Key takeaways
- Washington State leads major US tax changes by expanding sales tax to advertising and retail services, with other states updating digital marketplace and local tax rules.
- Florida’s repeal of sales tax on commercial leases represents a major cost shift for businesses, while compliance checks remain essential for earlier occupancy.
- In Europe, France tightens import VAT compliance for non-EU sellers, and Latvia plans a temporary VAT cut on essential food items to address inflation pressures.
In short: The October 2025 VAT and sales tax updates cover the U.S. and Europe. Washington State expanded sales tax to advertising and retail services, and Florida repealed sales tax on commercial leases. Texas, Missouri and Alabama also made changes. In Europe, France ended VAT simplification for non-EU importers, and Latvia proposed a VAT cut on basic food.
Update: Latvia's parliament adopted a 12% VAT rate on bread, milk, fresh poultry and eggs on December 3, 2025, applying from July 1, 2026 to June 30, 2027.
October brought several key VAT and sales tax changes across the U.S. and Europe. Washington State expanded its tax base, and the EU opened new consultations on ViDA and e-commerce reforms. Here's what you need to know this month.
United States
How is Washington State expanding sales tax?
Washington State has widened its sales tax base to include digital and traditional advertising services from October 2025.
The move aims to capture revenue from a growing sector that was outside the state's tax scope. This includes online ad placement, influencer marketing, and digital campaign management.
Retail services are also now subject to sales tax. This is one of the biggest state-level tax expansions in recent years.
What are Missouri's Q4 sales and use tax updates?
The Missouri Department of Revenue has released its Q4 2025 list of local sales and use tax rate changes.
The updates adjust rates in many cities and counties, effective October 1, 2025. Businesses should review the new local rates to stay compliant.
Visit the Missouri Department of Revenue website for more information.
How is Texas taxing marketplace fees?
Texas has clarified that platforms like Poshmark and similar marketplaces must now collect sales tax on certain seller fees.
This change fits the state's wider marketplace facilitator rules. It ensures consistent tax treatment across digital sales channels.
Alabama: Which local tax rates did Vernon increase?
Effective October 1, 2025, the City of Vernon has raised several local sales and use tax rates:
- The general sales and use tax rate rose from 3% to 4%. The same rise applies to admissions to places of amusement and entertainment. It also covers food for human consumption sold through vending machines.
- The sales tax rate on farm machinery and equipment rose from 1.5% to 2%. This covers machines used in planting, cultivating, and harvesting farm products. It also covers machines, parts and attachments used to manufacture tangible personal property.
- The sales and use tax rate on automotive vehicles, truck trailers, semi-trailers, and house trailers rose from 1% to 2%. The use tax rate on agricultural and manufacturing machinery also rose from 1% to 2%.
Has Florida repealed sales tax on commercial real‐property leases?
Yes. Effective October 1, 2025, Florida has eliminated the state sales tax on commercial lease payments for real property under § 212.031 F.S. Any local discretionary sales surtax is also gone. This covers office space, retail units, warehouses and similar property.
The repeal excludes short-term residential rentals, parking spaces, boat slips, and aircraft hangars under § 212.03. For occupancy periods beginning October 1 or later, no sales tax is due. Earlier periods, or payments for earlier occupancy, remain taxable. Landlords and lessees should review lease agreements and payment schedules, and file required returns accordingly.
Europe
Is France ending VAT simplification for non-EU importers?
France has announced the end of VAT simplification rules for non-EU importers.
From now on, businesses outside the EU must register directly for French VAT when they sell goods imported into France. They can no longer rely on intermediaries.
This change could hit non-EU e-commerce sellers hard. It affects those using fulfillment centers or shipping directly to French customers.
Is Latvia cutting VAT on basic food items from July 2026?
Latvia's Finance Minister has announced plans for a temporary VAT cut on essential food items. The aim is to ease pressure on households facing persistent inflation. The proposal is part of the government's 2026 draft budget talks.
From 1 July 2026, the VAT rate on basic products such as bread, milk, eggs, and fresh poultry could be cut for one year. The government calls this a needed short-term step to soften rising food prices. Food prices were a key driver of Latvia's inflation in 2025.
What do these updates mean for businesses?
Most of these changes need action in your billing, rate tables or filings. The main steps are:
- Washington service providers: According to the Washington Department of Revenue, ESSB 5814 covers more than advertising. It also taxes IT services, custom website development, live presentations, temporary staffing, custom software, and investigation, security and armored car services. Some new exclusions and exemptions apply from July 1, 2026.
- Florida landlords: The Florida Department of Revenue's guidance says landlords must still file returns for the last taxable periods. Rent for periods up to September 2025 stays taxable, even if paid late. Tax collected on rent from October 2025 should be refunded to the tenant first, then claimed back on Form DR-26S.
- Sellers in Missouri and Alabama: Update local rates in your checkout or tax software for sales from October 1, 2025.
- Non-EU sellers into France: Review how you handle import VAT and whether you need your own French VAT registration.
Key dates
- October 1, 2025: Washington's tax on newly covered services, Florida's commercial rent repeal, and the Missouri and Vernon, Alabama rate changes took effect.
- July 1, 2026: New Washington exclusions and exemptions apply, and Latvia's 12% VAT rate on basic foods starts.
- June 30, 2027: Latvia's reduced rate on basic foods is due to end.
How Taxually handles this
Taxually is one platform for cross-border tax compliance: CrossTax for VAT registration and returns, LumaTax for US sales tax, EcoTax for EPR and OneTax for tax payments. It connects to Amazon, eBay, Shopify and Stripe, so you can sell in new markets without managing each tax authority yourself.
Related guides
Frequently asked questions
What are the main VAT and sales tax updates in October 2025?
There are several important changes this month in both the United States and Europe. Washington State expanded sales tax to advertising and retail services, Texas updated rules for marketplace fees, and Florida removed sales tax on commercial property leases. In Europe, France ended VAT simplification for non-EU importers and Latvia proposed a temporary VAT cut on essential food items.
Do non-EU sellers now need to register for French VAT?
Yes, non-EU businesses that import goods into France must now register directly for French VAT. Using intermediaries is no longer enough for VAT compliance. E-commerce sellers shipping to French customers should review their current setup to avoid compliance risks.
How do the latest US tax changes affect online businesses?
Marketplace platforms in Texas must collect sales tax on more seller fees, placing more responsibility on digital sellers. New local rate changes in Missouri and Alabama may also affect filing requirements. Businesses selling online should keep track of these updates to stay fully compliant.
Has Florida repealed sales tax on commercial rent?
Yes. From October 1, 2025, Florida no longer charges state sales tax or local surtax on rent for commercial real property. Rent for periods before that date remains taxable, even if it is paid later.
Which services are newly taxable in Washington State?
Since October 1, 2025, Washington taxes advertising, IT services, custom website development, live presentations, temporary staffing and custom software. Investigation, security and armored car services are also covered.
