July 1st Sales / Use Tax Rate Changes

The July 1, 2018 Sales / Use Tax Rate changes and updates are plentiful this month.  But first, there is this:

South Dakota v. Wayfair

After the U.S. Supreme Court handed down its decision in South Dakota v. Wayfair permitting states
to collect sales taxes on sellers with no physical presence in the state, states rushed to understand
what it meant for the tax base. Several states – Connecticut, Hawaii, Kentucky, and North Dakota
– already had some form of online sales tax legislation with an effective date of July 1, 2018.

Several of these states prepared their legislation with the Wayfair case pending and will likely need to make legislative tweaks and issue more guidance to retailers before they are ready to begin sales tax collections from out-of-state sellers.

Other July 1 changes in sales or use tax include:

Alabama changes

The City of Boaz, in both Etowah and Marshall counties, raised their general Sales and Use tax by 1%.

And the City of Henegar added a new Use tax of 4%.  If you are conducting business outside the corporate limits of the City of Henagar but within the police jurisdiction, the
Use tax rate is 2%.

Arkansas changes

The were changes in the Sales tax for the following:

  • Crossett (Ashley county) 1.25
  • Siloam Springs (Benton county) 1.375
  • Greenbriar (Faulkner county) 2.50
  • Maumelle (Pulaski county) 2.0
  • and the county of Jefferson, 1.25
California changes

There is a new reporting code 631 for Napa county.  Also, Saint Helena in Napa county, reporting code 632, increased the sales tax rate.

Our research team did some fine tuning of the tax tables for the unincorporated areas of Sacramento to reflect a 0% city rate.  Please make a note when dealing with ZIP codes in Sacramento – is the address in the city limits or the unincorporated boundaries?

Colorado changes

Changes in sales tax rates include the following Colorado cities:

  • Nederland (Boulder county) is now 4% and the use tax increased to 3%
  • Paonia (Delta county) is now 3%
  • Monument (El Paso county) has a new PIF of 2%
  • Ignacio (La Plata county) is now 3%
  • Craig (Moffat county) is now 4%

Information about changes to some Special District Tax exemptions can be found here.

Georgia changes

Our research team did some fine tuning of the tax tables for Dekalb and Fulton counties in Georgia when the ZIP is considered Atlanta.  For example, outside of Atlanta, a Dekalb county rate is 4%; but inside Atlanta, the Dekalb county rate is 3%.  And for Fulton county, the rate is 3.75% is outside Atlanta, but 3.0% if inside Atlanta.

Iowa changes

The following cities have added a 1% Local Option bringing the total sales tax rate including the State’s 6% to 7%.

  • Dallas Center
  • De Soto
  • Dexter
  • Granger
  • Linden
  • Minburn
  • Unincorporated areas of Dallas County
  • Van Meter
  • Waukee
  • Clive
  • Grimes
  • Urbandale
  • West Des Moines
Illinois changes

Illinois tops the list of most rate changes this month. For all the details, you can click this Illinois DOR Bulletin.  But here is a summary for you.

Cities reporting changes (all increases) are:

  • City of Canton in Fulton County increased by .50%
  • City of Bartlett in Cook / DuPage / Kane Counties increased by 1% in each location.
  • Carbon Cliff (Rock Island County) +.25%
  • Carol Stream (DuPage County) +.25%
  • Clay City (Clay County) +1.0%
  • Deer Park (Cook and Lake Counties) +.25%
  • East Peoria (Tazewell County)+.25%
  • Elgin (Cook and Kane Counties) +.25%
  • Findlay (Shelby County) +1.0%
  • Geneva (Kane County) +.50%
  • Glen Elllyn (DuPage County) +.25%
  • Hinckley (DeKalb County)
  • Kankakee (Kankakee County
  • LaSalle (LaSalle County)
  • Maple Park (DeKalb and Kane Counties) +1.0%
  • Naperville (DuPage and Will Counties) +.25%
  • Norridge (Cook County)
  • Northbrook (Cook and Lake Counties) +.25%
  • Northfield (Cook County) +.25%
  • Shabonna (DeKalb County)
  • Springfield (Sangamon County)
  • Waukegan (Lake County)
  • Washington (Tazewell County)

There are two county-wide changes in Illinois for Richland County and Woodford County.  Each increased 1.0% for the County School Tax.

Kansas changes

Cities reporting changes are Abilene; reducing their sales tax to .75%; Attica is increasing their rate to 2%; and Sylvia is implementing a first time sales tax rate of .5%..

  • Butler County, located just outside Wichita, is eliminating their 0.25% sales tax.  This affects thirteen cities, including El Dorado, Augusta, and Andover.
  • Marion County, another county bordering Wichita, is reducing their 1.5% sales tax to a flat one percent.  This will impact twelve cities, including Marion, Burns, and Lost Springs.
  • Neosho County is raising their sales tax from 1% to 1.75%.  This affects seven cities, including Chanute and St. Paul.
Louisiana changes

Remember that 1% Sales tax rate that was approved in 2016 and expiring on June 20, 2018?  The Louisiana House of Representatives voted 74-24 for a new sales tax rate of 4.45 percent after over a year of disagreement.  The new rate is effective July 1st and will stay in place until July 2025.

Cities sales tax rates changes include

  • Cottonport (Avoyelles Parish)
  • Haynesville (Claiborne Parish)
  • Simsboro (Lincoln Parish)
  • Lecompte (Rapides Parish)
  • Gramercy (Saint James Parish)
  • Lutcher (Saint James Parish)
Missouri changes

The following counties imposed a local option use tax at the same rate as the county’s sales tax.

  • New Madrid County Use tax will now be 1.5%
  • Texas County Use tax will now be 1.88%

Holt County has extended the existing .5% county capital improvements sales tax. This also applies to the county’s local use tax.

New Mexico changes

New Mexico does not have a sales tax. It has a gross receipts tax instead.  Nevertheless, the changes as of July 1st include:

  • Albuquerque (Bernalillo County)
  • Cimarron (Colfax County)
  • Corrales (Sandoval County)
Oklahoma changes

The Okmulgee county sales tax rate increased from 1.25% to 1.583%.

The following cities in OK have also have sales and/or use tax rate increases as of July 1st.

  • Wilson (Carter County) – increase to 4%
  • Loyal (Kingfisher County) – increase just the sales tax to 4%
  • Stonewall (Pontotoc County) – increase just the sales tax to 4%
  • Weatherford (Custer County) – increase to 4.5%
  • Boley (Okfuskee County) is now adding a USE tax of 5% where it had none before.
South Dakota changes

The cities of Roslyn and Rosholt have increased rates of 3% and 2% respectively.

Texas changes

Hickory Creek in Denton County reduced the sales & use tax for the Municipal Street Maintenance and Repair (SMR) from 2.0% to 1.75%.

Vermont Changes

The Killington local option sales tax rate of 1% that was effective as of October 2008, has been rescinded as to July 2, 1018 decreasing the total sales tax rate to 6%.

Washington State Changes

Effective July 1, 2018, the City of Grand Coulee will establish a Transportation Benefit District (TBD). Sales and use tax within the City of Grand Coulee will increase two-tenths of one percent (.002). The tax will be used for transportation services.  Click here for more information.
Businesses must collect the appropriate new rate of sales tax for retail sales and services provided within the City of Grand Coulee (1305). Persons or businesses within the City of Grand Coulee will be subject to the new tax rate for reporting use tax on items purchased for their personal or business use if sales tax has not been paid.

Effective July 1, 2018, local sales and use tax within the City of Olympia will increase one-tenth of one percent(.001). The tax will be used for housing and related services. For details can be found here.

West Virginia Changes

The State of WV Sales Tax rate is 6% – higher than most state rates.  But that is because there are relatively few local sales taxes.  In fact there are only 40 local tax rates out of a possible 230 municipalities…until now…there are 4 new local taxes that are adding 1% to the state rate effective July 1st.

  • Athens
  • Davis
  • Elizabeth
  • Elkins

According to the West Virginia State Tax Department, all vendors and sellers that do business in a municipality with local tax must collect and remit it in addition to the state sales tax.

Sales Tax is Hard!

Let us help make it a bit easier.  Have you checked out our Sales and Use Tax Rates By State page on our Web site?  Just click on a state in the map and find the basics: state rate, use tax rate, other oddities, and information such as is shipping is taxable, and a link to the state’s department of revenue (DOR).

We also have a page for taxes by Canadian Provinces.

This information is provided at no charge to get you started with the basics for each state.

Contact UsCall, chat, or email Teresa today for more information about our sales and use tax products!  See our product comparison chart.

Direct E-mail: TeresaF@Zip2Tax.com
Direct Phone : 1-866-492-8494

 

Sales tax change frequency by state

Zip2Tax compares the sales tax change frequency of the states. Ever wonder how your state measures up?

It’s generally accepted that there are around 11,000 sales tax jurisdictions across this great and diverse country of ours. This fact alone would seem to be a fairly reasonable argument for the outsourcing of sales and use tax rates from a company such as Zip2Tax. As the head of marketing for Zip2Tax I am always trying to understand our customer’s needs better. I found myself wondering about the sales tax change frequency for all these jurisdictions. I mean, 11,000 rows in a document might be manageable if they only changed their rates every few years or so, right?

So I sat down and with my trusty Excel spread sheet and a large cup of strong coffee and started going back through our research documentation counting the number of months that there had been any sales tax changes in each state. I wanted to determine which states had the highest sales tax change frequency. I sampled a three-year period from December 2015 going back through January 2013.

… fully one-third of the time that these states CAN make sales or use tax rate changes, they DO.

When the numbers were crunched I had some surprises in store, to be sure. For one, the states that provide Zip2Tax with the most new customers have no obvious correlation with which states had the highest sales tax change frequency. In fact, California and New York were only slightly above average.

The standout in this sample was Alabama which turned out to be far and away the leader with changes in 30 out of the 36 months – that’s 83% of the time. This also helped to dash my hopes of discovering a hotbed of customer need for our product since Alabama has so far not proven to be a great source of new business.
sales tax change frequency

Arizona came in second with 14 changes over that same period. Georgia, Louisiana, Oklahoma and Texas all tie for third place with 13 sales tax rate changes over 36 months. That translates to mean that fully one-third of the time that these states CAN make sales or use tax rate changes, they DO. Not to overstate the obvious, but that is more frequently than quarterly updates.

… more than two-thirds, updated that tax a minimum of once a year, and by the end of 3 years, 86% of the states had made changes…

In fact, 68% of the states that collect a sales tax, that’s more than two-thirds, updated that tax a minimum of once a year, and by the end of 3 years, 86% of the states had made changes.

So as I drained the last of my cold coffee I felt some gratification in that even though sales tax will remain an extremely complex moving target in nearly all 50 states, at least it should mean a steady supply of customers for sales tax rate providers like Zip2Tax for the foreseeable future.

Fill in the sign up form below this blog to receive our monthly newsletter and get alerted when one of these states makes a sales or use tax change or other important tax-related information.

 

Incorrect sales tax charge leads to seemingly avaricious lawsuit

$3.10 in incorrect sales tax leads to $158k in attorney’s fees

Retailers need to be careful when implementing any automated system for calculating sales tax. Even minor errors can lead to a lawsuit if a customer is charged the incorrect sales taxincorrect sales tax amount. Indeed, there are a number of class action law firms and “professional plaintiffs” who prey upon such mistakes. And even when the amount sought is just a few dollars, any judgment may be accompanied by a substantial bill to pay the successful plaintiff’s attorney fees.

A recent Illinois case illustrates this problem perfectly. The retailer in this case was Sears, one of the country’s best known department stores. The plaintiff was a customer who claimed he paid $3.10 too much in sales tax when he purchased a digital television converter box from Sears.

Converter boxes are a device used to allow older televisions to receive digital broadcast signals. In 2008 and 2009, the National Telecommunications and Information Administration, a federal agency, distributed $40 “coupons” to subsidize individual purchases of converter boxes. In July 2008, the Illinois Department of Revenue advised retailers in that state they should deduct the coupon before assessing sales tax. In other words, the sales tax only applied on the net price paid by the customer.

In this case, the plaintiff presented a NTIA coupon when he purchased his converted box at Sears, which reduced the net price paid from $59.99 to $19.99. The sales associate, however, added the sales tax to the higher price before applying the coupon. As a result, the plaintiff paid an incorrect sales tax of $4.65 when he only should have paid $1.55, a difference of $3.10.

A law firm later sued Sears, purportedly on behalf of the plaintiff and anyone else who was similarly overcharged. While the law firm eventually abandoned its quest for class action status, a judge agreed the plaintiff was entitled to $3.10 in damages because Sears violated the Illinois Consumer Fraud Act. The court rejected Sears’ argument that this was a case of predatory lawyers “shopping for a lawsuit,” even though the same plaintiff had reportedly filed “23 class action complaints in the past eight years, using the same attorneys that represent him in this action.”

The judge also awarded the plaintiff’s law firm approximately $158,000 in attorney’s fees. Sears appealed the decision. In December 2015, an Illinois appeals courtupheld the $3.10 judgment in favor of the plaintiff but threw out the award of attorney’s fees. It turned out the law firm did not submit proper billing records to the trial court. As the appeals court explained, the attorneys prepared written time sheets detailing their work, entered that information into a computer system, then threw the time slips out and only gave the printouts from the computer system to the court. The appeals court said the trial judge erred in admitting these printouts as evidence in lieu of the original time sheets. While the attorneys are still entitled to compensation, the appeals court said, the trial judge must reconsider the matter using only admissible evidence.

S.M. Oliva is a writer living in Charlottesville, Virginia. He edits the international legal blog PrivyCouncil.info

New Year’s sales tax updates effective January 1, 2016

Sales tax updates: 19 states have sales and use tax rates which have changed in Zip2Tax products since December 2015. 

There are sales tax updates in Alabama, Arkansas, Arizona, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Minnesota, Missouri, North Dakota, New Mexico, Nevada, Ohio, Oklahoma, South Dakota, Texas and Utah effective Jan. 1st.

In Alabama, tax rates changed for Rockford, Luverne and Waterloo.

In Arkansas, tax rates changed for Bald Knob, Brinkley, Gillham, Harrisburg, Viola and Crittenden County.

In Arizona, tax rates changed for Apache Junction, Phoenix and Prescott Valley.

In Colorado, tax rates changed for Bayfield, Bennett, Fraser, Lyons, Ouray, the Counties of Alamosa and Chaffee, Gunnison Valley RTA, Montezuma County Hospital District, Colorado Springs, Crested Butte and Greeley.

In Florida, tax rates changed for the Counties of Jackson, Walton, Hernando and Saint Johns.

In Georgia, tax rates changed for Hancock County.

In Illinois, tax rates changed for Morton Grove, Posen, Stickney, Bellwood, Bloomington, Herrin, Hopkins Park, Matteson, Shorewood and Cook County.

In Kansas, tax rates changed for Shawnee.

In Louisiana, tax rates changed for Folsom, Lake Charles and Merryville.

In Minnesota, tax rates changed for Rochester and the Counties of Otter Tail and Freeborn.

In Missouri, tax rates changed for Carthage, New Madrid County, Chillicothe, Holt County, Saline County and Aurora.

In North Dakota, tax rates changed for Alexander and Center.

In New Mexico, tax rates changed for Maxwell, Springer, De Baca County, Eddy County, Vaughn, Lincoln County, Mora County, Otero County, Jemez Springs, Farmington and Kirtland.

In Nevada, tax rates changed for Clark County.

In Ohio, tax rates changed for Portage County.

In Oklahoma, tax rates changed for Bartlesville, Gore, Hollis, Norman, Del City, Marshall County and Pittsburg County.

In South Dakota, tax rates changed for Astoria.

In Texas, tax rates changed for Corral City and Goliad.

In Utah, tax rates changed for Dutch John.

There were 13 states with ZIP code changes effective after December 2015 including California, Connecticut, Florida, Iowa, Indiana, Massachusetts, Michigan, Missouri, Montana, New Jersey, Oklahoma, Texas and West Virginia. A PDF document enumerating ZIP code additions and deletions can be made available upon request.

For December 2015 changes click here.  To see what States are the most guilty of constantly changing their tax rates visit this article.

Angel Downs, Zip2Tax's ead tax researcher

Angel Downs, Zip2Tax’s lead tax researcher

Exemption certificates need to be reviewed for validity

Exemption certificates

Do you know the validity period of your exemption certificates? Did you know that each state treats them differently and that you should review them periodically to make sure they are still good?

It is a good business practice to periodically review exemption certificates because quite a few states claim their exemption certificates are good until the business has a change, the business closes, or the certificate is revoked. You won’t know if these conditions are met unless you check with your customers and vendors regularly and request updated exemption certificates from them.

Some states have no stated expiration for their exemption certificates but they recommend regular or periodic updates. In these cases we listed the least amount of time between recommended updates. In cases where the state listed “good until the exemption no longer applies” we stated that there was no expiration date. Other states note that exemption certificates are good forever however “exempt status must be renewed”, or they “recommend” updates. In these cases we noted the recommended update or renewal timeframe.

Exemption Certificate Validity

State Abbrev. Validity Period
Alabama AL Till Changed Or Revoked
Alaska AK NA – No Certificates
Arizona AZ Date On Certificate
Arkansas AR NA – No Certificates
California CA Till Changed Or Revoked
Colorado CO No Expiration
Connecticut CT 3 Years
Delaware DE NA – No Certificates
District Of Columbia DC Till Changed Or Revoked
>Florida FL 5 Years
Georgia GA Till Changed Or Revoked
Hawaii HI Till Changed Or Revoked
Idaho ID No Expiration
Illinois IL 5 Years
Indiana IN No Expiration
Iowa IA 5 Years
Kansas KS Till Changed Or Revoked
Kentucky KY Till Changed Or Revoked
Louisiana LA 3 Years
Maine ME Till Changed Or Revoked
Maryland MD 5 Years
Massachusetts MA No Expiration
Michigan MI 4 Years
Minnesota MN 3 Years
Mississippi MS NA – No Certificates
Missouri MO 5 Years
Montana MT NA – No Certificates
Nebraska NE No Expiration
Nevada NV 5 Years
New Hampshire NH NA – No Certificates
New Jersey NJ 5 Years
New Mexico NM No Expiration
New York NY Till Changed Or Revoked
North Carolina NC No Expiration
North Dakota ND No Expiration
Ohio OH No Expiration
Oklahoma OK 3 Years
Oregon OR NA – No Certificates
Pennsylvania PA 3 Years
Rhode Island RI No Expiration
South Carolina SC Till Changed Or Revoked
South Dakota SD 1 Year
Tennessee TN Till Changed Or Revoked
Texas TX No Expiration
Utah UT 1 Year
Vermont VT No Expiration
Virginia VA Till Changed Or Revoked
Washington WA 1 Year
West Virginia WV 1 Year
Wisconsin WI 5 Years
Wyoming WY No Expiration
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