Utah to Eliminate Transaction Threshold for Economic Nexus
Starting July 1, Utah will remove its 200-transaction threshold for economic nexus under S.B. 47, signed into law on March 25. In the future, sellers will only be required to collect and remit sales and use tax if their annual sales in Utah exceed $100,000 in gross revenue.
Utah joins over a dozen states, including recent examples Indiana and South Dakota, that have done away with transaction-based thresholds. Most states, as well as D.C. and Puerto Rico, still maintain economic nexus rules based on either sales volume, dollar amount, or both.
Florida Weighs Sales Tax Changes
In Florida, lawmakers face a May 2 deadline to reach a tax agreement and avoid a special session. A House plan proposes cutting the state sales tax from 6% to 5.25%, championed by House Speaker Daniel Perez.
Meanwhile, Governor Ron DeSantis supports a $1,000 tax break for homestead property owners instead, arguing it benefits residents better than a broader sales tax cut, which would also aid tourists. Critics warn that deep cuts could hinder the state’s ability to weather future economic downturns.
L.A. County Sees Sales Tax Increase
Sales tax rates in Los Angeles County are rising due to a voter-approved measure to fund homelessness initiatives. Lancaster and Palmdale added their own 0.75% local tax on top of the countywide increase, bringing their total sales tax to 11.25%, now the highest in the region. Compton, Lynwood, and South Gate also saw rates climb to 10.75%.
California and Pennsylvania Tweak Sales Tax Policies
In California, certain items remain exempt from sales tax, including most groceries, prescription medications, and U.S. government purchases. Meanwhile, Pennsylvania’s Senate Finance Committee has advanced legislation to lift the $300 monthly cap on vendor discounts for timely sales tax remittance. Currently, businesses receive a 1% discount on taxes collected, capped at $300. The bill aims to help companies to offset compliance costs like bookkeeping and payment processing.
Alabama Moves to Cut Grocery Tax
Alabama is advancing legislation to reduce its grocery sales tax from 3% to 2%. The measure, part of a broader tax-cut package, has passed the House and awaits Senate committee review. Ten states with statewide sales taxes still apply them to groceries,
Entirely or at reduced rates, including Alabama, Arkansas, Hawaii, Idaho, Illinois, Mississippi, Missouri, Tennessee, South Dakota, and Utah. Kansas and Oklahoma have recently repealed their grocery taxes.
