📅 2026 Update: Recent Changes in Sales Tax Regulations

Since the original article was published, there have been important updates to sales tax rates and regulations in various states. These changes can affect how businesses handle sales tax compliance, registration, and filing. The earlier article continues further down the page, providing foundational knowledge about sales taxes.

📊 New Sales Tax Rate in North Carolina

Effective July 1, 2026, North Carolina has introduced a new sales and use tax rate structure. Businesses in the state must register for a sales and use tax permit and file returns accordingly. This change may impact pricing and financial planning for businesses operating in North Carolina.

📉 Rate Reduction in Ohio

As of October 1, 2025, Brown County, Ohio, reduced its sales and use tax rate from 7.25% to 7.00%. This reduction may affect how businesses calculate their tax obligations in the county. Companies need to update their systems to reflect this lower rate in their filings.

🗓️ Updated Sales Tax Filing Deadlines

In North Carolina, sales and use tax returns are due on the 20th day of the month following the reporting period. Ohio businesses must file by the 23rd day of the month after the reporting period. Keeping track of these deadlines is essential for timely compliance.

🏢 Resources for Businesses

Both the North Carolina Department of Revenue and the Ohio Department of Taxation provide resources and assistance for businesses regarding sales tax. These state agencies can help businesses understand their responsibilities and provide guidance on the new tax structures.

📌 Key Points to Remember

  • 🗓️ North Carolina’s new tax rate structure took effect July 1, 2026.
  • 📉 Brown County, Ohio, reduced its sales tax rate to 7.00%.
  • 🏢 State agencies offer resources for tax compliance.
  • ⏰ Filing deadlines vary: NC by the 20th, OH by the 23rd.

💡 Tips for Understanding Sales Taxes

Review the specifics of your tax situation with your attorney. It's important to ensure that you comply with current sales tax regulations.

🏷️ Know Your State's Tax Rate

Each state has different sales tax rates. For example, as of October 2026, Colorado has the lowest state rate at 2.9%, while California has one of the highest at 7.25%. Understanding your state tax rate is crucial for accurate pricing.

📅 Stay Informed on Rate Changes

Sales tax rates can change frequently. Businesses should regularly check with their state and local tax authorities to stay updated on any new developments that may affect their tax obligations.

📝 Register for a Tax Permit

In states like North Carolina and Ohio, businesses must register for a sales and use tax permit if they make taxable sales. Failing to register can lead to penalties and interest.

📊 File Your Returns on Time

Make sure to file sales and use tax returns by the deadlines set by your state. In North Carolina, returns are due on the 20th, while in Ohio, they are due on the 23rd. Late filings can incur penalties.

🔍 Understand Exemptions

Certain items may be exempt from sales tax in your state. For example, North Carolina exempts specific goods from the general 4.75% state rate. Familiarize yourself with what is exempt to avoid overpaying taxes.

🏆 Top Tax Services Ranked by User Reviews (2026)

This section highlights various tax services suitable for individuals and businesses navigating sales tax obligations. The rankings are based on Trustpilot data as of October 2026. Ratings can change, and they reflect user feedback, with more reviews often being left by dissatisfied customers.

🥇 1. TurboTax

TurboTax has been rated 4.0. Known for its user-friendly interface, it offers online tax filing software that helps users navigate complex tax situations. However, some users note the limited free version and upselling of additional services as drawbacks.

🥈 2. H&R Block

H&R Block holds a 4.2 rating. This service is recognized for its comprehensive tax preparation services and online filing options. Despite its strengths, users point out high fees for in-person services and varying customer service responsiveness as potential concerns.

🥉 3. TaxSlayer

TaxSlayer has received a 3.8 rating. It is known for being an affordable option with multiple filing choices for users. However, some customers report limited customer support and occasional software glitches as issues to consider.

4️⃣ Jackson Hewitt

Jackson Hewitt has a rating of 3.5. This service is known for in-person tax preparation and year-round support. Still, users have noted higher service fees and inconsistent quality across different locations.

5️⃣ Liberty Tax Service

Liberty Tax Service averages 3.2. It is known for its franchise tax preparation and seasonal promotions. However, customers have expressed concerns about variable service quality and aggressive marketing tactics that may detract from the overall experience.

🆓 Free Government Assistance

Both the North Carolina Department of Revenue and the Ohio Department of Taxation offer free resources and assistance for businesses concerning sales tax. These services help ensure that businesses understand their obligations and comply with current tax laws.

🔎 What to Compare When Choosing Tax Services

  • 💰 Cost of services offered
  • 🕒 Availability of customer support
  • 📈 User ratings and reviews
  • 📊 Range of filing options available
  • 📝 Ease of use of the platform

❓ Frequently Asked Questions

🤔 What is the new sales tax rate in North Carolina?

North Carolina implemented a new sales and use tax rate structure effective July 1, 2026. Businesses must register and adjust their filings according to this new structure.

💼 How do I file sales tax in Ohio?

Businesses in Ohio must file sales and use tax returns, with the deadline set for the 23rd day of the month following the reporting period. Keeping track of this deadline is crucial for compliance.

📅 Are there exemptions from sales tax?

Yes, exemptions from sales tax vary by state. For instance, North Carolina exempts certain items from its general 4.75% rate. Businesses should check with state authorities for specific exemptions.

🏢 Where can I find resources for sales tax compliance?

The North Carolina Department of Revenue and the Ohio Department of Taxation provide resources and assistance for businesses regarding sales tax compliance. These agencies can offer guidance tailored to your needs.

📊 How often do sales tax rates change?

Sales tax rates can change frequently due to new legislation or local tax adjustments. Businesses should regularly consult state and local tax authorities to stay informed about any changes.

📝 What are the penalties for not complying with sales tax laws?

Non-compliance with sales tax laws can lead to penalties and interest. It is essential for businesses to ensure timely and accurate filing to avoid these consequences.

⚖️ Recent Cases Related to Sales Tax

Recent court rulings have addressed various sales tax issues across the country, impacting how businesses operate and comply with tax regulations. These rulings can shape future interpretations of sales tax laws.

You can browse more rulings in the news section.

End of October 2026 Update





Special Sales Taxes You Should Know

Taxes are the way governments raise revenue to fund their operations, from road maintenance to social services and public safety. Sales taxes are a form of consumption tax that is added to the cost of goods and services at the point of sale. While sales taxes are generally imposed by the state and local governments, there are some special sales taxes that you should know.

What Are Special Sales Taxes?


Special sales taxes are taxes that are applied to specific categories of goods or services or under specific conditions. While they are similar to general sales taxes, which are applied to most goods and services, special sales taxes are often levied on specific products, certain industries, or special funding programs.

Special sales taxes can be temporary or permanent. They can be implemented for various reasons, such as to raise revenue, promote certain behaviors, protect public health, or fund specific programs. Here are some of the special sales taxes you should know.

Hotel and Lodging Taxes


Hotel and lodging taxes are a type of special sales tax that is common in the hospitality sector. These taxes are typically imposed by local governments, and they are generally added to the cost of hotel rooms, vacation rentals, and other lodging accommodations.

Hotel and lodging taxes are often used to fund local tourism and convention centers, cultural institutions, and other infrastructure projects. They are usually levied as a percentage of the total cost of the lodging, and they can vary widely among different jurisdictions.

For example, in New York City, there is a general sales tax rate of 4%, but hotels and lodging are subject to an additional occupancy tax of 5.875%, which brings the total tax rate to 9.5%. In contrast, in some smaller cities or towns, the hotel tax rate may be lower, or there may be no hotel tax at all.

Excise Taxes


Excise taxes are another type of special sales tax that is levied on specific goods or services, such as tobacco products, alcoholic beverages, gasoline, and certain luxury items. Excise taxes are often designed to discourage certain behaviors, such as smoking or excessive drinking, while also raising revenue for the government.

Excise taxes are usually imposed as a fixed amount per unit of the product, such as per pack of cigarettes or per gallon of gasoline. They can also be based on the value of the product, such as a sales tax on luxury cars. Excise taxes can vary widely among different jurisdictions, and they can be subject to frequent changes.

For example, the federal excise tax on a pack of cigarettes is $1.01 per pack, and many states also impose their own cigarette taxes on top of the federal tax. In California, the total state and local tax on a pack of cigarettes is $2.87, which is one of the highest cigarette taxes in the country.

Soda and Sugary Beverage Taxes


Soda and sugary beverage taxes are a special sales tax that has gained popularity in recent years as a way to combat obesity, diabetes, and other health problems associated with excessive sugar consumption. These taxes are usually imposed as a flat rate per ounce of the sugary beverage, such as soda, energy drinks, and sports drinks.

Soda and sugary beverage taxes are often controversial, as they are seen by some as a regressive tax that disproportionately affects low-income consumers. However, proponents argue that these taxes are an effective way to change consumer behavior, reduce public health costs, and raise revenue for local governments.

For example, in Philadelphia, there is a soda tax of 1.5 cents per ounce on sugary beverages, which has generated millions of dollars for the city's pre-K program, community schools, and other initiatives. Other cities, such as Seattle and San Francisco, have also implemented soda taxes, while some states, such as California and Colorado, have considered statewide soda tax proposals.

Internet and Digital Taxes


Internet and digital taxes are a type of special sales tax that has become increasingly relevant as more consumers shop online and use digital services. These taxes can take various forms, such as a sales tax on online purchases, a digital services tax on companies that provide online or digital services, or a data tax on companies that collect and use consumer data for commercial purposes.

Internet and digital taxes are often a contentious issue, as they can have significant implications for e-commerce, innovation, and consumer privacy. Some argue that these taxes are necessary to level the playing field between traditional retailers and online retailers, while others contend that they create unnecessary barriers to entry and stifle entrepreneurship.

For example, in the United States, there is currently no federal sales tax on online purchases, although individual states can impose their own sales tax on out-of-state transactions. However, some states, such as Illinois, have proposed or enacted digital services taxes on companies that provide online streaming, gaming, or other digital services.

Conclusion


Special sales taxes can take many forms and serve various purposes, from funding local projects to discouraging unhealthy behaviors or regulating e-commerce. These taxes can be complex and vary widely among different jurisdictions, so it's essential to stay informed and understand how they affect your business or personal finances. As governments continue to explore new revenue sources and respond to changing social and economic conditions, special sales taxes are likely to remain a dynamic and contested area of public policy.

There are several types of excise taxes and several of those are considered special sales taxes. Special taxes are imposed on items as a "sin" tax. In essence, these taxes are imposed on items that cause harm to the consumers health and sometimes to the health of those around them. For example, a person that consumer alcohol excessively, will likely have health problems that result from their drinking.

In addition, the person may chose to drive, or be in a position of responsibility while under the influence of alcohol, which could have disastrous results. For this reason, excise taxes are imposed to cover the cost of such negative consequences. The tax revenue may also be used for educational campaigns to discourage detrimental behavior. Most importantly, it is believed that the excise tax discourages the purchase of such items, or the excessive purchase of such items.

Cigarette taxes are imposed as an excise tax. Cigarettes taxes can be imposed on three levels. The federal cigarette tax is around one dollar a pack and could increase in the immediate future.

State cigarette taxes range from several cents to five dollars a pack. In addition, local governments may also levy an additional excise tax on cigarettes sold in that jurisdiction. Citizens that travel to other states to purchase cheaper cigarettes, will be subject to the use taxMotor Fuel Tax:

The motor fuel tax is imposed on gasoline and the rate of tax varies greatly from state to state. That excise tax can be as much as half of the price the consumer pays for a gallon of gasoline. The tax may be imposed by the federal, state and local tax jurisdictions.

The taxes are usually applied to gasoline and diesel, as they are utilized for transportation. Items like heating oil, may be taxed differently. The gasoline fuel tax is often considered to be income elasticincome inelastic.Tax on Alcohol:Authorization and Administration:

Taxes in the United States continue to be a point of contention. Many United States citizens argue that, as a nation, we are overtaxed. There have been many arguments against taxation as it stands now. Due to the bad economy, many Americans are struggling to make payments and purchase basic necessities. For that reason, some have recommended a decrease in certain types of taxes. In fact, there are many arguments that support the idea of lowered taxes, to increase individual savings.

Later, those savings will include increased personal spending, and an increase in tax revenue.  Conversely, there is an argument that taxes are a necessity, in order to aid the government in running a smooth operation. In fact, many arguments claim that lowering taxes would cause immense harm to an economy that is already suffering.