Transaction action
Utah will become the latest state to remove the transaction threshold for economic nexus, effective July 1. The state’s S.B. 47, signed on March 25, repeals Utah’s mandate that a seller must pay or collect and remit sales and use tax if sales of tangible personal property, electronically transferred products or services exceed 200 separate transactions. The requirement will be only gross revenue from sales in to Utah exceeding $100,000.
More than a dozen states have eliminated their transaction thresholds, most recently Indiana and South Dakota. Many states and the District of Columbia and Puerto Rico maintain their economic nexus thresholds based on dollar amount or quantity of sales over a prior period.
Battle of the taxes
A Florida lawmaker wants a $5 billion cut in the state’s sales taxes. Governor Ron DeSantis instead proposes a $1,000 tax break for homestead property owners, having argued that his tax break benefits Florida residents, but sales tax cuts also benefit tourists.
The deadline for a deal is May 2 to prevent a special session. Tallahassee House Speaker Daniel Perez said he’ll still advance cutting Florida’s sales tax from 6% to 5.25% as part of the House’s spending plan (the measure isn’t part of the Senate’s). Observers have said that cutting taxes too far would hamper Florida’s ability to respond to an economic downturn.
The up and up
Los Angeles County now has a higher sales tax as an anti-homelessness funding measure that voters greenlighted in November takes effect. The cities of
Lancaster and Palmdale added their own 0.75% tax on top of the countywide increase and now have a 11.25% sales tax, the largest hike in the area. Compton, Lynwood and South Gate saw their rates rise to 10.75%.
Exempt from sales tax in California are sales of certain food products for human consumption, such as groceries; sales to the U.S. government; sales of prescription medicine and certain medical devices; and sales of items paid for with Electronic Benefits Transfer cards.
Cap off
Pennsylvania has advanced a proposal to lift the cap on the sales and use tax vendor discounts that businesses can receive for timely collecting and remitting state sales tax. The legislation, which revives a pre-2016 break, has been approved by the state’s Senate Finance Committee and now moves to the Senate.
The vendor discount has been one percent of the amount collected, up to $300 per month, regardless of the size or scope of the business. The proposed measure is billed as helping offset the businesses’ cost of compliance, including transaction fees, bookkeeping and payment processing costs.
Grocery bill
Alabama looks to join the growing ranks of states to whittle sales taxes on groceries: A measure to cut the grocery tax from 3% to 2%, part of a larger tax-cut package, has passed the state House and now heads to the Alabama Senate for a committee vote.
Groceries, a rich source of tax revenue, incur either full or reduced sales tax rates in 10 of the states that have a statewide sales tax (or some variation of one): Alabama, Arkansas, Hawaii, Idaho, Illinois, Mississippi, Missouri, Tennessee, South Dakota and Utah. Kansas and Oklahoma are among the latest states to eliminate their grocery tax.
Check out the CereTax Knowledge Base for the most up-to-date rate information.
