Key takeaways
- Estonia’s government announced a fiscal plan to tackle inflation through tax hikes.
- VAT and income tax will each rise by 2 percentage points to 24%.
- A temporary 2% corporate “defense tax” will apply from 2026 to 2028.
- Excise duties on alcohol, tobacco, and gasoline will increase by 5% annually.
- The removal of the income tax-free threshold (“tax hump”) is postponed to 2026.
- The measures aim to stabilize prices, increase revenue, and fund national defense.
Several states across the U.S. have implemented changes to their sales tax rates. These adjustments, effective July 1, 2024, will impact both consumers and businesses. Here's an overview of the recent changes:
Louisiana
Louisiana is making significant adjustments across various parishes:
- Iberia Parish: Sales tax rates will rise by 0.25% across all 10 jurisdictions. In the rural areas of Iberia Parish, the increase will be more substantial at 0.75%.
- Pointe Coupee, Richland, and West Baton Rouge Parishes: Each of these parishes will see a 0.25% increase in their district sales tax rates.
- Morehouse Parish: The town of Bonita will experience a 0.5% increase in its sales and use tax rate, while in Mer Rouge, the rate will decrease by 2%.
- Rapides Parish: The Town of Cheneyville will see a significant increase in its sales and use tax rate by 1.25%.
Minnesota
In Minnesota, Beltrami County will introduce a 0.625% sales and use tax starting July 1, 2024.
North Dakota
North Dakota will see changes in two cities:
- Mapleton: The city sales, use, and gross receipts tax will increase by 0.5%.
- Rolla: The tax rate will go up by 1%.
Ohio
Residents and businesses in Lake County, Ohio, will benefit from a tax reduction. The sales and use tax rate will decrease from 7.25% to 7.00%.
Oklahoma
Several municipalities in Oklahoma are adjusting their sales and use tax rates:
- Canton: A 1% increase.
- Inola: A 1.5% increase.
- Perkins: A 0.5% increase.
- Wynnewood: A 0.5% increase.
- Kiowa County: A 1.5% increase.
Texas
In Texas, the Aurora Municipal Development District will implement a new 0.5% local sales and use tax. Additionally, various combined areas will be established to manage the local sales and use tax between overlapping jurisdictions.
Washington
Washington state will see a minor adjustment with a 0.001% (one-tenth of a percent) increase in sales and use tax in Mason County, Pacific County, and the City of Snoqualmie.
West Virginia
In West Virginia, the municipalities of Richwood and Westover will impose a new 1% local sales and use tax, which will be added on top of the existing 6% state tax.
Other states
For detailed information about the changes in the following states, please visit their official websites:
- Arkansas: Detailed information about the local sales and use tax rate changes in Arkansas can be found here.
- California: The approved district sales and use tax changes in California are available here.
- Colorado: Information on the changes to state, city, municipal, and district sales and use tax rates in Colorado is listed here.
- Georgia: The county tax rate adjustments are detailed here.
- Illinois: Several jurisdictions in Illinois have modified their local sales tax rates. Details can be found here.
- Kansas: Kansas will see slight changes in its sales and use tax rates. For more details, visit here.
- Missouri: The city, county, and district sales and use tax changes in Missouri are listed here.
- New Mexico: Detailed information on municipal or county rate changes in New Mexico is available here.
- Wyoming: Information on the sales and use tax rate changes in several counties in Wyoming can be found here.
Frequently asked questions
Why is Estonia raising taxes?
The government plans to control inflation, boost fiscal revenue, and strengthen defense funding through tax increases.
Which taxes are being increased?
VAT and income tax will each rise by 2 percentage points to 24%, while excise duties on alcohol, tobacco, and gasoline will increase by 5% annually.
What is the new defense tax?
It is a temporary 2% corporate income tax introduced to support national defense, effective from early 2026 to the end of 2028.
When will the tax changes take effect?
VAT will increase in July 2025, income tax in early 2026, and the defense tax will apply from early 2026 through 2028.
What is the tax hump and what’s changing?
The tax hump refers to Estonia’s income tax-free threshold. Its removal, originally planned for 2025, has been postponed to 2026.
What is the main goal of these measures?
The overall goal is to stabilize inflation, ensure fiscal stability, and provide sustainable funding for defense and public services.
