Summer Sees Surge of Sales Tax Rate Changes

There were 398 sales tax rate changes in the first six months of 2017 across the U.S., an increase of 30.49 percent from the 305 changes that occurred in the first six months of 2016. That’s according to the annual mid-year tax rate study issued by Vertex Inc., a tax technology provider.

The Vertex 2017 Mid-Year Sales Tax Rate Report lists two state sales tax changes during the first half of 2017:

Effective January 1, 2017, California decreased their rate from 6.25 percent to 6.00 percent. However, this does not change the combined tax rates as the .25 reduction from the state was added to all counties.
Effective January 1, 2017, New Jersey decreased their rate from 7.00 percent to 6.875 percent.

“Additionally, the combined national sales tax rates average increased slightly to 9.9778 percent, up from 9.9447 percent in 2016,” said Vertex Chief Tax Officer Peggi Rockefeller. “Although there was a significant increase in sales tax rate changes from the same time last year, the states and cities with the highest sales tax rates remained the same as in 2016,” added Rockefeller.

Puerto Rico currently has the highest state sales tax rate at 10.50 percent. The Value Added Tax legislation has officially been repealed and Puerto Rico will continue with the currently imposed Sales and Use Tax Imposition.
Indiana, Mississippi, Rhode Island and Tennessee have the second highest state sales tax rate at 7.00 percent.
Kodiak, Nome and Wrangell, all in Alaska, and Winter Park, CO have the highest city sales tax rate at 7.00 percent. Hoonah, AK and Selawik, AK have the second highest rate of 6.50.
Tuba City (including the surrounding areas that are in the To’Nanees’Dizi Local Government), Coconino County, AZ has the highest combined sales tax rate of 12.90 percent.

The report highlights an ongoing sales tax trend of ever-changing and varying sales tax rates across jurisdictions. In the last 10 years in the U.S. there have been:

2,361 new sales and use taxes, an average of 224 per year;
4,209 sales and use tax changes, an average of 400 per year; and
6,570 new and changed sales and use tax rates, an average of 625 per year.

Since 1978, Vertex Inc., has been a leading provider of tax technology and services, enabling companies of all sizes to realize the full strategic potential of the tax function by automating and integrating tax processes, while leveraging advanced and predictive analytics of tax data. Vertex provides cloud-based, on-premise, and hosted solutions that can be tailored to specific industries for every major line of tax, including income, sales and consumer use, value added and payroll. Headquartered in Pennsylvania, Vertex is a privately held company that employs over 900 professionals and serves companies across the globe.

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