Key takeaways
- Multiple U.S. state and local sales tax changes take effect on May 1, 2025, impacting Alabama, Alaska, and South Carolina.
- Alabama: The cities of Sheffield and Glencoe now fall under state tax collection via the Alabama Department of Revenue.
- Alaska: The City of Elim joins the Alaska Remote Seller Sales Tax Commission (ARSSTC), requiring remote sellers to collect a 3% local tax.
- South Carolina: Several counties introduce or expire local 1% project and transportation taxes.
- Businesses should update tax software and filings before June 20, 2025 to ensure full compliance.
In short: The May 2025 US sales tax updates took effect on May 1, 2025, in Alabama, Alaska and South Carolina. The Alabama Department of Revenue now collects taxes for Sheffield and Glencoe. Elim, Alaska, joined the ARSSTC with a 3% local tax. Several South Carolina counties added or ended 1% local taxes.
As of May 1, 2025, several new sales tax changes will go into effect across the United States. They affect businesses operating in or selling into Alabama, Alaska, and South Carolina. These changes include new tax jurisdictions, rate increases, and the end of certain local taxes.
Which new tax jurisdictions did Alabama add?
Alabama added two cities, Sheffield and Glencoe, to the Alabama Department of Revenue's tax collection and administration:
- City of Sheffield: Following Resolution No. 03172025, the state will begin collecting sales and use taxes for the city.
- City of Glencoe: Under Resolution No. 25-02, the state will collect sales, use, rental, and lodging taxes.
First tax filings for both cities will be due by June 20, 2025, covering the period ending May 31, 2025.
What changed in Alaska when Elim joined the remote seller tax commission?
The City of Elim joined the Alaska Remote Seller Sales Tax Commission (ARSSTC), so remote sellers must now collect its local tax. Alaska has no statewide sales tax, but local municipalities run their own tax systems. Elim is the latest to join the ARSSTC. As of May 1, 2025, remote sellers that meet nexus thresholds must collect a 3% local tax on sales delivered to Elim.
Which South Carolina county rates are changing or expiring?
Five South Carolina counties are changing their local taxes. These big local tax adjustments start on May 1, 2025:
- Georgetown County: New 1% Capital Projects tax. Total rates: 7% (general), 8% (accommodations).
- Horry County: The previous 1% Capital Projects tax will expire (effective April 30, 2025), and a new 1% Transportation tax will begin. Total rates: 8% (general), 9% (accommodations).
- Jasper County: New 1% Transportation tax. Total rates: 9% (general), 10% (accommodations).
- Sumter County: New 1% Capital Projects tax. Total rates: 8% (general), 9% (accommodations).
- Williamsburg County: The 1% Capital Projects tax will expire (effective April 30, 2025).
What do these changes mean for online sellers?
The impact depends on how you collect tax in each state. Here is what to check:
- Alabama: Remote sellers in the Simplified Sellers Use Tax (SSUT) program charge a flat 8% on all sales into Alabama. They do not need to track city changes like Sheffield and Glencoe. Out-of-state sellers must collect once their Alabama sales pass the $250,000 threshold. Sellers registered for regular sales tax must use the local rates.
- Alaska: Under the ARSSTC Uniform Code, remote sellers must collect once their statewide gross sales reach $100,000 in the current or previous calendar year. If you pass this, add Elim to your list of collecting jurisdictions.
- South Carolina: Update the rates for each affected county in your tax software. Use the delivery address to find the right county rate.
How do remote sellers register and file in Alaska?
Remote sellers register once with the ARSSTC and file one return for all member towns, including Elim. You must apply for registration within 30 calendar days of meeting the $100,000 threshold.
- Returns: due monthly, by the last day of the following month. Quarterly filing is possible with the Commission's approval.
- Marketplace sales: a marketplace facilitator counts as the remote seller for sales on its platform. It collects and remits the tax on those sales.
- Tax caps: some member towns cap the taxable amount of a single sale. Apply each town's own caps.
Example: a seller with $120,000 of Alaska sales in 2025 ships an order to Elim in June. It charges Elim's 3% local tax and reports the sale on its June return, due by July 31.
When must remote sellers collect South Carolina's local taxes?
Remote sellers must collect South Carolina state and local sales taxes once their gross revenue exceeds $100,000 in the previous or current calendar year. Collection starts on the first day of the second calendar month after that.
For example, a seller that passes $100,000 on March 15 starts collecting on May 1. Remote sellers report local taxes, such as the new Capital Projects and Transportation taxes, to the SC Department of Revenue. Its remote sellers page links to the local rate list and tax map.
Key dates
- April 30, 2025: Capital Projects taxes in Horry and Williamsburg counties expire.
- May 1, 2025: New local taxes start in Alabama, Alaska and South Carolina.
- May 31, 2025: End of the first filing period for Sheffield and Glencoe.
- June 20, 2025: First returns due for Sheffield and Glencoe.
Do you need help with your sales tax compliance? Book a free call with one of our sales tax experts to find bespoke solutions for your business, optimize your tax costs, and reach millions of new potential customers.
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.
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Frequently asked questions
Which states are affected by the May 2025 changes?
Alabama, Alaska, and South Carolina.
What’s changing in Alabama?
The cities of Sheffield and Glencoe are now administered directly by the Alabama Department of Revenue.
When are the first filings due?
By June 20, 2025, covering the period ending May 31, 2025.
What’s new in Alaska?
The City of Elim joined the ARSSTC, requiring remote sellers to collect a 3% local tax.
What changes occur in South Carolina?
Several counties are adding or ending 1% Capital Projects or Transportation taxes, adjusting local sales tax rates.
Do remote sellers in Alabama need to track city tax changes?
Not if they use Alabama’s Simplified Sellers Use Tax program. It applies a flat 8% to all sales into Alabama, whatever the local jurisdiction.
How can businesses stay compliant?
Regularly update sales tax systems, confirm local rate changes, and verify filing deadlines with each state’s Department of Revenue.
When must remote sellers start collecting sales tax in South Carolina?
From the first day of the second calendar month after their gross revenue passes $100,000 in the current or previous calendar year. They must collect both state and local taxes.
How often do remote sellers file ARSSTC returns in Alaska?
Monthly, by the last day of the following month. Sellers can apply to the Commission for quarterly filing.
