Sales & Use Tax Rate Changes effective October 1, 2019

Many sales and use tax rate changes are effective the third quarter of 2019 throughout the U.S. Read on to see what is changed.
ALABAMA Rate Changes

The City of Northport, in Tuscaloosa County, has increased their general sales tax rate to 3.0%.

The County of Tallapoosa has adopted a Resolution to extend their existing 2% education tax on sales.

The City of Chelsea, in Shelby County, has increased their general sales tax rate to 5%.

The City of Tuscaloosa, in Tuscaloosa county, has increased their general sales tax rate to 3%.

  • If sales of tangible personal property are made or delivered, or if purchases of tangible personal property are stored, used or consumed, outside the corporate limits of the city but within the police jurisdiction of the city, the rates of tax are one-half of those stated above.
ALASKA Rate Changes

The State of Alaska does not levy a state sales tax; there are, however, several municipal governments that do.  Here are the changes effective October 1st.

The cities of:

  1. Seldovia – 2.5%
  2. Ditka – 5.0%
  3. Dyea – 3.0%
  4. Skagway – 3.0%
  5. Whittier – 0.0%
ARKANSAS Rate Changes

Cross County has increased the general sales tax rate to 3.0% while the City of Van Buren, in Crawford county, has decreased the general sales tax rate to 1.5%.

ARIZONA Rate Changes

The City of Payson, in Gila County, has a new general retail TPT rate of 3.0%

The City of South Tuscon, in Pima County, has increased to 5.0%.

 

New TPT law for remote sellers and marketplace facilitators starting October 1, 2019

On May 31, 2019, Arizona Governor Doug Ducey signed into law, legislation requiring remote sellers and marketplace facilitators that have not been collecting transaction privilege tax (TPT) under current state law to begin filing and paying TPT in Arizona starting October 1, 2019.

Remote Sellers
Under the new Arizona law, a threshold has been established for remote sellers to pay TPT if their annual gross retail sales or income from online sales into Arizona is more than $200,000 in 2019, $150,000 in 2020 and $100,000 in 2021 and thereafter.

Marketplace Facilitators
Starting October 1, 2019, marketplace facilitators will be required to collect and remit TPT on taxable sales in Arizona made through its platform on its behalf or for at least one remote marketplace seller if gross retail proceeds or income for that marketplace facilitator exceeds $100,000 annually.

 

GEORGIA Rate Changes

Johnson County sales tax rate is now 3.0%.

 

KANSAS Rate Changes

The following city tax changes are effective October 1:

  1. Louisburg – 1.5%
  2. Neodesha – 2.0%
  3. Ness City – 2.0%
  4. Winfield – 2.0%

 

LOUISIANA Rate Changes

The rate for Abbeville in now 2.25%.

 

MINNESOTA Rate Changes

The following cities have implemented a new or changed Sales and Use tax rate effectie October 1st.  These sales tax rates apply to retail sales made into the City. The use tax rates apply to taxable items used in the City if the local sales tax was not paid.

  • The city of Rogers will have a 0.25% sales and use tax.
  • The following cities will have a .50% sales and use tax.
    • Avon
    • Blue Earth
    • Cambridge
    • Detroit Lakes
    • Elk River
    • Excelsior
    • Willmar
  • International Falls will have a 1.0% sales and use tax.
  • Two Harbors is increasing to 1.0 percent.
  • Duluth is increasing to 1.5%.

The following counties have implemented a new or changed Sales and Use tax rate effectie October 1st.  These sales tax rates apply to retail sales made into the County. The use tax rates apply to taxable items used in the County if the local sales tax was not paid.

  • The following counties now have a .50% sales and use tax.
    • Benton county
    • Isanti county
MISSOURI Rate Changes

The following counties have changes in the Sales and Use tax rates.

  1. Cass – 1.625%
  2. Gentry – 1.50%
  3. Johnson – 2.75%
  4. Lawrence – 2.125%
  5. Lincoln – 2.75%
  6. Ripley – 1.0%
  7. Shannon – 1.5%
  8. Worth 2.375%

The following cities have changes in the Sale and/or Use tax rates.

Sales Tax Change only:

  1. Centerview – 1.0%
  2. Verona – 2.0%
  3. North Libourn – .75%
  4. Billings – 1.0%
  5. Coney Island – 1.0%
  6. Desloge – 3.0%
  7. De Soto – 1.0%
  8. Humansivlle – 2.375%
  9. Jamestown – 1.0%
  10. Owensville – 3.0%
  11. Pacific – 3.0%
  12. Parkville – 2.0%

Use Tax Change only:

  1. Bernie – 2.0%
  2. Macon – 2.25%
  3. Williamsville – 1.5%

Sales and Use Tax change:

  1. Edina – 1.5%
  2. Houston – 2.5%
  3. Lockwood – 2.0%
  4. Walnut Grove – 2.0%

 

NEBRASKA Rate Changes

  • The City of Lincoln will increase its local sales and use tax rate to 1.75%
  • The Village of Orchard will start a local sales and use tax at the rate of 1.5%.

 

OHIO Rate Changes

  • The Allen County sales and use tax rate will increase from 6.75% to 6.85%.
  • The Clinton County sales and use tax rate will increase from 6.75% to 7.25%.
  • The Crawford County sales and use tax rate will increase from 6.75% to 7.25%.

 

OKLAHOMA Rate Changes

Three cities have a new sales and/or use tax rate effective October 1st.

  1. Cedar Valley – New Use tax rate of .25%
  2. Stonewall – New Use tax rate of 4%
  3. Tribbey – New Sales and Use tax rate of 2%

Four Cities have changes in their sales tax rates.

  1. Afton increased from 3% to 3.5%
  2. Cherokee increased from 3% to 3.25%
  3. Dewey increased from 3% to 3.4%
  4. Tahlequah decereased from 3.25% to 2.75%

 

TEXAS Rate Changes

The following cities have imposed or increased the additional city sales and use tax.

  1. Blanket – 2.0%
  2. Cross Timber – 2.0%
  3. Kosse – 2.0%
  4. League City – 2.0%
  5. Murphy will now be 1.75%; but the new Murphy Municipal Division will add .25%
  6. Post Oak Bend – 2.0%
  7. Sudan – 2.0%
  8. Three Rivers – 1.5%

The following special districts have changed which affects the total City rate.

  1. Elsa – Changed the boundaries for the Elsa Municipal Development District
  2. Grapeland – The Grapeland Municipal Development District includes the city of Grapeland.
  3. Hawley – Ended the Municipal Street Maintenance and Repair
  4. Yorktown – Ended Municipal Street Maintenance and Repair

Remote sellers are required to begin sales and use tax collections on Oct. 1, 2019.

Remote sellers should:

 

UTAH Rate Changes

Washington County has imposed a new Transportation Infrastructure rate of .25%

 

WYOMING Rate Changes

Carbon County has imposed a new Specific Purpose county rate of 1%.

 


Remote Sellers:  Confused about when and where to collect sales tax?  See our helpful chart for an overview.

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Which states are the most business friendly?

America is a competitive place and states battle to be the best at whatever they can. Who has the best schools, the best food, the friendliest people, etc.? As a business owner, you definitely need to know which are the most business friendly.

Like any ranking, this is a matter of opinion and you can spend all day arguing over which state is truly number one. When you dig into the data though, some states have clear advantages over others in terms of taxes and economic strength.Tax Foundation

State corporate tax

A good place to start comparing states is the corporate income tax rate. The less your business owes in state corporate taxes, the better your bottom line so of course we want to keep this low.

South Dakota, Nevada and Wyoming don’t charge a corporate tax, so you can’t do any better than that. Colorado, Georgia, Kentucky, Michigan, North Dakota, Oklahoma, South Carolina, Utah and Virginia also are decent as they cap corporate taxes at 6% or less.

State income tax

State income taxes are another cost of doing business and in a perfect world would be as low as possible. The good news is several states waive this tax altogether to create a more business friendly environment.

If you’re operating out of Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, you won’t have to pay any state taxes when you draw income out of your business. In terms of taxes, South Dakota, Nevada, and Wyoming start to look pretty appealing because business owners in these states avoid both corporate and individual income taxes.

Sales tax

Sales taxes are a difficult challenge business owners have to deal with. But wait, don’t your customers pay this? That would be mostly right. Your business won’t pay sales taxes out of its profits if you are collecting them correctly at the point of sale. However, your business is responsible for determining the following:

  • IF you are required to collect tax (your business has nexus, or a physical presence, within that jurisdiction);
  • WHICH items are taxable and at WHAT rate (some items and services are tax exempt, others are taxed at a rate different than general rates);
  • HOW MUCH to collect (does the state use origin or destination sourcing, what is the current rate for each jurisdiction);
  • WHERE to send the money (some states have you send it to a single office, others have you make payment to individual municipalities); and
  • and HOW OFTEN you have to do this (this could be annual, quarterly, or monthly depending on the state and the size of your business)?

Collecting sales taxes adds to your item’s total price, so it is in your best interest to keep that amount as low as possible to give you a competitive advantage.  (At least for now. The Marketplace Fairness Act could soon make this a thing of the past.)

Delaware, Montana, New Hampshire and Oregon don’t charge sales taxes. Alaska, Hawaii*, Maine, and Virginia are also competitive by keeping state and local sales taxes to 5% or less.

Use tax

Use tax is a little different than sales tax. This is your responsibility. You owe your state use tax anytime your business makes a taxable purchase but your supplier didn’t charge you sales tax, or the difference between the two amounts if your state’s use tax rate is higher than what your supplier charged you.) Technically, you could be due a tax refund if your supplier charged you a higher sales tax rate inappropriately, but the burden of proof would fall upon you.

In AlabamaArizonaColoradoMissouri and Oklahoma the use tax differs from the general sales tax rate (normally, it is lower). MontanaNew Hampshire and Oregon have no use tax. IllinoisIowaNew MexicoVermont and Wisconsin have a statewide use tax, but no local use tax.

Unemployment

While avoiding taxes is nice, for your business to succeed you also need a thriving economy with buyers looking for your product. The American economy is still struggling as a whole which makes it tough to open a business. However, some states are definitely doing better than others.

North Dakota, South Dakota, Nebraska, Vermont, Iowa, Utah and Wyoming all have an unemployment rate of 4.6% or less. If you’re in one of these states, you’d never know the country’s in an economic downturn.

Of course, these states have relatively small economic volume and may be better suited to specific industries. As far as high volume economies go, Virginia, Texas and Massachusetts are outperforming others as these states have unemployment below 6.6%. Not great, but definitely better than other parts of the country.

States with high unemployment rates may offer temporary tax benefits designed to bring in new businesses. It’s always worth a phone call to the economic development office to see what they have to offer.

The bottom line

So how does this all add up?

Based just on these factors, Wyoming, South Dakota and Alaska take the lead as they are strong in all four categories; they combine low taxes with sound economies. The remoteness of these states might be a strike against them however.

For the bigger players; Texas, hands down, looks very business friendly, even with its exceptionally complicated tax jurisdictions. Nevada, Florida and Washington have encouraging tax laws but high unemployment, whereas Virginia and Massachusetts have better economies but higher taxes.

If you are searching for a home for your business be sure to keep these states in mind as they are the leaders in accommodating businesses.

*Technically, Hawaii has an excise tax rather than sales tax.