Do Freelancers Charge Sales Tax? Sales Tax on Services by State (2026)

A handful of states tax nearly everything. Hawaii and Washington each reached 167 of the 176 services surveyed, though in Washington most of that came from a tax on the business, not sales tax added to your invoice.

This chart covers licensed professional work such as legal and accounting services. Outside these 7 states, the professional services in the survey were not taxed at all, and Texas taxed only land surveying.

Utilities, admissions and repair work are taxed widely. Business, personal and professional services, where most freelancers sit, are taxed by far fewer states.

Most states land in the middle groups. Washington and Maryland sit in their own group because their 2025 changes pulled in IT, web and software work.

California's 7.25% includes a required statewide local add-on. A high rate only matters to you if your service is taxable there in the first place.

These averages include local taxes. Louisiana leads at 10.13%. Washington's 9.57% average now applies to IT and web services sold there, so web and IT freelancers now add it to invoices that carried no sales tax before October 2025.

Services in the FTA survey by category, and how many states tax most of them (January 1, 2017)

Source: Federation of Tax Administrators, State Taxation of Services by Category, 2017. Download as image

Washington services subject to retail sales tax since Oct. 1, 2025 (ESSB 5814); all but advertising are set to become exempt Jan. 1, 2029 under SB 6346

Source: Washington Department of Revenue, Services newly subject to retail sales tax; EY Tax News, Washington enacts sales and use tax and business and occupation tax changes and clarifications, including future tax relief; Washington State Legislature, SB 6346 bill summary (Chapter 238, 2026 Laws; Governor signed March 30, 2026). Download as image

How broadly the state taxes services by state

• 4Taxes most services
• 2Expanded to IT, web or software services in 2025
• 10Taxes many services (75 to 99 of 176)
• 21Taxes some services (30 to 74 of 176)
• 9Taxes few services (under 30 of 176)
• 5No statewide sales tax

Do freelancers have to charge sales tax?

In most states, no. The tax applies to services only when the state names them, and the lists rarely include writing, consulting, coaching or design. In the FTA survey, professional services were the least taxed group of all, with only 5 states taxing more than half of them.

There are clear exceptions. Hawaii and New Mexico tax almost every service through gross receipts or excise taxes. South Dakota taxes services unless they are exempt, at a 4.2% state rate. West Virginia presumes every sale of goods and services is taxable unless an exemption clearly applies. If you work from one of those states, assume your work is taxable until you confirm otherwise.

Who pays also matters. In Hawaii, New Mexico, Delaware and much of Washington's older system, the tax falls on the business itself. You may not see a line for it on the invoice, but it comes out of your revenue unless your rate or contract passes it on.

Which states tax IT, web design and software services?

This is where the rules moved most recently. Washington began charging retail sales tax on Oct. 1, 2025 for seven service groups, including IT consulting, custom website development, advertising design and custom software. New exclusions took effect July 1, 2026. A 2026 law repeals the tax on all of those groups except advertising, effective Jan. 1, 2029, but that relief is void if a court strikes down the state's new income tax. For now, all seven stay taxable.

Maryland added a 3% tax on data, IT, computer systems design and software publishing services in July 2025. Texas taxes data processing and information services, but 20% of the charge is exempt and the rest is taxed at the 6.25% state rate plus local tax. Connecticut taxes computer and data processing services at 1% instead of its 6.35% general rate.

If you build sites, write code, run ads or do IT support, check these states first. A Seattle client paying a remote developer can still trigger a question about where the service is received, so do not assume you are clear just because you live elsewhere.

How do I find out if my service is taxable in my state?

• Start with your state's group on the map. If it is in "Taxes few services", you are probably fine, but still check.
• Search your state revenue department site for "taxable services" and find your service by name. Texas, for example, publishes an enumerated list of 16 categories.
• Look at where the client uses the work, not just where you sit. Some states tax services based on where they are received.
• Check whether your state taxes the business on gross receipts instead of the buyer. That changes how you price, not whether you owe.
• Separate taxable and non-taxable work on your invoices. Bundling a taxable service with an exempt one can make the whole charge taxable in some states.
• If the answer is still unclear, ask the state for written guidance or talk to a tax professional before you start collecting.

What happens if you should have charged sales tax and didn't?

The state still wants the money, and it usually comes to you first, not your client. Sales tax is a debt the seller owes once the sale is taxable. If you never added it to the invoice, you usually pay it out of your own pocket, plus interest and possible penalties, for every period you missed.

That is why the contract matters. If your agreement says your rate is "inclusive of all taxes," you have agreed to absorb the tax. If it says the client pays any sales, use or similar taxes on top of the fee, you have room to bill them later, though collecting an old charge from a client is never easy.

Take a web designer in Washington who quoted a client a flat fee in late 2025 without mentioning tax. With the combined rate averaging 9.57%, that tax comes straight out of the margin unless the contract says otherwise.

How should you price and invoice a taxable service?

Once you know a service is taxable, register with the state before you collect a cent. Collecting tax without a permit causes its own problems, and most states want you registered before your first taxable sale.

Then quote your fee before tax and show the tax as its own line. Clients, especially businesses, expect to see it split out, and it keeps your rate from looking like it went up. If you bill some work that is taxable and some that is not, list them on separate lines with separate prices.

Keep the tax money apart from your income. A simple habit is moving it to a separate account the day a payment lands, so the filing never catches you short. Set a reminder for your state's filing schedule, which can be monthly, quarterly or yearly depending on how much you collect.

Sales tax, gross receipts tax and income tax are not the same thing

A lot of confusion comes from mixing these up. Sales tax is charged to the customer and passed through you to the state. A gross receipts tax, like Delaware's or Washington's B&O tax, is charged on your revenue even if you never bill it. Income tax is on your profit after expenses.

Delaware has no sales tax, yet the survey counted 152 services taxed there because of its gross receipts tax. Oregon, Montana and New Hampshire have no statewide sales tax. Alaska has none at the state level but lets local governments charge one, averaging 1.82%. Across the country, the population-weighted average combined rate is 7.53%, which gives you a sense of what a taxable invoice can carry.

Sources and method

Every number on this page comes from the sources below, each opened and read on or before October 18, 2026. A second, independent review checked every figure against its source and corrected anything that did not match. 51 of 51 state entries were confirmed; any that could not be are marked "Not yet confirmed" and left out of every count and chart.

1. Tax Foundation, State and Local Sales Tax Rates, Midyear 2026 (July 6, 2026 (rates as of July 1, 2026))
2. Federation of Tax Administrators, State Taxation of Services by Category, 2017 (2017 update (services taxed as of January 1, 2017; survey data updated January 2018))
3. Federation of Tax Administrators, FTA Survey of Services Taxation - Update (By The Numbers) (July-August 2017)
4. Washington Department of Revenue, Services newly subject to retail sales tax (Current page, read October 2026)
5. Comptroller of Maryland, Technical Bulletin No. 56: Sales and Use Tax on Data or Information Technology Services and Software Publishing Services (Revised June 30, 2025)
6. Texas Comptroller of Public Accounts, Taxable Services (Publication 96-259) (Current page, read October 2026)
7. South Dakota Department of Revenue, Sales and Use Tax Guide (July 2026)
8. Connecticut Department of Revenue Services, Sales and Use Tax Information (Last reviewed September 25, 2026)
9. New Mexico Taxation and Revenue Department, Gross Receipts Overview (Current page, read October 2026)
10. West Virginia Tax Division, Sales and Use Tax (Current page, read October 2026)
11. EY Tax News, Washington enacts sales and use tax and business and occupation tax changes and clarifications, including future tax relief (2026 (Tax News 2026-0853), read October 2026)
12. Washington State Legislature, SB 6346 bill summary (Chapter 238, 2026 Laws; Governor signed March 30, 2026) (Read October 2026)