US invoice requirements and sales tax basics
There is no single federal invoice format in the US, but a clear invoice shows your business name and contact details, the client’s details, an invoice number and date, what you did, the amounts, any sales tax, the total, the due date and how to pay. Sales tax is set by states and local governments, not the IRS, so whether you charge it depends on where and what you sell.
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What should a US invoice include?
- Include
- Your business name, address, email or phone
- Why
- So the client knows who to pay and who to ask
- Include
- Client name and billing address
- Why
- Matches their records and purchase order
- Include
- Unique invoice number and invoice date
- Why
- Easy to track, and part of your records
- Include
- Description, quantity, rate and amount for each line
- Why
- Shows exactly what is being charged
- Include
- Sales tax as its own line, if you collect it
- Why
- Shows the tax you collected for the state
- Include
- Total due, due date and payment terms (for example Net 30)
- Why
- Sets clear expectations
- Include
- How to pay (bank transfer, check, card link)
- Why
- Removes the easiest excuse for paying late
| Include | Why |
|---|---|
| Your business name, address, email or phone | So the client knows who to pay and who to ask |
| Client name and billing address | Matches their records and purchase order |
| Unique invoice number and invoice date | Easy to track, and part of your records |
| Description, quantity, rate and amount for each line | Shows exactly what is being charged |
| Sales tax as its own line, if you collect it | Shows the tax you collected for the state |
| Total due, due date and payment terms (for example Net 30) | Sets clear expectations |
| How to pay (bank transfer, check, card link) | Removes the easiest excuse for paying late |
What do payment terms like Net 30 mean?
- Term on the invoice
- Due on receipt
- What it means
- Pay as soon as the invoice arrives
- Term on the invoice
- Net 15
- What it means
- Pay the full amount within 15 days of the invoice date
- Term on the invoice
- Net 30
- What it means
- Pay the full amount within 30 days of the invoice date
- Term on the invoice
- 2/10 Net 30
- What it means
- Take 2% off if you pay within 10 days; otherwise the full amount is due in 30
| Term on the invoice | What it means |
|---|---|
| Due on receipt | Pay as soon as the invoice arrives |
| Net 15 | Pay the full amount within 15 days of the invoice date |
| Net 30 | Pay the full amount within 30 days of the invoice date |
| 2/10 Net 30 | Take 2% off if you pay within 10 days; otherwise the full amount is due in 30 |
Write the actual due date next to the term (for example "Net 30, due December 12, 2026") so nobody has to count days.
See also: How to chase an unpaid invoice politely · Payment reminder email templates
How does sales tax work on invoices?
- Sales tax is set by each state, and often by cities and counties too. There is no federal sales tax.
- Some states have no statewide sales tax, and many states tax few or no services. Rules differ, so check your state’s department of revenue.
- You generally collect sales tax only where you have a connection (nexus) with the state. Since South Dakota v. Wayfair (2018), states can require out-of-state sellers to collect once their sales into the state pass a threshold.
- Register with the state before you collect sales tax, then file and pay what you collected on its schedule.
Rates, thresholds and what is taxable differ in every state and change often, so this page gives no rates. Your state department of revenue is the authority.
Which records and tax forms matter?
- The IRS lists invoices among the supporting documents that show your gross receipts. Keep a copy of every invoice you send.
- Business clients may ask you for a Form W-9. They generally report payments for services of $2,000 or more made in 2026 on Form 1099-NEC (it was $600 before 2026). Some payments, such as card payments and most payments to corporations, are reported differently or not at all.
Questions
Do I have to charge sales tax on services?
It depends on your state and the service. Many states tax few or no services, while others tax a wide range, and some states have no statewide sales tax at all. Check your state department of revenue’s rules for your type of work, and register before you start collecting any sales tax.
Does the IRS require a specific invoice format?
No. The IRS does not prescribe an invoice layout, but it expects you to keep records that support your income, and invoices are one of those supporting documents. A numbered, dated invoice with clear amounts, plus proof of payment, makes your bookkeeping and any later questions much simpler.
How does PaidKind handle US sales tax?
PaidKind never suggests or looks up a sales tax rate. You say whether you charge sales tax and enter your own rate, and you can type a different rate on any invoice line. The tax appears in the invoice totals and PDF. If you do not charge sales tax, your invoices show no tax line.
Official sources
General information, not legal or tax advice. Rules change: check the official sources above, and speak to an accountant or solicitor about your own situation.