Sales Tax Rate Changes Reflects Rising Complexity

Our latest End-of-Year Tax Rate Report reflects both encouraging and complex news regarding sales tax changes in 2018.

On a positive note, the 619 standard sales tax rate changes that occurred in 2018 represent a decrease from the whopping 721 standard sales tax rate changes in 2017. However, it is important to keep in mind that the high volume of 2017 changes reflected a major increase over the 558 sales tax rate changes that occurred in 2016. In other words, tax professionals continue to manage a historically high number of rate changes (well above the 10-year average) while addressing a plethora of new reporting requirements following the South Dakota v. Wayfair decision.

“The U.S. indirect tax landscape continues to become even more complex,” notes Vertex Vice President of Tax Research, Bernadette Pinamont. “The burden of compliance has intensified as states started establishing post-Wayfair economic nexus thresholds, as well as initiating separate returns for out-of-state retailers.”

Here’s a quick rundown of some key figures from our comprehensive report:

• 619: Number of standard sales tax rate changes in 2018.
• 5,886: Number of standard new and changed sales tax rates in past 10 years, an average of 588 per year.
• 4: Number of standard state sales tax changes that took place in 2018. New Jersey and Louisiana decreased their rates while the District of Columbia and Guam saw an increase.
• 10.0646 percent: The combined national sales tax rates average in 2018 (a slight increase compared a 10.0001 percent national average the previous year).

If you’d like more information – such as which state and cities had the highest sales tax rates last year – please contact me for the complete 2018 report: tricia.schafer-petrecz@vertexinc.com.