Sales Tax Policy Changes

Mississippi decreased their sales tax rate on groceries sales from 7% to 5%, beginning July 1, 2025. The term groceries encompasses any food or drink that is for human consumption and could be bought with food stamps. If it is actually purchased with food stamps, there is no tax. If it is not eligible to be purchased with food stamps, then the full rate of 7% is due. Only items that are eligible to be purchased with food stamps but are purchased without food stamps are subject to the 5%.

Read more about this change on the Mississippi Department of Revenue’s website: https://www.dor.ms.gov/node/16081

Starting July 1, 2025, Utah’s change to their economic nexus threshold will go into effect. Their previous economic nexus threshold was based on whether you had 200 or more transactions in the state or $100,000 in revenue or gross sales. The amendment to the threshold now makes total gross sales the determining factor for economic nexus. This change will impact both voluntary sellers and marketplace facilitators if they qualify in the previous or current calendar year. Sellers will now be required to pay or collect and remit sales and use tax if their gross revenue surpasses the total of $100,000 from the sales of tangible personal property, products transferred electronically, or storage, use, or consumption services in Utah. For marketplace facilitators, they have to now pay or collect and remit sales and use tax if their sales or sales mediated on behalf of other sellers surpasses $100,000. Sellers can deregister immediately if they were only registered due to the 200 transaction threshold.

For more information, read the full update now: https://le.utah.gov/~2025/bills/static/SB0047.html

As a reminder effective July 1, 2025, Colorado will decrease their retail delivery fee from $0.29 to $0.28. The enterprises annually determine and set the rates for the upcoming fiscal year, with a statutory maximum increase based on inflation. In 2025, the rates set by each enterprise resulted in a net decrease. As a result, the Retail Delivery Fee rate is decreasing from $0.29 to $0.28, effective July 1, 2025.

Read more at: https://tax.colorado.gov/retail-delivery-fee-rates

Illinois released answers to some FAQs on rental and lease transactions' taxes, which went into effect on January 1, 2025. Some of the topics were: taxation of certain receipts, taxes on contracts of lease and rentals before January 1, 2025, leases and rentals of computer software, the procedures surrounding payments, the sourcing rules, and more. Read the full list of FAQ topics here: https://tax.illinois.gov/research/publications/pubs/lease-tax-faqs.html

Financial Crimes Enforcement Network or FinCEN Removed Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons. The Financial Crimes Enforcement Network (FinCEN) is issuing an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office. In summary US companies do not need to comply, and foreign companies do need to comply. 

On January 1, 2025 Alaska eliminated the 200 separate transaction threshold for remote sellers, leaving only the dollar-based threshold of $100,000. This means that small sellers may deregister if they are below the dollar based threshold of $100,000 as of January1, 2025. In general states say that you must stay registered for 12 months after your nexus ends. This is called trailing nexus. When a state elminates thresholds some make you follow the trailing nexus guidlines while others (like Alaska) let you deregister immediately!

Pursuant to Am. Sub. H.B. 33 of the 135th Ohio General Assembly, the Commercial Activity Tax (CAT) underwent major changes beginning January 1, 2024.  For tax periods beginning on and after January 1, 2024, the CAT annual minimum tax is eliminated, and the exclusion amount is increased from $1 million to $3 million.  For calendar year 2025 and thereafter, the exclusion amount is increased to $6 million. 

Sales and use tax on leases and rentals begins Jan 1, 2025 in Illinois. This is a big change, as IL and Maine were the only two states not to tax rentals prior to this. Illinois issued guidance on the sales and use tax that applies to tangible personal property leased from retailers or service providers, which includes information on what and who is subject to the tax, registration requirements, sourcing rules and reporting requirements. Read more about this at: https://tax.illinois.gov/research/publications/bulletins/fy-2025-15.html

Massachusetts is launching a tax amnesty program on Nov 1, 2024. They have added FAQs to their webpage which you can view here. This program will run for 60 days ending on Dec 30, 2024.  Eligible taxpayers can request a waiver of penalties on outstanding taxes and interest paid during the amnesty period.

• If you have an eligible existing tax liability, you will receive an Amnesty Eligibility Letter. All you will need to submit for your Amnesty Request is your personal information, the Letter ID, and a valid payment method (e.g., bank account information, credit card).

• If you are filing a new return to report a tax due, you will need to complete your return to calculate your amount due. Once completed, you can complete your Amnesty Request using the information from the return. Don’t forget to either e-file or mail your completed return after you submit your Amnesty Request.

• If you are filing an amended return to report an increase in tax, you will need to complete your amended return to calculate your amount due. Once completed, you will need to sign on to your MassTaxConnect account to complete your Amnesty Request using the information from the amended return. Don’t have an account? No problem, it only takes a few minutes to register for MassTaxConnect. Don’t forget to either e-file or mail your amended return after you submit your Amnesty Request.

In general, a VDA is better than an amnesty due to its limited look back period. However, this amnesty has one as well making it a great option for those eligible. If you have any questions or would like assistance with this program and have receive an eligibility letter, please contact us at contact@salestaxandmore.com 

North Carolina recently repealed their transaction threshold effective July 1, 2024. Session Law 2024-28 was sent to the Governor’s desk on June 28, 2024. On July 1, he signed it and it immediately became effective.

There is no trailing nexus and now the remote seller threshold only includes a monetary threshold of 100k. Read more: https://www.ncdor.gov/sd-24-1-repeal-transaction-thresholdpdf/open