– Tax Foundation released “State and Local Sales Tax Rates, Midyear 2023” report.
– Covers 45 states and D.C. with statewide sales taxes and 38 states with local sales taxes.
– Some cases show local sales taxes surpassing state rates.
**Highest Combined State and Local Rates:**
– Tennessee (9.548%), Louisiana (9.547%), Arkansas (9.44%), Washington (9.4%), Alabama (9.24%).
**Highest Statewide Sales Tax Rate:**
– California at 7.25%.
**Lowest State-Level Sales Tax Rates:**
– Colorado (2.9%).
– Five states at 4%: Alabama, Georgia, Hawaii, New York, and Wyoming.
**State Rate Reductions:**
– South Dakota decreased state sales tax from 4.5% to 4.2% in July.
– New Mexico lowered sales tax from 5.125% to 5% in July 2022.
**Tax Breaks:**
– Alabama: Lowered sales tax rate on food from 4% to 3% (Sept. 1, 2023); could drop to 2% by Sept. 1, 2024.
– Kansas: No longer taxes separately stated delivery charges (July 1, 2023).
– Ohio: Added sales tax exemptions for children’s products (Oct. 1, 2023).
– Texas: Exempted sales tax on baby products and menstrual products (Sept. 1, 2023).
**Income Tax Nexus:**
– New Jersey adopted economic nexus sales tax thresholds (200+ transactions or $100,000) for income tax collection from out-of-state businesses.
**State Updates:**
– Alabama: Court declared retroactive application of 2014 tax revisions unconstitutional.
– Illinois: Qualified for occasional sale exemption on certain equipment purchases.
– Illinois: Waived penalties for out-of-state contractor due to reliance on professional advice.
– Illinois: Enhanced its map of sales and use tax lookup rates.
– New Mexico: Updated gross receipts tax collection responsibilities for online marketplace providers and sellers.
– Texas: Taxpayer held subject to sales and use tax on software application sales.
– Texas: Sales tax revenue increased by 2.7% in July 2023 compared to July 2022.
– Texas: Sales tax revenue for the past three months increased by 4.5% YoY.
Source: taxconnex.com
