📅 2026 Update: Recent Changes in Sales and Use Tax

Since the original article was published, there have been notable updates to sales and use tax laws in various states. These changes could affect businesses and consumers in significant ways. The details of those changes and their implications continue further down the page.

🏷️ New Sales Tax Rates in North Carolina

On July 1, 2026, North Carolina introduced a new sales and use tax rate structure. Businesses in the state must now register for a sales and use tax permit and file returns in line with this updated structure. This change highlights the importance of staying current with state tax regulations.

📊 Brown County, Ohio Sales Tax Reduction

As of October 1, 2025, Brown County, Ohio, has reduced its sales and use tax rate from 7.25% to 7.00%. This alteration can impact the overall tax burden for businesses operating in that county, making it essential for them to adjust their tax filings accordingly.

💰 Current State Sales Tax Rates

As of October 2026, state sales tax rates vary significantly across the U.S. They range from 2.9% in Colorado to 7.25% in California. Understanding these rates can help businesses calculate their tax obligations more accurately and plan their pricing strategies.

📅 Filing Deadlines in North Carolina and Ohio

In North Carolina, sales and use tax returns are due on the 20th day of the month following the reporting period. Meanwhile, Ohio businesses are required to submit their returns by the 23rd day of the month after the period ends. Keeping track of these deadlines is vital for maintaining compliance and avoiding penalties.

📌 Key Points to Remember

  • 🗓️ North Carolina's new tax structure took effect on July 1, 2026.
  • 📉 Brown County reduced its sales tax rate to 7.00% as of October 1, 2025.
  • 📊 State sales tax rates now range from 2.9% to 7.25%.
  • 📅 North Carolina's returns are due on the 20th, while Ohio's are due on the 23rd.

💡 Tips for Understanding Sales and Use Tax

Review the details of your own situation with your attorney.

📝 Stay Informed About Tax Changes

Sales tax rates and regulations can change frequently. Businesses should regularly check with state and local tax authorities to stay informed about any updates that may affect their tax obligations.

📄 Register for the Correct Tax Permits

In both North Carolina and Ohio, businesses must register for a sales and use tax permit if they sell tangible personal property or taxable services. Ensuring proper registration is crucial for compliance with state laws.

📅 Keep Track of Filing Deadlines

Each state has specific deadlines for submitting sales and use tax returns. North Carolina requires returns by the 20th day of the month after the reporting period, while Ohio mandates submissions by the 23rd day. Missing these deadlines can lead to penalties.

🛒 Understand Sales Tax Exemptions

Sales tax exemptions vary by state. For example, North Carolina exempts certain items from its 4.75% state rate. Businesses should consult their state tax authority for a complete list of exemptions that may apply to them.

📞 Utilize Available Resources

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 resources can help businesses understand their obligations and navigate the tax system.

🏆 Top Tax Preparation Services Ranked by User Reviews (2026)

This section covers various tax preparation services relevant to understanding sales and use tax. Trustpilot data from October 2026 has been used to rank these services. Ratings may change over time, as unhappy customers often leave more reviews, influencing overall scores.

🥇 1. TurboTax

TurboTax has been rated 4.0 on Trustpilot. It is known for its user-friendly online tax filing software. However, users note that the free version is limited, and there may be upselling for additional services.

This tool can help businesses file their taxes efficiently, but users should be aware of potential extra costs.

🥈 2. H&R Block

H&R Block holds an impressive score of 4.2. It is recognized for both its tax preparation services and online filing options. While it provides comprehensive support, the in-person services tend to have high fees, which can be a drawback for some users.

This service is a solid choice for those needing professional assistance.

🥉 3. TaxSlayer

TaxSlayer has a Trustpilot score of 3.8. It is appreciated for its affordability and multiple filing options. However, users have mentioned limited customer support and occasional software glitches.

This service can be suitable for businesses looking for cost-effective solutions, but potential users should be prepared for some challenges.

4️⃣ Jackson Hewitt

Jackson Hewitt has a rating of 3.5. It is known for in-person tax preparation services and year-round support. Some users report higher service fees and inconsistent quality across different locations.

This service may appeal to those who prefer face-to-face interactions but should be cautious about varying service experiences.

5️⃣ Liberty Tax Service

Liberty Tax Service has a Trustpilot score of 3.2. It is known for franchise tax preparation and seasonal promotions. However, users often find variability in service quality and have noted aggressive marketing tactics.

Businesses should weigh the benefits of promotions against the potential for inconsistent service.

🆓 Free Government and Nonprofit Help

Both the North Carolina Department of Revenue and the Ohio Department of Taxation offer free resources and assistance for businesses regarding sales and use tax. These services can help businesses understand their obligations without incurring additional costs.

🔎 What to Compare When Choosing Tax Services

  • 📝 User ratings and reviews from various platforms
  • 💰 Fees associated with different services
  • 🛠️ Availability of features that meet specific needs
  • 📞 Customer support options and responsiveness
  • 📅 Filing deadlines and requirements

❓ Frequently Asked Questions

❓ What is the sales tax rate in North Carolina?

North Carolina's state sales tax rate is 4.75%, but local taxes can increase the total rate for certain areas.

❓ How do I file sales tax in Ohio?

In Ohio, businesses must file their sales and use tax returns by the 23rd day of the month following the end of the reporting period using the appropriate forms.

❓ Are there exemptions to sales tax in Ohio?

Yes, sales tax exemptions in Ohio vary and may include certain items like food and prescription drugs. Businesses should check with the Ohio Department of Taxation for specific exemptions.

❓ What should I do if I miss a sales tax deadline?

If a business misses a sales tax deadline, it is important to file as soon as possible to minimize penalties and interest. Contacting the state tax authority for guidance can also be beneficial.

❓ How often do sales tax rates change?

Sales tax rates can change frequently, depending on state and local legislation. Businesses should monitor updates from local tax authorities regularly.

❓ Can I get help with sales tax from government resources?

Yes, both the North Carolina Department of Revenue and the Ohio Department of Taxation offer resources and assistance to help businesses understand and comply with sales tax laws.

⚖️ Recent Cases Related to Sales and Use Tax

Several recent court rulings have clarified issues surrounding sales and use tax compliance and obligations. These rulings emphasize the importance of proper registration and adherence to state regulations.

For the latest updates, you can browse more rulings on the news page.

End of October 2026 Update





Introduction

Tanning is a popular way of getting a dark and glowing skin. However, prolonged exposure to ultraviolet (UV) radiation from tanning beds and sunlamps can cause skin cancer and other health problems. The US government, therefore, imposed a tanning tax on indoor tanning services in 2010 to discourage their use and raise revenue for healthcare programs. This article aims to discuss the tanning tax in detail, including its history, purpose, implementation, effects, criticism, and current status.History

The idea of taxing indoor tanning services was first proposed in 2009 by the then-Senator and now President Barack Obama, as part of his signature healthcare reform law known as the Patient Protection and Affordable Care Act (PPACA) or the ACA. The ACA aimed to improve access to healthcare for all Americans by expanding health insurance coverage, reducing costs, and improving quality. To finance some of the ACA's provisions, such as subsidies for low-income individuals and small businesses to buy health insurance, the law included several revenue-raising measures, including the tanning tax.

The tanning tax required all indoor tanning services to collect a 10% excise tax on the amount paid for the service, starting July 1, 2010. The tax applied to both commercial tanning salons and businesses that offered tanning services such as spas, gyms, and hotels. It did not apply to outdoor tanning, spray tans, or self-tanning products.

Tanning Tax

The purpose of the tanning tax was twofold: to discourage the use of indoor tanning services, especially among young people, who were at higher risk of developing skin cancer due to their increased UV sensitivity, and to generate revenue for the federal government. According to the Congressional Budget Office (CBO), the tanning tax was expected to raise about $2.7 billion over ten years, from 2010 to 2019.

Implementation

To enforce the tanning tax, the Internal Revenue Service (IRS) issued guidelines for tanning businesses and consumers. Tanning salons and other providers of indoor tanning services were required to register with the IRS and collect the tax from their customers. They also had to file quarterly excise tax returns and pay the tax to the IRS.

Consumers who used indoor tanning services were required to pay the tax at the time of the service. The tax was included in the price of the service and could not be waived or refunded. Consumers did not have to report the tax on their income tax returns unless they operated a tanning business or had other tax obligations related to the service.

📝 See Also

Effects

The tanning tax had several effects on the tanning industry, public health, and revenue. Some of these effects are discussed below.

Tanning Industry

The tanning tax had a negative impact on the indoor tanning industry, which had already been struggling due to competition from outdoor tanning, self-tanning products, and economic recession. According to the Indoor Tanning Association (ITA), a trade group representing the indoor tanning industry, the tanning tax led to a decline in business, revenue, and jobs, as well as an increase in prices, taxes, and regulations.

The ITA claimed that many tanning salons closed or went out of business due to the tax, leaving their employees and customers without jobs or services. The ITA also argued that the tax was unfair and discriminatory, as it targeted a specific industry and product. The ITA filed a lawsuit against the tanning tax, claiming that it was unconstitutional and exceeded Congress's taxation powers. However, the lawsuit was dismissed by a federal judge in 2012, who ruled that the tax was a valid exercise of Congress's authority under the Commerce Clause.

Public Health

The tanning tax had a positive impact on public health by reducing the use of indoor tanning services, which are known to cause skin cancer and other health problems. According to the Centers for Disease Control and Prevention (CDC), exposure to UV radiation from indoor tanning increases the risk of developing melanoma, the deadliest form of skin cancer, by 59%, compared to non-users. Indoor tanning also increases the risk of other skin cancers, such as basal cell carcinoma and squamous cell carcinoma.

The CDC, along with other public health organizations such as the American Cancer Society (ACS) and the Skin Cancer Foundation (SCF), supported the tanning tax as a way to discourage tanning bed use, especially among young people. According to the CDC, about 1 in 6 teenagers and young adults use indoor tanning services, despite the known risks. The CDC recommended that people protect themselves from UV radiation by avoiding tanning beds, using sunscreen, wearing protective clothing and hats, seeking shade, and getting regular skin cancer screenings.

Revenue

The tanning tax had a mixed impact on revenue, as it raised some money for the government but also faced challenges in enforcement and compliance. According to the IRS, the tanning tax generated about $680 million in revenue from 2010 to 2018. However, this amount was lower than the CBO's estimated revenue of $2.7 billion, as some tanning businesses closed or evaded the tax, and some consumers switched to outdoor tanning or other alternatives.

The IRS also faced difficulties in enforcing the tax, as some tanning businesses failed to register or report their returns, and some consumers refused to pay the tax or claimed exemptions. The IRS conducted audits and investigations of non-compliant businesses, which resulted in penalties and fines. However, the success rate of these efforts varied, and some businesses continued to operate without paying the tax.

Criticism

The tanning tax faced criticism from various sources, including the tanning industry, some lawmakers, and some consumers. The main criticisms are summarized below.

Unfair and Discriminatory

The tanning tax was criticized as being unfair and discriminatory, as it targeted a specific industry and product that was already regulated and taxed by state and local governments. The tanning industry argued that the tax unfairly penalized small businesses and low-income consumers, who could not afford to pay higher prices or go to outdoor tanning facilities.

Some lawmakers who opposed the tanning tax also argued that it discriminated against women and young people, who were more likely to use indoor tanning services. They cited data showing that about 80% of indoor tanners were women, and many of them started tanning at a young age. They also argued that the tax was a regressive tax, which imposed a higher burden on lower-income individuals and families.

Ineffective and Inefficient

The tanning tax was criticized as being ineffective and inefficient, as it failed to achieve its stated goals of reducing tanning bed use and raising revenue. Some tanning businesses and consumers simply switched to outdoor tanning or other alternatives, such as spray tans or home tanning products, which were not subject to the tax. The tanning industry argued that the tax did not reduce skin cancer rates or improve public health, as many other factors, such as genetics, lifestyle, and environment, also played a role in skin cancer development.

Some critics also argued that the tanning tax was an example of government overreach and micromanagement, as it imposed a tax on a legal and popular activity that did not pose a direct threat to public health or safety. They compared it to other "sin taxes" on cigarettes, alcohol, and sugary drinks, which were also criticized for being paternalistic and punitive.

Current Status

The tanning tax is still in effect, although its implementation and enforcement may vary depending on the state and local laws. The ACA, which included the tanning tax, has undergone several legal and political challenges, including a Supreme Court ruling in 2012 that upheld its constitutionality but allowed states to opt out of its Medicaid expansion provision. The ACA was also partially repealed in 2017 by the Tax Cuts and Jobs Act (TCJA), which eliminated the ACA's individual mandate penalty but left the tanning tax intact.

The tanning tax may face further challenges and changes in the future, depending on the political and public health climate. Some lawmakers and public health advocates may push for a higher tax rate or broader coverage of indoor tanning services, while some tanning businesses and consumers may lobby for its repeal or modification. As of now, the tanning tax remains a controversial and complex issue that reflects the trade-off between public health and revenue, and the role of government in regulating risky behaviors.


What is the Tanning Tax?

Officially enacted on July 1st of 2010, the tanning tax was implemented as a means to collect revenue for President Obama’s health care reform bill. The tanning tax is a 10% levy on all indoor tanning services—those individuals who utilize tanning beds or any service related to indoor tanning (including spray tans) are subject to this taxation. When passed, congress claimed the tanning tax will bolster government revenue by nearly $3 billion over the next decade.

Information Regarding the Tanning Tax:

Who is Responsible for Paying the Tanning Tax?

All indoor tanning service providers are responsible for collecting the tanning tax from any client or person paying for the services provided by the tanning salon or provider. The government defines a “taxable indoor tanning service” as a service who employs any electronic product designed to incorporate one or multiple ultraviolet lamps intended for the irradiation of a customer via ultraviolet radiation; the beds or providers must have wavelengths in air between 200 and 400 nanometers.

How is the Tanning Tax Reported?

The individual receiving payment for providing tanning services must report the tanning tax on Form 720, the Quarterly Federal Excise Tax Return. This form is filed quarterly. Because an IRS form is required to file the tanning tax, all indoor tanning services are required to obtain employment identification numbers. Moreover, as with any other tax return, all tanning service providers must maintain sufficient records and books demonstrating the amount of revenue obtained from supplying indoor tanning services.