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Recent US Sales Tax Updates
Shopify banned vape and e-cigarette products in 2026 (2,700+ stores affected)
State attorneys general demanded action, Shopify complied, and thousands of vape sellers must now replatform.
U.S. penny elimination: what it means for sales tax calculations
The U.S. has stopped minting pennies, but sales tax rules remain unchanged. SST guidance confirms tax must still be calculated and rounded as usual, with cash rounding applied only to the total transaction.
State Grocery Tax Set to End in Illinois in 2026
In 2026, Illinois will eliminate its 1% state sales tax on food for human consumption. However, local governments will be allowed to impose their own 1% grocery tax and many plan to do so.
California will tax SaaS and software starting January 1, 2027
Governor Newsom signed SB 122, adding prewritten software and SaaS to the sales tax base for the first time. Here's what sellers need to do before January.
Washington creates new sales tax exemptions in 2026 and 2029
Washington has enacted SB 6346, repealing sales tax on many recently taxed services and introducing future exemptions for essential consumer products like diapers and OTC medicine.
Kentucky drops the 200-transaction nexus threshold in August 1, 2026
Kentucky eliminates the 200-transaction economic nexus threshold, shifting the standard from "$100,000 or 200 transactions" to "$100,000 in sales only.
South Dakota sales tax returns to 4.5% on July 1, 2027
The state’s reduced 4.2% sales tax rate was always temporary and is scheduled to return to 4.5% on July 1, 2027.
Alabama sales tax update: credit card fees no longer taxable in 2026
Beginning September 1, 2026, Alabama will exclude credit card processing fees from sales and use tax calculations. Learn what changed and how to prepare.
Alabama suspends state sales tax on groceries for two months starting May 1
From May 1 to June 30, 2026, Alabama will temporarily reduce the state sales tax rate on qualifying food items to 0%. Local taxes remain unchanged. Here’s what businesses should prepare for.
FBA inventory stored in California can trigger back taxes
Storing FBA inventory in California fulfillment centers establishes franchise tax nexus, separate from sales tax, with a $800 minimum tax regardless of revenue.
FAQ
We send alerts when rules change, typically once a month.
We focus on the most important state and regional sales tax updates — the ones likely to impact online sellers in the U.S. and their teams.
Us, Team TaxCloud! We monitor official sources like state Departments of Revenue and translate them into plain-English updates with clear next steps.
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