July 2019 Sales and Use Tax Changes

As usual, July 1st of each year brings many sales and/or use tax changes.  Here is our list:

 

ALABAMA

The Dallas County Commission has imposed an additional one-half percent sales tax for public
school purposes.

The City of Phenix City has increased their sales tax rate by .50% which will increase the total rate depending on if the sale is in Russell County (9.5%) or Lee County (12.0%).

 

ARIZONA

Flagstaff, in Coconino county has increased to 9.180%.  Benson Use tax is now 3.5%

 

ARKANSAS

The City of Hampton has a sales tax rate of .50% starting July 1, 2019.  There were also 6 annexation actions that affected rates for Centerton, Pea Ridge, Highfill, Lake City, Flippin, and East Camden.

 

CALIFORNIA

Rate increases include San Mateo County, the cities of Glendora, Belmont, Burlingham, East Palo Alto, Redwood City, San Mateo, and South San Francisco.

 

COLORADO

The city of Durango rate is increasing to 3.5%.  The Pueblo Use tax rate was corrected to 3.70%.  The Ute Pass Region Ambulance District special tax hike of 1/2 of a cent was added to: Westcreek, Platte Springs, Tarryall, Lake George, Divide, Florrissant, and Woodland.

 

GEORGIA

County-wide sales tax changes are occurring in Dougherty, Elbert, Limpkin, Morgan, Upson, Whitfield, and Worth counties.

 

IOWA

You will see a 1% increase in the following Iowa cities:  Alleman, Altoona, Des Moines, Pleasant Hill, West Des Moines, Windsor Heights.

 

ILLINOIS

County-wide changes are occurring in Bureau, Fayette, Franklin, Jasper, Menard, Sangamon, and Union counties.

Illinois cities that have new tax rates include, Princeton, Berwyn, Frankfort (in Cook and Will counties), Lemont (in Cook, Dupage and Will counties), Lincolnwood, Elburn, Lake Forest, Wood River, McHenry, Milan, and Dakota.

 

KANSAS

Changes are occurring in the cities of Benton, Waverly, Caney, Pretty Prairie, Grandview Plaza and the county of Reno.

 

LOUISIANA

You will see a rate change for Allen Parish.

 

MONTANA

Isanta county Montana has a new rate increase.

 

MISSOURI

There are several Use tax changes in the cities of Pleasant Valley, Malden, Albany, Urich, Windsor, Maryville, Northmoor, Velda Village Hills, Pine Lawn, and Hollister.

City tax changes include Georgetown, Green Ridge, Hughesville, La Monte, Sedalia, and Smithton.

 

NORTH DAKOTA

Changes are occurring in New Rockford and Larimore.

 

NEBRASKA

Changes are occurring in Saint Edward, Newahwka, Coleridge, and Wauntetta.

 

NEW MEXICO

One change for Maxell in Colfax county.

 

OHIO

A county-wide rate increase is occurring in Crawford.

 

OKLAHOMA

Cherokee Sales & Use tax increased the total to 9.%%.  County wide changes are occurring in Rogers and Texas counties.

 

TEXAS

City rate changes include Charlotte, Primera, Cresson, and Mount Enterprise.

 

UTAH

County-wide rate changes are occurring in Davis and Summit counties.  The city of Bluff rate is increasing.

 

VERMONT

You will see changes in the city rates of Winooski and Brattleboro.

 

WASHINGTON

The sales tax rate for the city of Aberdeen is changing.

 

WEST VIRGINIA

The city of Kingwood, WV will see a 7.0% total rate.


sales tax by zip code app banner from zip2tax

The Full Breakout sales tax and use tax tables provide all tax rates broken down for every jurisdictional level including ZIP code, state, country, city, and special districts; and includes jurisdictional codes where applicable.

The sales tax and use tax tables provide the Primary Rate, which is the location within a ZIP code containing the USPS Office, and indicates whether shipping is taxable.

 

School Cafe

Are College Meal Plans Taxable or Not?

Many colleges and universities require students living on-campus to purchase a meal plan. The school typically contracts with an outside company to provide the meals, which students then pay for using their meal plan. But are such transactions subject to sales tax?

The Colorado Supreme Court recently addressed this question.

The specific dispute before the Court involved the City of Golden, Colorado, and Sodexo America, a well-known food service company that provides contractual dining services to the Colorado School of Mines (CSM), which is based in Golden. The City levies a 3-percent sales tax. Following a 2014 audit, the City determined Sodexo was liable for approximately $234,000 in unpaid sales tax on the sales of meals to meal-plan students at CSM.

Sodexo challenged the City’s decision in court. Although a trial judge sided with the City, an intermediate appeals court ruled in Sodexo’s favor. The Colorado Supreme Court then agreed to review the matter.

Colorado Supreme Court: Campus Dining Plan Meals Not Subject to City’s Sales Tax

The Court ultimately agreed with Sodexo and the intermediate appeals court. Justice William W. Hood III, writing for the Court, said there were two types of transactions at issue here. The first was CSM’s sale of meal plans to the students. The second was Sodexo’s sale of meals to CSM. The latter sale, Hood said, was a wholesale transaction not subject to the City of Golden’s sales tax.

“Sodexo didn’t directly charge the meal-plan students,” Hood explained. Rather, CSM billed the students each semester for the cost of the meal plan. CSM, in turn, paid Sodexo a fixed amount monthly for each meal served. Sodexo therefore had no responsibility (or ability) to take action against a student who failed to pay CSM for his or her meal plan.

In other words, Hood said, there was never a taxable “sale” that took place between Sodexo and the meal-plan student. The sale occurred when the student purchased the meal plan, not when they swiped their card at the dining hall to use one of their allotted prepaid meals. The students “didn’t provide any consideration to Sodexo for the meals,” Hood said.

Ruling Does Not Affect Cash Sales

It is worth noting the Supreme Court’s ruling only covers students who purchase meals at a campus dining hall via a prepaid meal plan. It does not apply to a student, or anyone else, who purchases food or beverages from the same dining hall using cash or their own credit card. Indeed, even prior to this litigation, Sodexo collected and remitted sales taxes on cash and credit sales to the City.

Canada Considers “Netflix Tax” Again

streamingReport: Canadian Government Fails to Collect $169 Million in Sales Taxes Annually on Digital Goods & Services

Canada loses approximately $169 million annually in sales tax revenue, according to a recent report from the nation’s interim auditor general. These losses are the result of Canadians failing to pay taxes on digital purchases from foreign vendors. As a result, the auditor general’s office noted Canadians often pay more for domestic digital goods than their foreign counterparts.

Interim AG: Most Canadians Do Not Pay Their Own Sales Tax on Foreign Purchases

Interim Auditor General Sylvain Ricard submitted a series of five performance audits to the Parliament of Canada on May 7. One of these audits focused on the taxation of e-commerce. The audit noted the rapid rise of e-commerce, particularly with respect to “digital products” for music and video, creates “challenges for assessing” the federal goods and services tax (GST) and the harmonized sales tax (HST).

 

Domestic sellers of digital goods and services are required to collect GST and HST from individual consumers and remit those payments to the government. But foreign vendors with no “permanent establishment” in Canada are not required to make such collections under federal law. This does not mean that foreign sales are exempt from taxation. Rather, if an individual consumer’s total purchases of foreign digital goods results in a GST or HST tax liability of more than $2, it is that consumer’s responsibility to fill out a form and pay the applicable tax.

 

In practice, most Canadian consumers simply ignore this duty. According to Ricard, while approximately two-thirds of Canadian adults “purchased digital products from both foreign and domestic vendors between July 2017 and June 2018,” only 524 people filed GST or HST forms on those purchases. And the Canada Revenue Agency (CRA) only has “limited authority” to ensure compliance.

 

For instance, Ricard noted, while the United States government requires all payment processors to provide their financial data to the Internal Revenue Service, the CRA lacks a similar ability to collect such third-party information without first obtaining a court order. This, in turn, reduces the CRA’s ability to “detect and deter non-compliance.”

 

The costs of this non-compliance are not insignificant. Ricard’s office estimated the total GST losses for the 2017 fiscal year alone was $169 million. And given the increasing role of cross-border e-commerce in Canada’s economy, Ricard recommended the CRA “implement mechanisms to track, monitor, and report the number of compliance activities it conducts to manage the risk of non-compliance.”

Cross-Party Opposition to Any “Netflix Tax”

But it may not be that simple. Enforcing sales tax collection on foreign digital goods, especially popular U.S.-based services like Netflix, is unpopular with Canadian politicians. During the 2015 federal election, then-Prime Minister Stephen Harper released an ad saying his Conservative Party was “100 per cent against a Netflix tax,” according to a recent report in the Toronto Star. Harper’s rival, Liberal Party leader and current Prime Minister Justin Trudeau, also came out against efforts to require Netflix and other non-Canadian vendors to collect the GST and HST.

province flags

Some Canadian provinces, however, are taking a harder line. The auditor general’s report noted the British Columbia provincial government has independently “reached an agreement with a major foreign accommodation sharing platform” to “voluntarily collect the provincial sales tax (PST) and remit it directly to the government.” Meanwhile, the Quebec National Assembly has passed its own legislation requiring foreign businesses to “register for, collect, and remit sales taxes,” regardless of whether they have a “permanent establishment” in Quebec or Canada.

 

As federal law currently stands, according to Ricard, the CRA lacks the “legislative authority or flexibility” to follow either British Columbia or Quebec’s example. And with the next federal election expected later this year, there may be little incentive for any of the major political parties to pursue the issue in the short-term.


Looking for Canadian Sales Tax Rates for your business?  Zip2Tax has easy, fast downloadable tables.  Or look here for general tax rates by province.


 

June 1st Sales Tax Rate Changes

Few changes to the general sales tax rates for June, but stayed tuned for many more as of July 1st.

 

ALABAMA

The Town of Ranburne adopted an ordinate to increase the general sales tax rate from 1.5% to 2.0% effective with sales as of June 1, 2019.

The Dallas County Commission has repealed and rescinded the ordinances imposing an additional one-half percent sales tax for public school purposes.  The rate was 1.50% but as of June 1st sales, the new rate is 1.00%.

 

FLORIDA

The 2019 Disaster Preparedness Sales Tax Holiday begins Friday, May 31, 2019 and extends through Thursday, June 6, 2019.  Click here for more details from the State of Florida.

For a complete chart of upcoming sales holidays in all states, see our post.

 

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2019 Sales Tax Holidays

Every year various states offer sales tax holidays to encourage sales of specific items.  See our chart for this year’s participants.

The following states are not participating in sales tax holidays this year. Keep in mind that sales tax holiday participation is subject to change and we’ll update this as announcements are made public.

Arizona, California, Colorado, District of Columbia (Washington D.C), Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, and Wyoming.

 

STATEITEMS INCLUDED / MAXIMUM COSTMONTHDAYSLink to MORE DETAILS
AlabamaHurricane Preparedness
Generators - $1,000
Supplies - $60
February22-24AL DOR Sales Tax Holiday for Severe Weather Prepareness
AlabamaBack to School
Clothing - $100
Computers - $750
School Supplies - $50
Books - $30
July19-21AL DOR Tax Holiday for Back To School
ArkansasBack to School
Clothing - $100
School Supplies
August3 - 4Arkansas Tax Holiday for Back To School
ConnecticutBack to School
Clothing and Footwear - $100
August18 - 24Connecticut Department of Revenue
FloridaDisaster Preparedness
Generators - $750
Other Supplies - $50
May / JuneMay 31 - Jun 6Florida Disaster Preparedness Tax Holiday
FloridaBack to School
Clothing - $60
School Supplies - $50
August2 - 6http://floridarevenue.com/
IowaBack to School
Clothing - $100
August2 - 3Iowa Annual Sales Tax Holiday
LouisianaFirearms
Ammunition
Hunting Supplies
September6 - 8Louisiana Department of Revenue
MarylandEnergy Star ProductsFebruary16 - 18Maryland Department of Revenue
MarylandBack to School
Clothing and Footwear - $100
August11 - 17Maryland Department of Revenue
MassachusettsEnergy Efficiency Sales Tax HolidayAugust10 - 11
MississippiBack to School
Clothing and Footwear - $100
July26 - 27Mississippi Department of Revenue
MississippiFirearms
Ammunition
Hunting supplies
August / Sept30 - Sept 1Mississippi Department of Revenue
MissouriEnergy Star Products - $1,500April19 - 25Missouri Department of Revenue
MissouriBack to School
Clothing - $100
Computers - $1,500
School Supplies - $50
August2 - 4Missouri Department of Revenue
New MexicoBack to School
Clothing - $100
Computers - $1,000
Computer Equipment - $500
School Supplies - $30
August2 - 4New Mexico Department of Revenue
OhioBack to School
Clothing - $75
School Supplies - $20
August2 - 4https://www.tax.ohio.gov/
OklahomaBack to School
Clothing - $100
August2 - 4http://www.tax.ok.gov/
South CarolinaBack to School
Clothing
School Supplies
Computers
Other
August2 - 4South Carolina Department of Revenue
TennesseeBack to School
Clothing - $100
School Supplies - $100
Computers - $1,500
July27-29Tennessee Department of Revenue
TexasHurricane Preparedness
Generators - $3,000
Storm devices - $300
Preparedness items - $75
April27 - 29Texas Department of Revenue
TexasEnergy Star Products
Air conditioners - $6,000
Other - $2,000
May25 - 27Texas Department of Revenue
TexasBack to School
Clothing, backpacks and school supplies - $100
August9 - 11Texas Department of Revenue
VirginiaBack to School
Clothing - $100
School Supplies - $20
Energy Star Products - $2,500
Hurricane preparedness items - $60
Generators - $1,000
August3 - 5Virginia Department of Revenue
WisconsinBack to School
Clothing, Supplies - $75
Computer Supplies - $250
Computers - $750
August 1 - 5 https://www.revenue.wi.gov/
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