Fewer Sales Tax Rate Changes in 2018

According to the annual End-of-Year Tax Rate Report issued by Vertex Inc., a provider of tax technology and services, there were 619 standard sales tax rate changes in 2018, a decrease from the same period in 2017. In addition, the report shows there have been 5,886 new and changed standard sales tax rates over the past 10 years.

“Despite a decrease from 2017, tax professionals still had to manage more than 600 standard sales tax rate changes, as well as new reporting requirements following the South Dakota v. Wayfair decision. The U.S. indirect tax landscape continues to become even more complex,” said Bernadette Pinamont, Vertex vice president of tax research. “The burden of compliance has intensified as states started establishing post-Wayfaireconomic nexus thresholds, as well as initiating separate returns for out-of-state retailers.”

The Vertex 2018 End-of-Year Tax Rate Report lists four standard state sales tax changes during the first half of 2018:

Effective January 1, 2018, New Jersey decreased its rate from 6.875 percent to 6.625 percent.
Guam increased its Business Privilege Tax from 4.000 percent to 5.000 percent, effective April 1, 2018.
Effective July 1, 2018, Louisiana decreased its rate from 5.000 percent to 4.450 percent.
The District of Columbia increased its rate from 5.750 percent to 6.000 percent, effective October 1, 2018.

Additionally, the combined national sales tax rates average increased slightly to 10.0646 percent, up from 10.0001 percent in 2017.

Puerto Rico currently has the highest state sales tax rate at 10.500 percent.
Indiana, Mississippi, Rhode Island and Tennessee have the second highest state sales tax rate at 7.000 percent.
Kodiak and Wrangell, both in Alaska, and Winter Park, CO have the highest city sales tax rate at 7.000 percent. Hoonah and Selawik, both in Alaska, have the second highest rate of 6.500 percent.
All areas located within the Coconino County region of the Navajo Indian Reservation in Arizona have the highest combined sales tax rate of 12.900 percent. This includes Tuba City (including the surrounding areas that are in the To’Nanees’Dizi Local Government).

The report highlights ever-changing and varying standard sales tax rates across jurisdictions. In the last 10 years in the U.S. there have been:

2,214 new standard sales tax rates, an average of 221 per year;
3,672 standard sales tax changes, an average of 367 per year; and
5,886 standard new and changed sales tax rates, an average of 588 per year.