📅 2026 Update: Changes to US Sales Tax Regulations

Since the original article was written, there have been several notable changes in sales tax regulations across the United States. Key updates include new tax rates in North Carolina and Ohio, along with adjustments in combined state and local sales tax rates in various areas. The details below highlight the changes that matter most for understanding sales tax in 2026.

The earlier article continues further down the page.

🏷️ New Sales Tax Rate Structure in North Carolina

As of July 1, 2026, North Carolina implemented a new sales and use tax rate structure. Businesses must register for a sales and use tax permit and file returns according to this updated framework. This change is significant for companies operating in the state, as compliance is necessary to avoid penalties.

📉 Ohio's Tax Rate Adjustment

On October 1, 2025, Brown County, Ohio, reduced its sales and use tax rate from 7.25% to 7.00%. This reduction may affect businesses filing in this area. Companies should ensure they are aware of this change when preparing their tax returns.

📊 Current State Sales Tax Rates

As of October 2026, state sales tax rates range from 2.9% in Colorado to 7.25% in California. These rates can significantly affect the overall tax burden for businesses and consumers alike. It’s important for businesses to stay updated on these rates as they impact pricing and profitability.

⏰ Filing Deadlines and Requirements

Sales and use tax returns in North Carolina are due on the 20th day of the month following the reporting period, while Ohio has a deadline of the 23rd day. Businesses should familiarize themselves with these deadlines to ensure timely filings and avoid late fees.

📌 Key Points to Remember

  • 🏷️ New sales and use tax rates in North Carolina effective July 1, 2026.
  • 📉 Ohio's Brown County reduced its rate to 7.00% on October 1, 2025.
  • 📊 Current state sales tax rates range from 2.9% to 7.25%.
  • ⏰ Filing deadlines vary: 20th in North Carolina, 23rd in Ohio.
  • 📈 Stay informed on rate changes and compliance requirements.

💡 Tips for Understanding Sales Tax

Reviewing your specific situation is important, so consult with your attorney to understand how these changes might affect you.

📝 Stay Updated on Tax Rates

Sales tax rates can change frequently. Businesses should regularly check with state and local tax authorities for the latest rates. This ensures compliance and helps avoid unexpected costs.

📅 Know Your Filing Deadlines

Filing deadlines differ by state. For North Carolina, returns are due on the 20th, while in Ohio, they're due on the 23rd. Keeping track of these dates is crucial for timely submissions.

📋 Register for a Sales Tax Permit

If you are a business making taxable sales in North Carolina or Ohio, you must register for a sales and use tax permit. Registration processes can vary by state, so it’s important to follow the specific guidelines.

📊 Understand Exemptions

Sales tax exemptions vary by state. For example, North Carolina exempts certain items from its general 4.75% state rate. Knowing what qualifies for exemption can reduce your overall tax liability.

🆓 Utilize Available Resources

Both the North Carolina Department of Revenue and the Ohio Department of Taxation provide resources to help businesses understand and comply with sales tax laws. Take advantage of these free tools for guidance.

📈 Monitor Compliance

Non-compliance with sales tax laws can lead to penalties and interest charges. It’s essential for businesses to maintain accurate records and ensure timely and correct filings.

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

This section highlights tax preparation services that assist with sales tax matters. The order follows Trustpilot data checked in October 2026. Ratings are just one measure of service quality; customer experiences can vary widely.

🥇 1. Jackson Hewitt

Jackson Hewitt has been rated 3.5 on Trustpilot. The company is known for its in-person tax preparation and year-round support. However, it has higher service fees and inconsistent quality across different locations, which can affect customer satisfaction.

🥈 2. Liberty Tax Service

Liberty Tax Service holds a 3.2 rating. It is known for franchise tax preparation and seasonal promotions. Despite its offerings, customers have noted variable service quality and aggressive marketing tactics that may not appeal to everyone.

🥉 3. H&R Block

H&R Block averages 4.2. This company is recognized for its comprehensive tax preparation services and online filing options. Despite its positive reputation, customers often cite high fees for in-person services and variable responsiveness in customer service.

4️⃣ TurboTax

TurboTax has a rating of 4.0. It is known for user-friendly online tax filing software. However, the limited features of the free version and upselling of additional services are common points of frustration among users.

5️⃣ TaxSlayer

TaxSlayer averages 3.8. The service is recognized for its affordable tax filing and multiple options for users. Some customers report limited customer support and occasional software glitches, which can hinder the filing experience.

🆓 Free Government Assistance

Both the North Carolina Department of Revenue and the Ohio Department of Taxation offer resources for businesses regarding sales and use tax. These government agencies provide guidance and support at no cost.

🔎 What to Compare When Choosing a Tax Service

  • 📝 Service fees and costs associated with tax filing.
  • 🔍 Customer reviews and overall ratings on platforms like Trustpilot.
  • 🏢 Availability of in-person support versus online options.
  • ⚖️ Range of services offered, including sales tax support.
  • 📞 Responsiveness of customer service and support resources.

❓ Frequently Asked Questions

❓ What is the current sales tax rate in my state?

Sales tax rates vary by state. For example, as of October 2026, rates range from 2.9% in Colorado to 7.25% in California. Check with your state tax authority for the most accurate rates.

🏢 How do I register for a sales tax permit?

To register for a sales tax permit, businesses must follow the guidelines of their state’s tax authority. This typically involves completing a registration form and providing relevant business information.

📅 What happens if I miss the filing deadline?

Missing the filing deadline can result in penalties and interest charges. It is essential to file on time to avoid these additional costs.

🏷️ Are there exemptions to sales tax?

Yes, exemptions vary by state. For example, North Carolina exempts certain items from its general 4.75% state rate. Businesses should consult local regulations for specific exemptions.

🔄 How often do sales tax rates change?

Sales tax rates can change frequently due to new legislation or local tax adjustments. Businesses should stay informed through state and local tax authorities.

🔍 Where can I find more information on sales tax?

For detailed information on sales tax rates and regulations, consult your state’s department of revenue or taxation. They provide resources and assistance for businesses.

⚖️ Recent Court Cases Related to Sales Tax

Several recent court rulings have impacted sales tax regulations, highlighting the evolving nature of tax law in the United States. These rulings can influence how sales tax is applied and enforced.

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

End of October 2026 Update





What to Know About US Sales Tax


Sales tax is a tax charged on the sale of goods and services. Different regions have different sales tax rates, and it's a critical aspect of any retail business that should never be underestimated. The United States first introduced sales tax to fund the Civil War, but now it's a critical source of revenue for both the federal and state governments. For any business owner, understanding the nuances of sales tax is paramount to ensuring compliance and avoiding penalties.

Rates and Jurisdictions


Sales tax rates vary from state to state, ranging from 0% to more than 10%. Across the United States, there are upwards of 10,000 different sales tax jurisdictions, including state, county, city, and municipal levels. Each of these jurisdictions has unique tax rates and rules, which means that businesses must navigate an intricate web of regulations to comply.

In some states, the tax rates are uniform, meaning that the same rate applies across the state. Examples of such states are Michigan, Rhode Island, and Louisiana. In addition, a few states have no sales tax at all. These states include Alaska, Oregon, New Hampshire, Montana, and Delaware.

Most states use origin-based or destination-based sales tax sourcing to determine which rate to apply to a transaction. Origin-based sourcing means that the location where the product or service is sold from determines the tax rate. Destination-based sourcing means that the location where the product or service is delivered to is what determines the tax rate. The specific rules and regulations governing sales tax rates and sourcing vary by state and jurisdiction.

Nexus and Economic Nexus


In the United States, a business must have ""nexus"" in a state to be required to collect sales tax. Nexus is the legal connection between a business and a state that creates a sufficient connection for the state to require the business to collect sales tax. If a business has nexus in a state, they are required to collect state and local sales tax from customers in that state.

The concept of ""economic nexus"" has been introduced in the last few years. Economic nexus means that a business can be required to collect sales tax in a state simply by having a certain amount of sales within the state's borders. This has become much more common as states look for new sources of revenue.

The Wayfair Decision


The Wayfair decision was a landmark case that has fundamentally changed the sales tax landscape. Prior to this Supreme Court decision in 2018, states could only require businesses to collect sales tax if they had a physical presence in the state. This physical presence requirement had been established by the Supreme Court in previous cases.

In Wayfair, the Supreme Court ruled that a business could be required to collect sales tax in a state even if they didn't have a physical presence in the state. This ruling was based on the fact that the internet has made it much easier for businesses to sell products and services into other states, creating an unfair advantage for out-of-state businesses that didn't collect sales tax.

Since the Wayfair decision, many states have introduced economic nexus laws that are based on the amount of sales a business has in a state. As a result, many more businesses are now required to collect sales tax in a larger number of states.

Exemptions and Exclusions


Not all transactions are subject to sales tax. Some items, like food, prescription drugs, and medical devices, are often exempt from sales tax. Similarly, some types of transactions, like services and intangible goods, are excluded from sales tax altogether.

Different states have different rules regarding what is exempt and excluded from sales tax, so it's important to check a state's specific regulations to understand any exemptions and exclusions that may apply.

Sales Tax Compliance


Sales tax compliance can be quite complex for businesses. In addition to understanding the various rates and regulations governing sales tax, businesses must also register with each state where they have nexus, collect and remit sales tax, file returns and pay any sales tax due.

There are several software solutions available to help businesses manage sales tax compliance, which can automate many of the functions involved in collecting and remitting sales tax. These solutions can greatly simplify the sales tax compliance process, but it's important to carefully evaluate any software to ensure that it meets the specific needs of your business.

The Consequences of Non-Compliance


The consequences of non-compliance with sales tax regulations can be severe. Businesses that fail to collect and remit sales tax can face significant fines and penalties. In addition, states may seek to recover any unpaid sales tax, and may even pursue legal action against the business.

Many states have established voluntary disclosure programs that allow businesses to come forward and correct any past sales tax non-compliance without facing penalties. These programs can be a good option for businesses that have made errors in sales tax collection or that have become aware of non-compliance issues.

Conclusion


Sales tax compliance is a critical aspect of retail business operation in the United States. While it can be complex and difficult to navigate, with the rise of economic nexus, it's more important than ever to properly comply to avoid fines, penalties, and legal action. Understanding the nuances of sales tax rates, nexus, exemptions, and exclusions can accommodate retailers to avoid the harsh consequences of non-compliance and establish a successful business strategy.

In the United States, sales taxes are imposed at the point of purchase, as a percentage of the purchase price. For example, an item that cost ten dollars may be taxed at a rate of 6 percent, or sixty cents. Those making purchases are aware ahead of time, what the tax burden will be, as the percentage of tax imposed is the same, regardless of the price of the item.

While sales tax are imposed as a percentage of the purchase price, some items are tax exempt. In many tax jurisdictions, necessities, such as certain foods, are exempt from the sales tax.

In most states, the sales tax is collected by they seller, who then forwards the tax monies to the government. However, there are some exceptions. For example, the buyer is responsible for an additional sales tax which applies to good purchased outside of the tax jurisdiction, but then used in their tax jurisdiction. For example, an individual that purchases clothes from one state, to be used on their state of residence, is responsible for an additional tax on those items, to be paid at the end of the year in most jurisdictions.

Sales taxes are levied on most goods and services in the United Sates, depending on the jurisdiction. In addition, the percentage of sales tax levied in each jurisdiction varies. Sales taxes do not take the income of an individual into consideration and they are considered a regressive tax, because those with a lower income payer a higher amount, when taken as a percentage of their salary.