Key takeaways
- Several U.S. states will implement local sales tax changes effective March 1, 2025, requiring updates to billing and POS systems.
- Alabama: The Town of Citronelle will stop taxing areas beyond city limits — ending police jurisdiction taxes.
- Louisiana: The City of Eros (Jackson Parish) will abolish its city tax, reducing the total rate to 9%.
- New York: Suffolk County increases its local sales and use tax rate from 4¼% to 4⅜%.
- Tennessee: Gallatin raises its local sales tax rate to 2.75%.
- Businesses should review rate tables and update accounting systems to stay compliant with the new rates.
In short: On March 1, 2025, local sales tax rates changed in four US states. Citronelle, Alabama, stopped taxing its former police jurisdiction. Eros, Louisiana, abolished its city tax, for a 9% total rate. Suffolk County, New York, rose to 4⅜%, and Gallatin, Tennessee, rose to 2.75%.
As of March 1, 2025, several state, county, municipal and district sales tax rates will change across the United States. If your business operates in these areas, note the updates so you stay compliant. Here is a summary of the key changes:
Alabama
- The Town of Citronelle has discontinued its police jurisdiction beyond the city's corporate limits.
- As a result, Citronelle taxes and fees will no longer apply in the former police jurisdiction area from March 1, 2025.
Louisiana
- The city tax in Eros (Jackson Parish) will be abolished.
- This change will result in a 9% total sales tax rate for transactions in Eros.
New York
- The local sales and use tax rate in Suffolk County will increase from 4¼% to 4⅜%.
Tennessee
- The City of Gallatin is raising its local sales tax rate to 2.75%.
Staying informed about sales tax updates helps your business stay compliant and avoid unexpected liabilities. If you operate in any of the affected areas, update your tax settings to match.
What does this mean for businesses?
The new rates apply to taxable sales made on or after March 1, 2025. If you collect sales tax in these areas, update your rate tables, invoicing and point-of-sale systems.
- New York: The combined state and local rate in Suffolk County rose from 8⅝% to 8¾%. Report Suffolk County sales at the new rate, as set out in the New York State notice.
- Tennessee: Gallatin's local rate applies to the first $1,600 of a single article's sales price, so the local tax cap on a single article is $44. Sellers located in Gallatin must collect at the new rate, according to the Tennessee Department of Revenue.
- Alabama and Louisiana: Remove Citronelle's taxes in its former police jurisdiction, and the Eros city tax, from your rate tables.
If you sell remotely into these states, first check whether you have a collection duty there. Our guide to economic nexus by state explains the thresholds.
How does Tennessee's single article rule work in Gallatin?
Tennessee charges local sales tax only on the first $1,600 of a single article's price. On the part between $1,600 and $3,200, a state single article tax of 2.75% applies instead.
The 7% state rate still applies to the full price. A single article is one item that is sold as a separate unit, such as a dining table. Gallatin's new 2.75% rate is also the highest local rate Tennessee allows.
For example, a store in Gallatin sells a dining table for $4,000:
- State tax: $4,000 × 7% = $280.
- Local tax: $1,600 × 2.75% = $44.
- State single article tax: $1,600 × 2.75% = $44, on the part from $1,600 to $3,200.
- Total tax: $368. The part of the price above $3,200 carries only the 7% state tax.
The Tennessee Department of Revenue explains the rule with a similar worked example.
Which rate applies to sales that straddle March 1 in New York?
As a rule, taxable sales in Suffolk County made on or after March 1, 2025 are taxed at the new 8¾% rate. New York's transitional rules in Tax Bulletin TB-ST-895 cover the main exceptions:
- Layaway sales: the old rate applies only if a written agreement was made at least four months before the increase, the goods were set aside, and the buyer paid at least 10% before the change. Otherwise, the rate in force at final payment and delivery applies.
- Utilities billed on meter readings: the old rate applies if more than half of the days in the billing period fall before the change.
- Hotel stays: daily rentals are taxed at the rate in force on the day of occupancy. For longer rentals, the part of the stay before the change keeps the old rate.
- Admissions: tickets sold and delivered before March 1 keep the old rate.
- Construction contracts: contractors with a lump-sum or unit-price contract signed before December 17, 2024 can claim a credit or refund of the extra ⅛%. This covers only materials used solely for that contract.
Report Suffolk County sales made from March 1 at the new rates. On the main return, the combined rate rises from 8⅝% to 8¾%. On Schedule B, Part 6, the local rate rises from 4¼% to 4⅜%.
How Taxually handles this
Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.
Related guides
Frequently asked questions
When do these tax changes take effect?
On March 1, 2025.
What’s changing in Alabama?
The Town of Citronelle will no longer apply taxes outside its corporate limits.
What’s the update for Louisiana?
The city tax in Eros (Jackson Parish) is being abolished, leading to a total 9% sales tax rate.
Which county is affected in New York?
Suffolk County, where the local sales and use tax rate increases to 4⅜%.
What’s changing in Tennessee?
The City of Gallatin raises its local sales tax rate to 2.75%.
What should businesses do?
Update all tax calculation systems, invoices, and POS tools before March 1 to ensure compliance.
What is the sales tax rate in Suffolk County, New York?
Since March 1, 2025, most taxable sales in Suffolk County are taxed at 8¾%, up from 8⅝%. The county's local share rose from 4¼% to 4⅜%.
What is the sales tax rate in Gallatin, Tennessee?
Most taxable sales in Gallatin carry the 7% state rate plus the 2.75% local rate, or 9.75% in total. The local rate applies only to the first $1,600 of a single article's price.
What is Tennessee's single article tax?
It is an extra 2.75% state tax on the part of a single item's price above $1,600, up to $3,200. Local sales tax does not apply to that part of the price.
