Many of us use zip codes to determine the sales and use tax rates to apply to an invoice for tax calculation purposes.  However because some local jurisdictions can cross zip code boundaries, using just the 5 digit zip code may not be the most accurate method for sales tax rate determination purposes.

States with Economic Nexus Laws-1

Using the plus 4 along with the zip code will help eliminate the risk of charging a higher sales tax rate and overcharging customers.  It will also potentially decrease your cost of reporting by ensuring that you do not undercharge customers by charging too low of a rate. 

Anne Birkmann

Written by Anne Birkmann