diff --git a/src/main/java/com/commercetools/sync/taxcategories/utils/TaxRatesUpdateActionUtils.java b/src/main/java/com/commercetools/sync/taxcategories/utils/TaxRatesUpdateActionUtils.java
index 49d0f815f2..901b51d9f6 100644
--- a/src/main/java/com/commercetools/sync/taxcategories/utils/TaxRatesUpdateActionUtils.java
+++ b/src/main/java/com/commercetools/sync/taxcategories/utils/TaxRatesUpdateActionUtils.java
@@ -111,14 +111,10 @@ private static List<UpdateAction<TaxCategory>> buildRemoveOrReplaceTaxRateUpdate
             oldTaxRate ->
                 newTaxRatesDrafts.stream()
                     .filter(
-                        taxRateDraft ->
-                            Objects.equals(oldTaxRate.getCountry(), taxRateDraft.getCountry()))
-                    .filter(
-                        taxRateDraft ->
-                            oldTaxRate.getState() == null
-                                || (oldTaxRate.getState() != null
-                                    && taxRateDraft.getState() == null)
-                                || Objects.equals(oldTaxRate.getState(), taxRateDraft.getState()))
+                        newTaxRateDraft ->
+                            Objects.equals(oldTaxRate.getCountry(), newTaxRateDraft.getCountry())
+                                && Objects.equals(
+                                    oldTaxRate.getState(), newTaxRateDraft.getState()))
                     .findFirst()
                     .map(
                         matchedTaxRateDraft -> {
diff --git a/src/test/java/com/commercetools/sync/taxcategories/utils/TaxCategoryUpdateActionUtilsTest.java b/src/test/java/com/commercetools/sync/taxcategories/utils/TaxCategoryUpdateActionUtilsTest.java
index f6c00df233..304a26b732 100644
--- a/src/test/java/com/commercetools/sync/taxcategories/utils/TaxCategoryUpdateActionUtilsTest.java
+++ b/src/test/java/com/commercetools/sync/taxcategories/utils/TaxCategoryUpdateActionUtilsTest.java
@@ -289,17 +289,7 @@ void buildTaxRatesUpdateActions_WithMoreSubRates_ShouldReturnOnlyReplaceAction()
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn("state");
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
-
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
-
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate("state");
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.06);
@@ -330,17 +320,7 @@ void buildTaxRatesUpdateActions_WithSameTaxRateAndSubRates_ShouldNotBuildAnyActi
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn("state");
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
-
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
-
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate("state");
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.11);
@@ -370,17 +350,7 @@ void buildTaxRatesUpdateActions_WithNullOldState_ShouldReturnOnlyReplaceAction()
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn(null);
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
-
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
-
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate(null);
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.06);
@@ -400,28 +370,19 @@ void buildTaxRatesUpdateActions_WithNullOldState_ShouldReturnOnlyReplaceAction()
     final List<UpdateAction<TaxCategory>> result =
         buildTaxRateUpdateActions(taxCategory, taxCategoryDraft);
 
-    assertThat(result).isEqualTo(singletonList(ReplaceTaxRate.of("taxRate-1", taxRateDraft)));
+    assertThat(result)
+        .isEqualTo(asList(RemoveTaxRate.of("taxRate-1"), AddTaxRate.of(taxRateDraft)));
   }
 
   @Test
-  void buildTaxRatesUpdateActions_WithRemovedState_ShouldReturnOnlyReplaceAction() {
+  void buildTaxRatesUpdateActions_WithRemovedState_ShouldReturnRemoveAndAddActions() {
 
     TaxCategory taxCategory = mock(TaxCategory.class);
     when(taxCategory.getKey()).thenReturn("tax-category-key");
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn("state");
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
-
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
-
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate("state");
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.06);
@@ -441,28 +402,45 @@ void buildTaxRatesUpdateActions_WithRemovedState_ShouldReturnOnlyReplaceAction()
     final List<UpdateAction<TaxCategory>> result =
         buildTaxRateUpdateActions(taxCategory, taxCategoryDraft);
 
-    assertThat(result).isEqualTo(singletonList(ReplaceTaxRate.of("taxRate-1", taxRateDraft)));
+    assertThat(result)
+        .isEqualTo(asList(RemoveTaxRate.of("taxRate-1"), AddTaxRate.of(taxRateDraft)));
   }
 
   @Test
-  void buildTaxRatesUpdateActions_WithRemovedCountryCode_ShouldReturnOnlyRemoveAction() {
+  void WhenTaxRatesWithAndWithoutState_WithRemovedTaxRate_ShouldBuildAndReturnRemoveAction() {
 
     TaxCategory taxCategory = mock(TaxCategory.class);
     when(taxCategory.getKey()).thenReturn("tax-category-key");
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn("state");
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
+    final TaxRate taxRate1 = buildTaxRate("state");
+    final TaxRate taxRate2 = buildTaxRate(null);
+    when(taxCategory.getTaxRates()).thenReturn(asList(taxRate1, taxRate2));
+
+    TaxRateDraft taxRateDraft = TaxRateDraftBuilder.of(taxRate2).build();
+
+    // TaxCategoryDraft with only one taxRate
+    TaxCategoryDraft taxCategoryDraft =
+        TaxCategoryDraftBuilder.of("name", singletonList(taxRateDraft), "desc")
+            .key("tax-category-key")
+            .build();
+
+    final List<UpdateAction<TaxCategory>> result =
+        buildTaxRateUpdateActions(taxCategory, taxCategoryDraft);
+
+    assertThat(result).isEqualTo(asList(RemoveTaxRate.of("taxRate-1")));
+  }
+
+  @Test
+  void buildTaxRatesUpdateActions_WithRemovedCountryCode_ShouldReturnOnlyRemoveAction() {
 
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
+    TaxCategory taxCategory = mock(TaxCategory.class);
+    when(taxCategory.getKey()).thenReturn("tax-category-key");
+    when(taxCategory.getName()).thenReturn("name");
+    when(taxCategory.getDescription()).thenReturn("desc");
 
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate("state");
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.06);
@@ -493,17 +471,7 @@ void buildTaxRatesUpdateActions_WithDuplicatedTaxRateDrafts_ShouldReturnOnlyFirs
     when(taxCategory.getName()).thenReturn("name");
     when(taxCategory.getDescription()).thenReturn("desc");
 
-    final TaxRate taxRate1 = mock(TaxRate.class);
-    when(taxRate1.getName()).thenReturn("11% US");
-    when(taxRate1.getState()).thenReturn("state");
-    when(taxRate1.getId()).thenReturn("taxRate-1");
-    when(taxRate1.getAmount()).thenReturn(0.11);
-    when(taxRate1.getCountry()).thenReturn(CountryCode.US);
-    when(taxRate1.isIncludedInPrice()).thenReturn(false);
-
-    final SubRate oldSubRate1 = SubRate.of("subRate-1", 0.11);
-
-    when(taxRate1.getSubRates()).thenReturn(singletonList(oldSubRate1));
+    final TaxRate taxRate1 = buildTaxRate("state");
     when(taxCategory.getTaxRates()).thenReturn(singletonList(taxRate1));
 
     final SubRate subRate1 = SubRate.of("subRate-1", 0.06);
@@ -589,4 +557,19 @@ void buildTaxRatesUpdateActions_WithDuplicatedTaxRateDrafts_ShouldReturnOnlyFirs
     assertThat(result)
         .isEqualTo(asList(RemoveTaxRate.of("taxRate-4"), AddTaxRate.of(newTaxRateDraft)));
   }
+
+  private TaxRate buildTaxRate(String state) {
+    final TaxRate taxRate = mock(TaxRate.class);
+    when(taxRate.getName()).thenReturn("11% US");
+    when(taxRate.getState()).thenReturn(state);
+    when(taxRate.getId()).thenReturn("taxRate-1");
+    when(taxRate.getAmount()).thenReturn(0.11);
+    when(taxRate.getCountry()).thenReturn(CountryCode.US);
+    when(taxRate.isIncludedInPrice()).thenReturn(false);
+
+    final SubRate oldSubRate = SubRate.of("subRate-1", 0.11);
+
+    when(taxRate.getSubRates()).thenReturn(singletonList(oldSubRate));
+    return taxRate;
+  }
 }