Updates by State

Arizona: Phoenix Increases Tiered Threshold Amounts for Retail Sales & Use Tax for 2026

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Written by: Christina L. Stainbrook

The City of Phoenix announced new threshold amounts for its two-level Retail Sales and Use Tax rate structure, effective January 1, 2026. These changes come as part of the voter-approved Comprehensive Transportation Plan, which requires biennial inflation adjustments to the thresholds used to determine how “big-ticket” items are taxed.

For 2026, the threshold for single items of tangible personal property will increase from $13,886 to $14,338. This update affects only those retailers and businesses with use tax liability whose sales or purchases fall between the current threshold and the new amount. Transactions at or below $13,886 remain unchanged, and only the portion of a sale exceeding $14,338 will qualify for the lower Level 2 tax rate.

These adjustments are required under long-standing city ordinances tied to Proposition 104 and directly impact reporting requirements for several business classifications, including retail sales, marketplace facilitator sales, adult-use and medical marijuana sales, and use-taxable purchases. Updated business codes and instructions for proper filing are outlined in the city’s Taxpayer Bulletin.

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California: Local Prepaid MTS Collection Act Extended to 2031

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Written by: Christina L. Stainbrook

California Assembly Bill 330 (AB 330) extends the sunset date of the Local Prepaid Mobile Telephony Services (MTS) Collection Act. Originally set to expire on January 1, 2026, the Act will now remain in effect through January 1, 2031. The legislation ensures the continued collection of prepaid mobile telephony surcharges that fund critical local emergency services.

Under the Act, retailers selling prepaid mobile services are required to collect applicable surcharges that support emergency response systems, including 911 and the 988 Suicide & Crisis Lifeline. With the extension in place, retailers should plan to continue compliance with these collection and remittance requirements for the next five years.

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California: E-Waste Fees Expanded to Battery-Embedded Devices

Written by: Christina L. Stainbrook

Effective January 1, 2026, consumers in California will see a new Covered Battery-Embedded (CBE) Waste Recycling Fee added to the purchase of any new or refurbished CBE product. This requirement comes from Senate Bill 1215 (Stats. 2022, ch. 370).

Retailers and marketplace sellers of these products must register for a CBE waste recycling fee account, charge the fee at the point of sale, and remit it to the state.

A CBE product is any item that contains a battery that cannot be easily removed using only common household tools. Notably, the following items are not considered CBE products:

  • Devices already covered under California’s existing e-waste recycling fee
  • Certain medical devices
  • Certain energy storage systems
  • Electronic nicotine delivery systems

Fee Rates:
This fee will be set by CalRecycle and updated every October.

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Colorado: Grand Junction Eliminates Vendor Fee Deduction

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Written by: Andrea Morrison

Effective January 1, 2026, the City of Grand Junction will no longer offer a vendor fee deduction. This change is part of the approved 2026 Budget and will be enacted through a subsequent ordinance scheduled to go before City Council.

The vendor fee, originally designed to offset the administrative burden of filing and remitting tax returns, has become less necessary as filing systems have modernized. In August 2025, the state of Colorado enacted HB25B-1005, eliminating the state sales tax vendor fee effective January 1, 2026. Grand Junction’s decision to follow suit aligns the city with the state, neighboring municipalities, and regional partners, helping reduce confusion for businesses that operate across multiple jurisdictions.

For local businesses, the change will take effect with the February 1, 2026, filing, which reflects the January 2026 return. At that time, businesses will remit the full amount of sales, lodging, and retail marijuana tax collected to the city of Grand Junction, without any vendor fee deduction.

City officials emphasize that this policy update ensures consistency across jurisdictions and simplifies compliance for businesses. More details can be found in the Proposed Ordinance – Elimination of the Vendor’s Fee Reduction.

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Colorado: Town of Monument Eliminates Vendor Fee

Written by: Andrea Morrison

The town of Monument has adopted Ordinance No. 21-2025, formally eliminating its sales tax vendor fee, effective January 1, 2026. The ordinance amends Section 3.12.090 of the municipal code by removing the provision that previously allowed retailers to retain a portion of the sales tax they collected on behalf of the town.

The ordinance strikes the vendor fee language in its entirety. As a result:

  • Retailers will be required to remit 100% of Monument’s sales tax collected on taxable transactions
  • No percentage-based retention or administrative allowance will be permitted after the effective date
  • The change applies uniformly to all filers, regardless of size or filing frequency

Monument’s update aligns with broader shifts occurring across Colorado. The state of Colorado eliminated its own vendor fee at the start of 2026, and many municipalities are adjusting their local codes to maintain consistency and simplify administration. Monument’s ordinance reflects this trend by removing a provision that would otherwise diverge from the state’s approach.

For businesses operating in Monument:

  • Filing and remittance procedures remain unchanged
  • Returns filed for periods beginning on or after January 1, 2026 must exclude any vendor fee deduction

Retailers should ensure internal systems, point-of-sale configurations, and accounting processes are updated to reflect the elimination of the allowance.

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Florida: State Launched New eFile and Pay System on December 1, 2025

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Written by: Rachael Dugan

Florida introduced a new eFile and Pay system for sales and use tax, solid waste fees and surcharges, and prepaid wireless fees. This upgrade is designed to streamline filing and payment processes, but it comes with important transition details you need to know.

Key Dates and System Access

  • November 26, 2025 (5 – 6 PM ET): The old site was unavailable during this hour for maintenance
  • After 6 PM on November 26: The old system will remain accessible only for historical filing information retrieval
  • Payments Between November 26 and December 1: Taxpayers could still make payments using the “Make a Payment” application on the old eServices website
  • December 1, 2025: The new eServices File and Pay system went live for filing and paying the listed taxes and fees
  • To access the new site: Visit the new eServices website and select “Sales and Use Tax” under the “eFile and Pay Taxes and Fees” section

Login and Credential Updates

Taxpayers will use their existing login credentials (User ID/Password or Certificate Number/Business Partner Number) to access the new system. However:

  • Saved credentials from the old system will not transfer
  • Copy/paste from the old system will not work–credentials must be entered manually the first time

Filing Deadlines

The monthly deadline remained December 19, but the Department strongly encouraged early filing and payment in order to:

  • Allow time to get familiar with the new system
  • Reduce the risk of delays if assistance is needed

Support for Taxpayers

For help with the transition, taxpayers can contact Taxpayer Services at (850) 488-6800. To learn more about this change, visit the eFile and Pay Information Center.

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Florida: State Sales Tax on Commercial Rentals Repealed Effective October 1, 2025

Written by: Rachael Dugan

Effective October 1, 2025, Florida fully repealed its 2% Business Rent Tax and corresponding county surtaxes on commercial real property leases under Section 212.031, F.S., as enacted by HB 7031, signed June 30, 2025. The repeal eliminates state and local sales tax on rent or license fees for occupancy periods beginning on or after that date, covering office, retail, warehouse, self-storage, and other commercial spaces.

Transitional rules require landlords to remit tax through September 30, 2025–even on late payments–and continue filing returns (including zero-returns) for those periods. The repeal does not apply to rentals of living accommodations (six months or less), parking, boat docks, or aircraft storage (covered under § 212.03, F.S.).

According to the Florida Department of Revenue TIP 25A01-04 (July 24, 2025), no new scholarship tax credits tied to commercial rent were issued after July 1, 2025. Revenue estimates project a state loss close to $1 billion annually, while advocates tout improved competitiveness and reduced costs for commercial tenants.

Compliance Steps After October 1, 2025

  1. Stop Charging Sales Tax on Commercial Rent – For occupancy periods beginning October 1, 2025, or later, landlords should not charge state or local sales tax on commercial property rentals.
  2. Update Accounting and Billing Systems – Remove tax calculations from invoices and accounting software for commercial leases starting October 1, 2025.
  3. Maintain Records for Audit – Keep documentation showing correct tax collection and remittance for pre-repeal periods, as audits can still cover prior years.

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Guam: Business Privilege Tax (BPT) Rate Change

Written by: Zachary McCauley

The Business Privilege Tax (BPT) rate for Guam has been reduced to 4.5% from 5%, effective October 1, 2025. The tax rate will be lowered again by .5% beginning October 1, 2026, for a total of 4%.

The tax rate reduction is part of the fiscal year 2026 budget bill, which became law following a veto override in September 2025.

This change primarily affects businesses reporting a gross annual income of over $500,000. Further, businesses holding United States Department of Defense contracts valued at $10 million or more have been excluded from this reduction. These companies will continue to pay the 5% BPT rate.

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Louisiana: Changes Coming to State Sales Tax Return and Release Update

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Written by: Zachary McCauley

The Louisiana Uniform Local Sales Tax Board (LULSTB), under Act No. 375 of the 2023 Regular Session, is introducing a streamlined tax filing system. The LULSTB has announced a “go-live” date of February 1, 2026, for the January 2026 filing period. This new approach eliminates the need for separate filings for each parish, simplifying compliance for taxpayers across the state.

Please note: per the LULSTB, remote filers with no physical presence in the state of Louisiana may continue filing through the Remote Sellers Portal.

Additionally, the new combined return will replace the sales tax returns only, and the separate hotel/motel returns will remain available. The current state return for consolidated filers, including State Schedule B, will also remain.

Mandatory Filing Frequency Alignment

A major requirement of the new system is that all state and local tax accounts must follow the same filing frequency. If any account is set to monthly, all others must be adjusted to match. This change affects businesses that previously filed annually, semi-annually, or occasionally, as those frequencies will no longer be accepted. A short-dated return covering January through September 2025 will be required for those transitioning.

System Transition and Account Setup

To prepare for the new filing process, businesses must consolidate their Parish E-File accounts and ensure all tax account numbers are valid. Each business location will be assigned a Master Location Number within Parish E-File, which will link all associated state and local accounts.

Postponement and Extended Testing Period

Although the combined return was initially scheduled to go live on November 1, 2025, the LULSTB announced a delay. This extension allows for additional testing, training, and system validation to ensure a smooth rollout. Focus groups are encouraged to continue testing, and training materials were made available the week of November 3. October 2025 returns may still be filed using the current formats.

Key Takeaways

  • Unified Filing: One return for state and all parish jurisdictions
  • Filing Frequency: All accounts must match the most frequent filing status–typically monthly
  • Platform Transition: Returns must be filed via Parish E-File; SalesTaxOnline is no longer supported
  • Account Setup: Valid tax account numbers and Master Location Numbers are required
  • Remote Sellers: Remote sellers filing through the Remote Sellers Portal will not be required to make this transition
  • Postponement: The go-live date was delayed, allowing more time for testing and training. Taxpayers were still able to file through Parish E-File for the month of October 2025 using the current multi-jurisdictional and/or single returns.

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Minnesota: New Accelerated Sales Tax Payment Rules Take Effect in 2027

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Written by: Andrea Morrison

Minnesota tax professionals and vendors should prepare for a key change in sales tax remittance requirements beginning in calendar year 2027. Under amendments to Minn. Stat. § 289A.20, subd. 4, vendors with significant sales tax liabilities will be required to make an accelerated payment in June each year.

What’s Changing?

Starting with taxes remitted after May 31, 2027, vendors who had $250,000 or more in sales tax liability during the previous fiscal year (ending June 30) must:

  • Pay 5.6% of their estimated June sales tax liability – This payment is due two business days before June 30 each year
  • Remit any remaining June liability by August 20 – Any unpaid portion of the June tax must be paid by this date

*This accelerated payment requirement does not apply to taxes imposed under chapters 168E, 295, and 297H. Additionally, outdated provisions related to construction material vendors have been removed.

Penalty for Underpayment

Minnesota Statute § 289A.60 now includes subdivision 15a, which introduces a penalty for failing to make the required accelerated June payment:

  • Penalty amount: 10% of the unpaid June liability
  • Safe harbor: No penalty will apply if the vendor remits the lesser of:
    • 5.6% of the previous May’s liability
    • 5.6% of the average monthly liability for the prior calendar year

This penalty provision also takes effect for taxes remitted after May 31, 2027.

Tax professionals should begin advising clients now to review their prior year liabilities and prepare for compliance with these new accelerated payment rules. Early planning can help avoid penalties and ensure smooth transitions when the law takes effect.

For more information, please visit Minnesota’s 2025 Sales and Use Tax Legislative Bulletin.

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Mississippi: Prepaid Wireless Surcharge Increasing

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Written by: Zachary McCauley

Effective January 1, 2026, the prepaid wireless telecommunications surcharge increased from $1.00 to $2.00.

The change is made by Senate Bill 2835, and the service charge will continue to be collected by the seller from the consumer on each retail transaction. The remittance is to be made on the 20th of every month following the sale, with a 2% discount for returns filed and paid by the due date.

For further information, please reference the official Mississippi Department of Revenue Notice 72-25-16, or contact the department directly.

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Nevada: Due Date Change for State Sales & Use Tax Returns

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Written by: Zachary McCauley

Beginning with the January 2026 Sales & Use tax return, the due date for returns will change from the last day of the month to the 20th of each month.

This change will take effect for the January 2026 sales and use tax return, which will be due on February 20, 2026.

This shift is part of the My Nevada Tax planned updates, and further information can be obtained directly from the Nevada Department of Taxation.

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New York: State Tax Department Announces Major Online Services Upgrade for 2025

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Written by: Andrea Morrison

In December 2025, the New York State Department of Taxation and Finance rolled out major improvements to its Online Services aimed at making accounts easier to use, more secure, and better tailored to individuals, businesses, tax professionals, and fiduciaries.

Key Updates for All Users

  • Simplified account creation and recovery for forgotten usernames or passwords
  • Improved login process using NY.Gov credentials
  • Enhanced account summary with clearer access to messages, documents, filings, and bills
  • Updated navigation for smoother movement within accounts
  • New web addresses for Online Services—users must update bookmarks once changes go live

Individual Accounts

  • Individuals can now block tax professionals from adding them as clients, offering stronger privacy protections

Business Accounts

  • Businesses can appoint up to five Business Master Administrators (previously limited to two)
  • Introduction of a new Manager role, which allows updating user roles and access permissions
  • Users themselves can no longer manage other users or tax professionals
  • Businesses also gain the option to prevent tax professionals from adding them as clients

Tax Professional Accounts

  • Adding individual clients now requires specific return information: taxable income plus either refund amount or amount owed
  • Streamlined navigation–the Services menu will show links relevant only to the client currently selected
  • Easier switching between clients via the Client Summary page

The December 2025 changes mark a significant step toward modernizing New York’s Online Services, with a focus on security, usability, and flexibility. Whether you’re an individual taxpayer, a business, or a tax professional, these updates are designed to make managing tax obligations more efficient and secure.

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South Dakota: State To Require Motor Fuel Diversion Reporting

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Written by: Amanda Bratton

Effective January 1, 2026, businesses transporting more than 4,200 gallons of motor fuel or special fuel on South Dakota highways must comply with new state requirements, including filing a diversion report whenever fuel is delivered to a destination other than the one listed on the original bill of lading.

Under South Dakota Codified Law 10-47B-46, transporters must provide recipients with a copy of the bill of lading or drop load ticket, as well as any diversion tickets that have been issued. Failure to comply may lead to penalties, licensing issues, or tax discrepancies.

Further details can be found in the South Dakota Department of Revenue’s Fall Newsletter.

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South Dakota: State Supreme Court Expands Use Tax to Stored Materials

Written by: Amanda Bratton

The South Dakota Supreme Court has ruled that use tax is due when untaxed materials are stored in the state, not just when used in a project. This overturns a prior interpretation that allowed businesses and contractors to delay payment until materials were utilized.

Businesses purchasing materials from out of state must now pay use tax immediately upon storage. Those following the old rule risk penalties or assessments if audited. The decision aims to ensure tax parity between in-state and out-of-state purchases.

Further information can be found in the South Dakota Department of Revenue’s Fall Newsletter.

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Tennessee: New Retail Accountability Program (RAP) Manual Now Available

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Written by: Christina L. Stainbrook

To support wholesalers, the Department of Revenue recently released a brand new comprehensive RAP Manual, along with file layout templates and FAQs. The manual explains who must report, what information needs to be submitted, and how to file electronically.

Tennessee’s Retail Accountability Program (RAP) is the state’s way of ensuring sales tax collected at the register makes its way to where it belongs—supporting schools, services, and communities across Tennessee. Launched in 2012, RAP requires beer and tobacco wholesalers to electronically report their sales to retailers. The Department of Revenue compares this data to retailers’ sales tax filings to quickly spot under-reporting.

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Texas: New Sales & Use Tax Deductions for Texas Oysters

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Written by: Zachary McCauley

Beginning with the October 2025 tax period, due November 2025, there was a new oyster sales and use tax credit available to food establishments operating in Texas. House Bill 3486 introduces “a new tax deduction for restaurant owners who purchase Texas farm-raised oysters, allowing them to deduct $5 for every 100 oysters bought for preparation and service at their food service establishment.”

The new tax deduction does not apply to tax liabilities incurred before October 1, 2025.

Additionally, House Bill 3487 allows food service establishments to deduct $2 for every 50 lbs. of oyster shells collected and provided to an authorized oyster shell recycling program.

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Virginia: Richmond City Imposes New Bag Tax

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Written by: Christina L. Stainbrook

Effective January 1, 2026, the city of Richmond will require retailers to collect a 5-cent tax for every disposable plastic bag they provide customers, joining a growing list of jurisdictions in the state. The tax covers disposable bags handed out by grocery stores, convenience stores, and drugstores, but does not apply to reusable (durable) bags, bags used to package perishable food (like meat or produce), bags for prescriptions or dry cleaning, or multi-bag packs meant for trash, pet waste, or leaf removal. Businesses will report and remit the tax via their regular sales and use tax returns.

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Washington: Seattle Enacts Local B&O Tax Threshold Changes

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Written by: Christina L. Stainbrook

Seattle’s Business & Occupation (B&O) tax structure changed effective January 1, 2026, following voter approval of Proposition 2. The B&O tax threshold increases from $100,000 to $2 million in Seattle-sourced gross receipts, eliminating B&O tax liability for most small and mid-sized businesses. Businesses exceeding the threshold will also receive a $2 million standard deduction, with tax applied only to receipts above that amount. Limited credits were added for certain medical providers.

To offset the expanded exemption and deduction, B&O tax rates increase across all classifications and will remain in effect through December 31, 2032, with reduced rates scheduled to begin in 2033. While most businesses will see reduced or no B&O tax due, larger taxpayers should expect higher rates and should review the updated structure to understand the impact on future Seattle filings.

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