2017 Sales Tax Changes Took Effect Jan. 1

2017 Sales Tax Changes Took Effect Jan. 1

Sales tax doesn’t often make headlines, but with changes in multiple states, sales tax is making waves and reshaping the way companies in the direct selling industry manage their business. That trend is likely to continue into 2017. The New Year brings new taxes, new exemptions, and renewed efforts by states to implement internet sales taxes. It will also bring plenty of the usual suspects, like sales and use tax rate changes.

State sales tax

  • The state sales and use tax rate in California will drop from 7.5% to 7.25% under Proposition 30, which temporarily increased the rate by 0.25% through December 1, 2016. The state rate decrease also affects certain partial state tax exemptions.
  • To offset a recent gas tax hike, the state sales and use tax rate in New Jersey will decrease from 7% to 6.875% on January 1, 2017. It will drop further in 2018.
  • North Carolina use tax will apply to businesses storing tangible personal property or digital property in the state for any period of time. This expansion of use tax is due to the enactment of Senate Bill 729.
  • However, Missouri sales and use tax will not be expanded to any currently exempt services in 2017. On November 8, voters approved prohibiting the expansion of sales tax to any services not taxed as of January 1, 2015. It will be interesting to see if Missouri legislators attempt to capture additional sales tax revenue another way.

Local sales tax

The following states have announced local sales and use tax rate changes, that went into effect January 1:

  • Arkansas
  • Florida
  • Illinois
  • Kansas
  • Minnesota
  • Nebraska (also boundary changes, which can impact rates)
  • Oklahoma
  • Utah
  • Washington
  • Wisconsin

To learn more about these changes and how they affect your business, request a copy of the 2017 Sales Tax Changes whitepaper from Avalara.

About Avalara

Avalara helps businesses of all sizes achieve compliance with transactional taxes, including VAT, sales and use, excise, communications, and other tax types. The company delivers comprehensive, automated, cloud-based solutions that are fast, accurate, and easy to use. Avalara’s Compliance Cloud™ platform helps customers manage complicated and burdensome tax compliance obligations imposed by state, local, and other taxing authorities throughout the world.