February 2022 sales tax rate changes

Several states will experience some type of sales tax rate change(s) in February 2022. These range from local rate changes to new exemptions and sales tax holidays. Read on for more details.

New local tax rates

Alabama

As of February 1, 2022, the Alabama Department of Revenue will no longer administer or collect sales and use tax and other taxes for the town of Clayton. However, these taxes can still be remitted online through My Alabama Taxes (MAT).

The city of Irondale is increasing the following sales and use tax rates as of February 1, 2022:

  • Net difference paid for machines, machinery, and equipment used in planting, cultivating, and harvesting farm products (from 1% to 1.5%)

  • Machines and parts and attachments for machines used in manufacturing tangible personal property (from 1% to 1.5%)

  • Net difference paid for all automotive vehicles, truck trailers, semitrailers, and house trailers (from 1.5% to 2%)

The rate for sales made outside the corporate limits of the city but within the police jurisdiction is half the rates listed above.

The city of Jasper is increasing all local sales and use tax rates starting February 1, 2022, as follows:

  • General rate (from 3% to 3.5%)

  • Admissions to places of amusement and entertainment (from 3% to 3.5%) 

  • Retail selling price of food for human consumption sold through vending machines  (from 3% to 3.5%)

  • Net difference paid for machines, machinery, and equipment used in planting, cultivating, and harvesting farm products (from 0.75% to 0.875%) 

  • Machines and parts and attachments for machines used in manufacturing tangible personal property (from 0.75% to 0.875%) 

  • Net difference paid for all automotive vehicles, truck trailers, semitrailers, and house trailers (from 0.75% to 0.875%)  

  • Withdrawal fee for automotive vehicle dealers only (from 3% to 11.66%)

Arizona

The city of Benson is imposing a new sales and use tax on jet fuel (three-and-a-half cents per gallon) starting February 1, 2022.

California

Effective February 1, 2022, the surcharge rate for the Deaf and Disabled Telecommunications Program Fund (DDTP) is 1.11%. Previously, it was 0.5%. Additional information.

New sourcing rule will affect tax rates

Colorado 

Update: Colorado was scheduled to complete its transition to destination sourcing on February 1, 2022. Instead, Governor Polis signed HB22-1027 into law on January 31, 2022, giving small businesses in the state until October 1, 2022, to comply with destination sourcing rules. 

New sales tax exemption

Michigan

Feminine hygiene products are exempt from Michigan sales and use tax starting February 3, 2022. (You read that right: February 3, not February 1.)

New fee structure for sales tax permits

Rhode Island

Looking ahead, Rhode Island is eliminating fees for sales tax permits — both the fee for a new permit and the fee to renew a permit. 

According to the Rhode Island Division of Taxation, the $10 renewal fee has been eliminated for renewals due by February 1, 2022, or later (covering periods after July 1, 2022). The $10 application fee is also being eliminated for new applications for periods beginning on or after July 1, 2022. The Division of Taxation says it will return your payment if you send a check when no fee is due. 

The Division reminds that applications must still be submitted even though fees are being eliminated: “The submission of an application to make sales at retail is still required but the fee for periods after July 1, 2022 is not. The fee is still required for new permit applications for periods prior to July 1, 2022.” See Tax Advisory No. 2022-05 (January 18, 2022) for more details.

 

February 2022 sales tax holidays

There will be two sales tax holidays in February:

These are just two of many sales tax holidays that will be offered in 2022.

 

Avalara’s cloud-based sales and use tax calculation system helps businesses of all sizes and industries apply the latest sales and use tax rates to each transaction.

Cover photo by Canva

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