States Implementing Last-Minute Sales Tax Policy Changes: Vermont, North Carolina, New Jersey, and Ohio
States are known to make substantial sales tax policy changes with little to no notice, and this summer has been no exception. Vermont, North Carolina, New Jersey, and Ohio have all implemented significant sales tax changes that have caught many businesses off guard.
In Vermont, Governor Phil Scott vetoed a bill that extended sales and use tax to remotely accessed prewritten computer software. However, the Vermont Legislature overrode the veto, and the measure took effect on July 1, 2024. Additionally, a 3% short-term rental impact surcharge was imposed on all short-term rentals in the state as of August 1, 2024.
North Carolina repealed the 200-transactions threshold for economic nexus, meaning remote sellers that do 200 or more transactions but less than $100,000 in gross sales in the state no longer need to register for sales tax. This change took effect on July 1, 2024, catching many businesses off guard.
New Jersey repealed its annual sales tax holiday, meaning that sales tax will now apply to certain items that would have been exempt from August 24 through September 2, 2024. Retailers have a limited amount of time to prepare for this change.
On the other hand, Ohio expanded its sales tax holiday for 2024, running from July 30 through August 8, 2024. The sales tax exemption now applies to almost all tangible personal property priced up to $500, giving retailers just two months to prepare.
To stay sales tax compliant in the face of these last-minute changes, businesses need to be ready to pivot and adapt to the evolving tax landscape. With states continuing to leverage tax policy for various purposes, businesses must stay informed and proactive to ensure compliance.