a physical good and is usually taxed in states with a sales tax. Ebooks and audiobooks are taxed in some states and not in others. If you sell an ebook with a printed copy in one order, California usually taxes the whole sale.