📅 2026 Update: Changes in Sales Tax Regulations

Since the original article was published, there have been important changes to sales tax regulations in various states. New tax rates have been implemented, and existing ones have been adjusted. This update highlights these changes and their impact on sales tax transactions.

Readers can find further details in the original article below.

🏷️ New Sales Tax Rates in North Carolina

On July 1, 2026, North Carolina introduced a new sales and use tax rate structure. This change means businesses need to adapt their tax calculations and reporting processes. It is vital for businesses to register for a sales and use tax permit under the new structure to ensure compliance.

📉 Ohio's Rate Reduction

Effective October 1, 2025, Brown County, Ohio, reduced its sales and use tax rate from 7.25% to 7.00%. This change can affect how businesses calculate sales tax for sales made in that county. Businesses should update their systems to reflect this new rate for accurate tax reporting.

📆 Filing Deadlines

Sales and use tax return deadlines have specific dates. In North Carolina, returns are due on the 20th day of the month after the reporting period. In Ohio, the deadline is the 23rd day of the following month.

Businesses must track these dates to avoid penalties for late filing.

📜 Sales and Use Tax Exemptions

Sales tax exemptions can vary by state. In North Carolina, certain items are exempt from the general 4.75% state rate. It is crucial for businesses to check the exemption list to ensure they do not charge tax on exempt items.

📌 Key Points to Remember

  • 🗓️ North Carolina's new sales tax structure started on July 1, 2026.
  • 🏷️ Brown County, Ohio, reduced its sales tax rate to 7.00% as of October 1, 2025.
  • 📅 Filing deadlines are the 20th in North Carolina and the 23rd in Ohio.
  • 📜 Exemptions vary by state; check local regulations for details.

💡 Tips for Understanding Sales Tax Regulations

Reviewing your sales tax obligations with an attorney can help clarify your specific situation.

🏢 Registering for Sales Tax Permits

All businesses selling tangible personal property or taxable services in North Carolina and Ohio need to register for a sales and use tax permit. This registration is crucial for compliance with state regulations.

🧾 Accurate Record-Keeping

Maintaining accurate records of sales and tax collected is essential. This information will be necessary for filing returns and defending against audits.

🔍 Stay Updated on Tax Changes

Sales tax rates and regulations can change frequently. Businesses should regularly check with state and local tax authorities for the latest updates to remain compliant.

📅 Understand Your Filing Deadlines

Filing deadlines are different in each state. Knowing when to submit returns can help avoid late fees and penalties.

📜 Check for Exemptions

Some items may be exempt from sales tax in your state. Familiarize yourself with the exemptions to ensure proper pricing and compliance.

🏆 Tax Services Ranked by User Reviews (2026)

This section lists services that assist with tax preparation and filing, specifically linked to sales tax compliance. The order is based on Trustpilot data as of October 2026. Ratings can change, and it’s essential to consider customer feedback, as unhappy clients tend to leave more reviews.

🥇 1. Jackson Hewitt

Jackson Hewitt has been rated 3.5. It is known for its in-person tax preparation and year-round support. However, some customers report higher service fees and inconsistent quality at different locations, which may be a concern for businesses seeking reliable sales tax filing support.

🥈 2. Liberty Tax Service

Liberty Tax Service holds a 3.2 rating. This company specializes in franchise tax preparation and often promotes seasonal offers. However, service quality can vary widely, and some users have noted aggressive marketing tactics that could detract from the overall experience.

🥉 3. H&R Block

H&R Block has an impressive 4.2 rating. It is widely recognized for its comprehensive tax preparation services and online filing options. Despite its strong reputation, some customers have mentioned high fees for in-person services and variable responsiveness from customer service.

4️⃣ TurboTax

TurboTax averages a 4.0 rating. It is popular for its user-friendly online tax filing software. However, users may encounter limitations with the free version, and there is a tendency to upsell additional services that could lead to unexpected costs.

5️⃣ TaxSlayer

TaxSlayer holds a 3.8 rating. It is known for being an affordable option for tax filing, offering multiple filing options to suit different needs. Some users have reported limited customer support and occasional software glitches, which could impact the filing process.

🆓 Free Government Assistance

Both the North Carolina Department of Revenue and the Ohio Department of Taxation offer resources and assistance for businesses regarding sales and use tax. These government agencies can provide valuable guidance on compliance and help businesses understand their obligations.

🔎 Considerations When Choosing Tax Services

  • 🔍 Check the service rating and number of reviews.
  • 📅 Review the types of services offered and how they relate to sales tax compliance.
  • 💲 Compare fees and understand what’s included in the service.
  • 🛠️ Look for customer support options and availability.
  • 📝 Evaluate the user interface and ease of use for online filing options.

❓ Frequently Asked Questions

❓ What is the current sales tax rate in California?

As of October 2026, California has a state sales tax rate of 7.25%. Local taxes can increase this rate, so total sales tax may be higher in certain areas.

🔄 How often do sales tax rates change?

Sales tax rates can change at any time. Businesses should regularly check with state and local tax authorities for updates on rates and regulations.

📅 What happens if I miss a sales tax filing deadline?

Missing a sales tax filing deadline can lead to penalties and interest. It's important to file on time to avoid these additional costs.

📜 Are there exemptions for sales tax in Ohio?

Yes, Ohio has specific exemptions for certain goods and services. Businesses should review the exemption list provided by the Ohio Department of Taxation.

🏢 Do I need to register for a sales tax permit if I sell online?

Yes, businesses selling tangible personal property or taxable services online must register for a sales tax permit in states where they have a tax obligation.

📊 How can I find out the sales tax rate for my area?

Businesses can check their state and local tax authority websites to look up current sales tax rates for specific jurisdictions.

⚖️ Recent Court Cases Related to Sales Tax

Recent court rulings have addressed various aspects of sales tax regulations, impacting how businesses comply with these laws. These cases highlight the ongoing legal discussions surrounding sales tax obligations and exemptions.

For more recent rulings, feel free to browse more rulings on the news page.

End of October 2026 Update





What Transactions are Subjected to Sales Tax?

Sales tax is a type of tax that consumers pay whenever they purchase goods or services. It is also known as value-added tax (VAT) or goods and services tax (GST) in some countries. The rate of sales tax varies from state to state and is determined by the government. In this article, we will discuss the transactions that are subjected to sales tax and the different types of sales taxes in the United States.

What is Sales Tax?

What Transactions are Subjected to Sales Tax?

Sales tax is a state tax that is collected on the purchase of goods and services. It is usually a percentage of the purchase price, and the rate varies from state to state. In some states, cities and counties also impose their own sales taxes on top of the state tax.

Businesses collect sales tax from customers and remit it to the state government. The government then uses this revenue to fund public services and infrastructure. The amount of sales tax collected is based on the total amount of the purchase price, including any fees or charges.

What Transactions are Subjected to Sales Tax?

Sales tax is typically charged on most tangible goods and some services. Different states have different rules and exemptions, but generally, the following types of transactions are subjected to sales tax:

1. Retail Sales

When a consumer purchases a product from a retailer, they are usually charged sales tax. This includes goods such as clothing, appliances, electronics, and furniture.

2. Services

Some states also tax services such as car repairs, lawn care, and cleaning services. However, not all states tax services.

📝 See Also

3. Lodging

Many states impose an additional tax on hotels, motels, and other lodging establishments. This is often referred to as a lodging tax or occupancy tax.

4. Rental of Personal Property

Many states also tax the rental of personal property, such as equipment, vehicles, and tools.

5. Digital Products

In recent years, more states have begun taxing digital products such as movies, music, and e-books. This is due to the rise in online sales and subscription-based services.

6. Admissions and Amusements

States also tax admissions to events such as concerts, sporting events, and movies. They may also tax other types of amusements such as arcade games, bowling alleys, and amusement parks.

7. Prepared Food

Many states tax prepared food, such as meals at restaurants or fast food establishments. However, some states have exemptions for food that is consumed off-premises or is not considered a meal.

8. Alcohol and Tobacco Products

Most states tax alcohol and tobacco products heavily, either through an excise tax or a sales tax.

Different Types of Sales Taxes in the United States

There are different types of sales taxes that are imposed by states and local governments in the United States. These include:

1. State Sales Tax

All states except for Alaska, Delaware, Montana, New Hampshire, and Oregon impose a state sales tax. The rate varies from state to state and can range from 2.9% to 7.25%.

2. Local Sales Tax

Many cities, counties, and other local jurisdictions also impose their own sales taxes on top of the state tax. These taxes can vary significantly and can increase the overall tax rate in some areas.

3. Use Tax

In some cases, consumers may be required to pay a use tax instead of a sales tax. This occurs when a consumer purchases goods from an out-of-state vendor who is not required to collect sales tax. The use tax is essentially the same as a sales tax and is intended to ensure that all purchases are taxed equally, regardless of where they were made.

4. Excise Tax

Some products, such as gasoline and cigarettes, are subject to an excise tax. This tax is usually included in the price of the product and is collected by the retailer or distributor.

Conclusion

Sales tax is an important revenue source for state and local governments. The transactions that are subjected to sales tax vary from state to state, but generally include tangible goods and some services. Different types of sales taxes apply in different jurisdictions, including state, local, use, and excise taxes. It is important for consumers and businesses to understand and comply with sales tax regulations to avoid penalties and maintain compliance.


There are several types of transitions that are subjected to the general sales tax. However, each tax jurisdiction makes specific and unique determinations as to the manner in which sales taxes are imposed. The regular sales tax is applied to purchases, as a percentage of the cost of an item. Merchandise purchases online may not be subjected to a sales tax at the point of purchase, if the company does not have a physical presence in the state where the item is being shipped.

However, the consumer is still required to pay the tax directly to their state. That tax burden however, only applies if the type of merchandise is normally taxed in that state. Each state taxes differing merchandise and imposes taxes at a different percentage of the sale price. In addition to the state sales tax, there are local sales taxes imposed in certain circumstances. Each local state tax must adhere to state and Federal tax restrictions.

Regular Sales:

Sales taxes apply to the purchase of many goods and services. However, each tax jurisdiction makes specific and unique determinations at to tax rates and merchandise that is subject to a sales tax. For example, some states do not impose a tax on provided services, while others do.

The regular sales tax sometimes applies to merchandise such as electronics, clothing and food. However, each tax jurisdiction can decide to exempt certain purchases from the tax. For example, some states do not tax food considered necessary, such as bread and milk. Yet, those states may tax food items considered a luxury, such as candy and prepared foods. Although each state makes those determinations, local governments may also add a separate sales tax to merchandise and services.

Internet Sales:

Consumers that make purchases online, may or may not be subject to an immediate sales tax on their purchase. Some companies that conduct business online, charge a state sales tax, including on shipping and handling,while others do not. The factors that determine if a  company charges a sales tax will depend on where the company is located, and whether it has locations in other states. For example, a department store, which has stores and warehouses in many states, would likely charge a sales tax on purchases delivered to every state.

Whereas a small business, which perhaps has only one location, would only charge a sales tax to shipments within the state where they are located. In purchases where there is no immediate sale tax, the consumer is expected to make a tax payment directly to their state, and local government, if the taxes would normally apply to the purchase. For example, if a consumer purchases clothes online, and their state does not impose a sales tax, they are not required to pay a sales tax on those items purchased online. However, if their state does impose a sales tax on clothing, they are required to remit payment to their state. While out of state purchases incur a use tax, that tax is still considered a sales tax.

State Variations:

Each state has variations in the way that they impose sales taxes. In most cases, each state will impose a sales tax directly to the consumer at the pint of purchase. In other words, when a consumer purchases items in which the state imposes a sales tax, the consumer will pay that sales tax when the purchase is made.

Sales taxes are currently imposed as a percentage of the sales price of merchandise, and services in some jurisdictions. Yet, some states do not impose a sales tax which is paid directly by the consumer. Some states, such as Hawaii, impose a sales tax which is paid by businesses, as a percentage of income from sales in a tax year. That business likely passes that tax on to the consumer through adding to the base price of an item. In both direct sales taxes, and other types of taxes, the price of that tax generally gets passed onto the consumer.