US Sales Tax Changes 2026: What's New for States and Sellers

In short: The main US sales tax changes for 2026 are cheaper groceries, wider tax on digital products and services, and simpler nexus tests. On January 1, 2026, Illinois and Arkansas stopped charging state sales tax on groceries, and Illinois dropped its 200-transaction threshold. Utah started taxing streaming and seller-hosted software on July 1, 2026. No state changed its general statewide rate in the first half of 2026, but many local rates rose.

Updated October 2026: We added changes already scheduled for 2027, how some grocery tax cuts link to income tax cuts, and a short answer on which states have the highest and lowest sales tax. The full state rate table lives in a separate guide.

Sales tax rules in the United States change every quarter. There is no national sales tax, so states and sales tax rules move separately. States adjust what they tax, how they define nexus and how local rates stack up. This page tracks the changes that matter most to online and cross-border sellers. Each change below has its effective date and an official source.

Looking for the current rate in every state instead? See our guide to the states with the highest and lowest sales tax rates. For earlier monthly round-ups, see May 2025 U.S. Sales Tax Updates and June 2025 U.S. Sales Tax Updates.

What are the biggest US sales tax changes in 2025 and 2026?

The biggest changes are grocery tax cuts, new taxes on digital products and services, and the end of transaction-count nexus tests in three places. The table lists the key state-level changes in date order.

Which states removed the 200-transaction economic nexus threshold?

Alaska's remote seller commission, Utah and Illinois all removed the 200-transaction test between 2025 and 2026. In each case, only the $100,000 sales test now decides whether a remote seller has economic nexus.

• Alaska (January 1, 2025): The Alaska Remote Seller Sales Tax Commission (ARSSTC) amended its uniform code to drop the transaction measure (ARSSTC code update). Alaska has no state sales tax, but many cities and boroughs do.
• Utah (July 1, 2025): S.B. 47 removed the 200-transaction test. Remote sellers now collect only if their Utah sales exceed $100,000 a year.
• Illinois (January 1, 2026): The 200-transaction test ended for both remote retailers and marketplace facilitators. Only the $100,000 gross receipts threshold now applies, according to the Illinois Department of Revenue.

This is good news for small sellers. A business that makes many low-value sales into a state no longer triggers nexus on order count alone. But the change does not remove any obligation for sellers already above $100,000. Check our state-by-state economic nexus guide for the current thresholds.

Illinois also tightened its record-keeping rules. From January 1, 2026, if a seller cannot show where a sale was delivered, the department can assess tax at 15% on that sale. Keep the customer name, the exact delivery address and proof of where goods shipped from.

What changed for marketplace facilitators?

The main change is that marketplace facilitators follow the same simpler nexus tests as other remote sellers. In Illinois, the removal of the 200-transaction test applies to marketplace facilitators as well as remote retailers.

For third-party sellers, the basic rule has not changed. When a marketplace such as Amazon or Etsy collects tax on your marketplace sales, you usually do not collect it again on those sales. You may still need to register and file if you also sell through your own website, or if you hold stock in a state.

The Streamlined Sales Tax Governing Board also has marketplace rules on its agenda. Its May 2026 meeting considered amendments on how marketplace facilitators handle other taxes and fees. Check the final text before changing your processes.

Which states started taxing digital products and services?

Louisiana, Maryland, Washington and Utah all widened their sales tax base to cover digital products or services in 2025 and 2026. Ohio also repealed several exemptions that touched advertising and electronic publishing.

• Louisiana (January 1, 2025): The 5% state rate now applies to digital products, such as e-books, audio, video, apps and games (Louisiana Department of Revenue).
• Maryland (July 1, 2025): A new 3% sales and use tax applies to certain data and IT services, and to system and application software publishing services (Comptroller of Maryland). Maryland's general 6% rate did not change.
• Washington (October 1, 2025): ESSB 5814 brought advertising, IT services, custom website development, custom software, live presentations, temporary staffing, and investigation and security services into retail sales tax (Washington Department of Revenue). New exemptions for schools, libraries and some live presentations started on July 1, 2026.
• Ohio (January 1, 2026): Ohio repealed 11 exemptions, including those for some advertising materials and electronic publishing (Tax Foundation).
• Utah (July 1, 2026): S.B. 162 taxes access to digital audio, video, books and games, including streaming-only subscriptions. It also taxes prewritten software that the seller hosts.

If you sell software, subscriptions or digital content, review these states first. Taxability now often depends on how the customer accesses the product, not just whether they download it.

Which states cut sales tax on groceries?

Five states cut or ended their state grocery tax in 2025 and 2026: Kansas, Mississippi, Alabama, Arkansas and Illinois. In most of them, local sales tax can still apply to food. For the full picture, see our state-by-state guide to sales tax on food.

Sources: Kansas Department of Revenue, Mississippi Department of Revenue, Alabama Department of Revenue and Tax Foundation. Illinois cities and counties could adopt their own 1% grocery tax from January 1, 2026. Always check the local rate at the delivery address.

Some grocery cuts came with income tax changes. Mississippi's 2025 House Bill 1, the Build Up Mississippi Act, cut the grocery rate to 5%. The same law lowers the individual income tax rate from 4% to 3.75% in 2027, with further steps after that (Thomson Reuters).

Did any state sales tax rates change in 2025 or 2026?

Only one state changed its general statewide rate: Louisiana. Its rate increased from 4.45% to 5% on January 1, 2025. No state changed its general rate in the first half of 2026, according to Tax Foundation's midyear 2026 data.

Washington, DC had planned to raise its rate to 7%. That increase has been postponed. The DC Office of Tax and Revenue says the general rate stays at 6% through September 30, 2027. Some rate trackers still show the old schedule, so check the official notice.

Nevada also made diapers for children and adults exempt from sales and use tax from January 1, 2025, after voters approved the change in 2024 (Nevada Department of Taxation).

Which local sales tax rates changed in 2026?

Many local rates changed in 2026, so combined state and local rates rose in several states even though state rates held steady. Local jurisdictions, such as cities, counties and special districts, can add their own rate in 38 states. Tax Foundation reports that average combined rates rose in North Carolina, Georgia, Washington, California and Vermont in the first half of 2026. Wyoming was the only state where the average combined rate fell.

• North Carolina: Mecklenburg County added a 1% local tax on July 1, 2026, which takes the combined rate to 8.25% (North Carolina Department of Revenue).
• Georgia: Many counties added a floating local option sales tax of up to one percentage point to fund property tax relief.
• Illinois: Many cities and counties brought in their own 1% grocery tax after the state tax ended.

Local rates change on January 1, April 1, July 1 and October 1 in many states. Use the exact delivery address, not a ZIP code or state average, when you calculate tax.

What is new in the Streamlined Sales Tax program?

The main Streamlined Sales Tax (SST) update is guidance on the end of the penny. The program has 23 full member states and one associate member, Tennessee.

In a statement dated March 27, 2026, the SST Governing Board said the way you calculate sales tax does not change (Streamlined Sales Tax). You still multiply the taxable price by the rate and round to the nearest cent. A retailer that cannot give exact change may round a cash total to the nearest nickel, but that does not change the tax due.

The board's May 2026 meeting also considered changes to the definition of sales price, digital goods rules, redemption codes and a new certified service provider contract for 2027 to 2029. Check the final adopted text on the SST website before you change your systems.

Which sales tax changes are already scheduled for 2027?

Three dates are already on the calendar for 2027. Check them before you plan next year's pricing and tax settings.

South Dakota cut its state rate from 4.5% to 4.2% on July 1, 2023. House Bill 1137 included a sunset clause that repeals the cut effective June 30, 2027, according to the South Dakota Department of Revenue. South Dakota is also the state whose economic nexus law the Supreme Court upheld in the 2018 Wayfair case, so many remote sellers already file there.

The Streamlined Sales Tax board is also working on a new certified service provider contract for 2027 to 2029. If you use a certified service provider, ask how the new contract affects you.

What should online sellers do about these changes?

Review your nexus, product taxability and rates in the states where you sell. These steps cover most of the 2025 and 2026 changes:

1. Recheck nexus on sales value. In Alaska, Utah and Illinois, only the $100,000 test now applies. Review your sales in each state over the last 12 months.
2. Update product tax codes. Check grocery items in Kansas, Mississippi, Alabama, Arkansas and Illinois. Check digital products and services in Louisiana, Maryland, Washington and Utah.
3. Use address-level rates. Local rates change every quarter. Make sure your tax engine updates automatically.
4. Reconcile marketplace sales. Separate sales where the marketplace collected tax from your own direct sales.
5. Keep delivery records. Illinois can assess 15% where you cannot prove the delivery location.

Selling into the US from abroad? Read our guide to US sales tax for foreign sellers. Taxually's LumaTax helps businesses register for, calculate and file US sales tax.

This page is general information, not tax or legal advice. Sales tax rules change often and depend on your facts, so speak to a qualified state and local tax adviser before you make registration decisions.

What state has the highest and lowest sales tax in 2026?

Louisiana has the highest average combined rate at 10.13%. Among states with a sales tax, Alaska has the lowest at 1.82%, from local taxes only. Both figures are from the Tax Foundation, as of July 1, 2026.

For state, local and combined rates in all 50 states and DC, see our full table of sales tax by state. For the states with no statewide sales tax, see the NOMAD states.

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.

Sources

• Illinois Department of Revenue – FY 2026-12, Destination-Based Retailers' Occupation Tax Changes
• Louisiana Department of Revenue – RIB 25-007, State Sales Tax Rate
• Washington Department of Revenue – Services newly subject to retail sales tax
• Comptroller of Maryland – Tax changes beginning July 1, 2025
• Utah Legislature – S.B. 162 (2026)
• DC Office of Tax and Revenue – Notice of Oct. 1, 2025, Tax Changes
• North Carolina Department of Revenue – Mecklenburg County additional 1% sales tax
• Streamlined Sales Tax – Penny elimination statement
• South Dakota Department of Revenue – Temporary state rate decrease to 4.2%
• Tax Foundation – State and Local Sales Tax Rates, Midyear 2026

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

• Latest US Sales and Use Tax Updates 2024/25
• Economic Nexus by State: What You Need to Know
• Sales Tax Nexus Management for Shopify and Marketplace Sellers