In most US states (except for Texas, Alabama, New York, and Michigan), July marks the beginning of a new fiscal year. With the beginning of a new tax year, some changes typically take place. This year is no exception. Below, you will find a summary of the most recent changes in sales and use taxes across the US.
Sales tax reduction in New Mexico
Sales tax rate reductions are typically rare occurrences and happen much less frequently than sales tax increases. By lowering its sales tax (gross receipts tax) from 5.125% to 5%, New Mexico has become one of the few states to do so. Next year, on July 2023, the state will further drop the rate to 4.875%. The sales tax rate reduction is expected to not decrease the tax revenue significantly. However, if the gross receipts tax revenues drop by more than 5% in any year between 2026 and 2029, the state plans to overturn the tax reductions and return to the 5.125% rate.
In addition, starting July 1 this year, New Mexico has added feminine hygiene products to the tax-exempt goods list.
A wide array of exemptions in Maryland
In an attempt to increase the accessibility of these products, diapers, baby bottles, and car seats will become sales tax-exempt. In addition, some medical items will also be made sales tax-free. These include thermometers, equipment for diabetic care, and oral hygiene goods.
Changes in sales tax registration thresholds for nonprofits in Indiana
Up until July this year, nonprofits in Indiana had to register for the sales tax if they sold goods or services for more than 30 days a year. From now on, the nonprofit’s sales tax registration threshold is set at USD 20,000 a year.
Supply chain-related exemptions in Idaho
Idaho has exempted specific semiconductors from the sales tax while fighting the shortage of electronics products.
Exemptions of prescriptions drugs in Louisiana
A recent enactment will prohibit adding a local sales tax rate to specified prescription drugs in Louisiana.
No marijuana-related exemptions in Mississippi
While Mississippi allows a sales tax relief for medical care facilities construction, the states’ decision makers specified that this clause does not apply to medical marijuana establishments.
No sales tax for disaster recovery in Oklahoma
Oklahoma has signed a new clause that will exempt nonprofits operating in disaster recovery areas from the sales tax.
Specified exemptions in Vermont
Vermont’s authorities have provided an explanation that equipment used as part of the process does qualify for the sales tax exemption applied to manufacturing machinery and equipment.
More exemptions in Virginia
From July this year, network equipment used for video broadcasting or by network carriers will be sales tax-exempt in Virginia.
Need more resources on sales tax?
If you have any questions on the sales tax in any state of the US, please reach out to us and get a professional consultation from our experts at 1stopVAT.