diff --git a/src/lib/components/billing/updateStateModal.svelte b/src/lib/components/billing/updateStateModal.svelte
new file mode 100644
index 0000000000..603b09bf4b
--- /dev/null
+++ b/src/lib/components/billing/updateStateModal.svelte
@@ -0,0 +1,112 @@
+<script lang="ts">
+    import { Modal } from '$lib/components';
+    import { Button, InputSelect } from '$lib/elements/forms';
+    import { invalidate } from '$app/navigation';
+    import { Dependencies } from '$lib/constants';
+    import { addNotification } from '$lib/stores/notifications';
+    import { sdk } from '$lib/stores/sdk';
+    import type { PaymentMethodData } from '$lib/sdk/billing';
+    import { Submit, trackError, trackEvent } from '$lib/actions/analytics';
+    import { states } from './state';
+    import { Alert, Card, Layout, Typography } from '@appwrite.io/pink-svelte';
+    import { CreditCardBrandImage } from '../index.js';
+
+    let {
+        show = $bindable(false),
+        paymentMethod
+    }: {
+        show: boolean;
+        paymentMethod: PaymentMethodData;
+    } = $props();
+
+    let selectedState = $state('');
+    let isSubmitting = $state(false);
+    let error = $state<string | null>(null);
+
+    $effect(() => {
+        if (!show) {
+            selectedState = '';
+            error = null;
+        }
+    });
+
+    async function handleSubmit() {
+        if (!selectedState) {
+            error = 'Please select a state';
+            return;
+        }
+
+        isSubmitting = true;
+        error = null;
+
+        try {
+            await sdk.forConsole.billing.setPaymentMethod(
+                paymentMethod.$id,
+                paymentMethod.providerMethodId,
+                paymentMethod.name,
+                selectedState
+            );
+            trackEvent(Submit.PaymentMethodUpdate);
+            await invalidate(Dependencies.PAYMENT_METHODS);
+            addNotification({
+                type: 'success',
+                message: 'Payment method state has been updated'
+            });
+            show = false;
+        } catch (e) {
+            error = e.message;
+            trackError(e, Submit.PaymentMethodUpdate);
+        } finally {
+            isSubmitting = false;
+        }
+    }
+</script>
+
+<Modal
+    dismissible={false}
+    bind:error
+    onSubmit={handleSubmit}
+    bind:show
+    title="Update payment method state">
+    <svelte:fragment slot="description">
+        State information is required for US payment methods to apply correct taxes and meet U.S.
+        legal requirements.
+    </svelte:fragment>
+
+    <Layout.Stack direction="column" gap="m">
+        {#if paymentMethod}
+            <Card.Base variant="secondary" padding="s">
+                <Layout.Stack direction="row" alignItems="center" gap="s">
+                    <CreditCardBrandImage brand={paymentMethod.brand} />
+                    <span>ending in {paymentMethod.last4}</span>
+                </Layout.Stack>
+                <Typography.Text size="s">
+                    {paymentMethod.country}
+                </Typography.Text>
+            </Card.Base>
+        {/if}
+
+        <Alert.Inline status="info" title="State is required for US payment methods">
+            <Typography.Text size="s">
+                To complete the billing information, select your state so we can apply the correct
+                taxes and meet U.S. legal requirements.
+            </Typography.Text>
+        </Alert.Inline>
+
+        <InputSelect
+            bind:value={selectedState}
+            required
+            label="State"
+            placeholder="Select a state"
+            id="state-picker"
+            options={states.map((stateOption) => ({
+                label: stateOption.name,
+                value: stateOption.abbreviation,
+                id: stateOption.abbreviation.toLowerCase()
+            }))} />
+    </Layout.Stack>
+
+    <svelte:fragment slot="footer">
+        <Button submit disabled={!selectedState || isSubmitting}>Save</Button>
+    </svelte:fragment>
+</Modal>
diff --git a/src/lib/sdk/billing.ts b/src/lib/sdk/billing.ts
index 5ee5232633..048dbb3d12 100644
--- a/src/lib/sdk/billing.ts
+++ b/src/lib/sdk/billing.ts
@@ -22,6 +22,7 @@ export type PaymentMethodData = {
     name: string;
     mandateId?: string;
     lastError?: string;
+    state?: string;
 };
 
 export type PaymentList = {
diff --git a/src/routes/(console)/account/payments/paymentMethods.svelte b/src/routes/(console)/account/payments/paymentMethods.svelte
index 8e53a8d3da..9caea2e1f5 100644
--- a/src/routes/(console)/account/payments/paymentMethods.svelte
+++ b/src/routes/(console)/account/payments/paymentMethods.svelte
@@ -9,6 +9,7 @@
     import DeletePaymentModal from './deletePaymentModal.svelte';
     import { hasStripePublicKey, isCloud } from '$lib/system';
     import PaymentModal from '$lib/components/billing/paymentModal.svelte';
+    import UpdateStateModal from '$lib/components/billing/updateStateModal.svelte';
     import {
         IconDotsHorizontal,
         IconInfo,
@@ -33,6 +34,8 @@
     let selectedLinkedOrgs: Organization[] = [];
     let showDelete = false;
     let showEdit = false;
+    let showUpdateState = false;
+    let paymentMethodNeedingState: PaymentMethodData | null = null;
     let isLinked = false;
 
     $: orgList = $organizationList.teams as unknown as Organization[];
@@ -49,6 +52,27 @@
     );
     $: hasLinkedOrgs = filteredMethods.some((method) => linkedMethodIds.has(method.$id));
     $: hasPaymentError = filteredMethods.some((method) => method?.lastError || method?.expired);
+
+    // Check for US payment methods without state
+    $: {
+        if ($paymentMethods?.paymentMethods && !showUpdateState && !paymentMethodNeedingState) {
+            const usMethodWithoutState = $paymentMethods.paymentMethods.find(
+                (method: PaymentMethodData) =>
+                    method?.country?.toLowerCase() === 'us' &&
+                    (!method.state || method.state.trim() === '') &&
+                    !!method.last4
+            );
+            if (usMethodWithoutState) {
+                paymentMethodNeedingState = usMethodWithoutState;
+                showUpdateState = true;
+            }
+        }
+    }
+
+    // Reset when modal is closed
+    $: if (!showUpdateState && paymentMethodNeedingState) {
+        paymentMethodNeedingState = null;
+    }
 </script>
 
 <CardGrid overflow={false}>
@@ -170,3 +194,6 @@
         bind:showDelete
         linkedOrgs={selectedLinkedOrgs} />
 {/if}
+{#if showUpdateState && paymentMethodNeedingState && isCloud && hasStripePublicKey}
+    <UpdateStateModal bind:show={showUpdateState} paymentMethod={paymentMethodNeedingState} />
+{/if}
diff --git a/src/routes/(console)/organization-[organization]/billing/paymentMethods.svelte b/src/routes/(console)/organization-[organization]/billing/paymentMethods.svelte
index 445c65d107..449f165d48 100644
--- a/src/routes/(console)/organization-[organization]/billing/paymentMethods.svelte
+++ b/src/routes/(console)/organization-[organization]/billing/paymentMethods.svelte
@@ -13,6 +13,7 @@
     import ReplaceCard from './replaceCard.svelte';
     import EditPaymentModal from '$routes/(console)/account/payments/editPaymentModal.svelte';
     import PaymentModal from '$lib/components/billing/paymentModal.svelte';
+    import UpdateStateModal from '$lib/components/billing/updateStateModal.svelte';
     import { user } from '$lib/stores/user';
     import {
         ActionMenu,
@@ -44,6 +45,8 @@
     let showEdit = false;
     let showDelete = false;
     let showReplace = false;
+    let showUpdateState = false;
+    let paymentMethodNeedingState: PaymentMethodData | null = null;
     let isSelectedBackup = false;
 
     async function addPaymentMethod(paymentMethodId: string) {
@@ -96,6 +99,27 @@
         primaryMethod?.expired ||
         backupMethod?.lastError ||
         backupMethod?.expired;
+
+    // Check for US payment methods without state
+    $: {
+        if (methods?.paymentMethods && !showUpdateState && !paymentMethodNeedingState) {
+            const usMethodWithoutState = methods.paymentMethods.find(
+                (method: PaymentMethodData) =>
+                    method?.country?.toLowerCase() === 'us' &&
+                    (!method.state || method.state.trim() === '') &&
+                    !!method.last4
+            );
+            if (usMethodWithoutState) {
+                paymentMethodNeedingState = usMethodWithoutState;
+                showUpdateState = true;
+            }
+        }
+    }
+
+    // Reset when modal is closed
+    $: if (!showUpdateState && paymentMethodNeedingState) {
+        paymentMethodNeedingState = null;
+    }
 </script>
 
 <CardGrid overflow={false}>
@@ -323,3 +347,6 @@
         isBackup={isSelectedBackup}
         disabled={organization?.billingPlan !== BillingPlan.FREE && !hasOtherMethod} />
 {/if}
+{#if showUpdateState && paymentMethodNeedingState && isCloud && hasStripePublicKey}
+    <UpdateStateModal bind:show={showUpdateState} paymentMethod={paymentMethodNeedingState} />
+{/if}