Every new year brings new changes to sales and use tax, and 2018 is no different.
State rate change
New Jersey decreased the state sales and use tax rate from 6.875 to 6.625 percent as of Jan. 1, 2018. The new rate applies to all taxable sales made on or after the first, as well as to tangible personal property and specified digital products sold on or before Dec. 31, 2017, but delivered on or after Jan. 1 — one of those quirks that complicates sales and use tax compliance.
Local rate changes
Local sales and use tax rate changes went into effect in approximately 20 states on Jan. 1, including:
- North Dakota
- South Dakota
- West Virginia
Product taxability changes
Product taxability changes can cause real headaches for retailers and confusion for customers. For example, there have been complaints that some retailers have been erroneously collecting Cook County’s short-lived tax on sweetened beverages, which was repealed as of Nov. 30, 2017. According to the Chicago Tribune, “Some of those complaining mistook sales tax for the repealed soda tax.”
Changes effective Jan. 1, 2018, include:
- A higher rate of tax for candy and soda in Arkansas
- A new exemption for products used to absorb menstrual flow in Florida, as well as a reduction in the tax on commercial rentals
- A tax on sales of bikes and vehicles in Oregon
- A tax on sugary drinks in San Francisco
- A tax on sweetened beverages in Seattle
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