March 2021 sales tax rate changes

Local sales tax rate changes are scheduled to take effect in several states on March 1, 2021, including Alabama, Arizona, and Michigan.

Of the 45 states with a general sales tax, 38 allow additional local sales taxes. All told, there are more than 13,000 sales tax jurisdictions in the United States, and many of them overlap. In some states, such as Alabama, sales and use tax rates are subject to frequent change. In others, such as Nebraska, changes generally occur on a quarterly basis.

Sales tax rates and rules in many states are determined by destination sourcing rules, or the delivery address. However, sales tax rates aren’t based on ZIP codes. The most effective way to track and account for sales tax rate changes is to use geolocation technology, which calculates rates down to the rooftop.

A cloud-based sales and use tax calculation system like Avalara AvaTax applies updated rates at the point of purchase, minimizing errors and improving overall compliance. See how it works.