July 2023 sales tax changes

Independence Day in the U.S. is more than just a 1996 alien invasion movie — it’s also a monthlong celebration of freedom, fireworks, and sales tax changes. Well, at least that’s how a lot of states are ringing in the red, white, and blue month of July. Grill up a hot dog and take a look at which states are enacting rate changes on July 1, 2023:

• Arizona new hotel/motel tax in the city of Show Low

• Arkansas

• California  

• Colorado changes in the cities of Fairplay and Mead, the counties of Mineral and San Miguel, for county lodging in Clear Creek, and for city tax in Grand Junction

• Georgia counties of Taylor and Ware

• Florida

• Illinois

• Indiana changes to sales tax exemptions for nonprofits

• Iowa electric vehicle tax takes effect

• Kansas

• Kentucky cigarette and tobacco products licenses effective date

• Louisiana

• Maryland motor fuel tax rates, sales and use tax rate on the sale of adult-use cannabis 

• Michigan prepaid sales tax rate on fuel

• Minnesota retail sales tax in Litchfield, motor vehicle sales tax rate

• Mississippi repeal sales tax on wholesale purchases of beer, applies sales and use tax to computer software and computer software services

• Nebraska village of Trenton and city of Ord

• Nevada

• New Mexico is lowering the state gross receipts tax rate to 4.875%

• North Dakota changes in the cities of Frontier and West Fargo, plus a tax exemption on diapers

• Ohio

• Oklahoma

• South Dakota eliminating economic nexus transaction threshold, plus changes to the state sales tax rate

• Tennessee cannabinoid and rate change for the city of Somerville

• Texas

• Utah 

• Virginia Pittsylvania County

• Washington

• West Virginia

Last July, Colorado imposed a retail delivery fee on taxable goods delivered via motor vehicle. Exactly a year later, a new law permits retailers to pay the fee on behalf of their customers.

Also, as of July 1, 2023, local taxing jurisdictions can no longer require retailers with incidental physical presence or no physical presence in the jurisdiction to apply for a local business license in that jurisdiction.

Delivery and shipping charges are not subject to Kansas sales tax starting July 1, 2023, provided the charges are clearly identified, separately stated, reasonable, and provable.

Iowa’s electric vehicle tax takes effect July 1. Owners of EV charging stations will be responsible for reporting and paying $.026 per kilowatt-hour of electric fuel dispensed into an EV battery or energy storage device.

Beginning July 1, 2023, adult-use and medical cannabis in Maryland is subject to a 9% sales and use tax. A little further south in Tennessee, businesses selling cannabinoid products will pay a 6% sales tax in addition to the standard 7% state sales tax rate.

Starting July 1, South Dakota is eliminating its 200-transaction threshold for businesses without physical presence in the state. This is just five years after South Dakota led the charge in taxing remote sales with the U.S. Supreme Court’s South Dakota v. Wayfair, Inc. decision. Learn more about economic nexus transaction thresholds and which states might be following suit.

Consumers in Florida can save sales tax on everything from clothes to gas stoves this month. But what does that mean if you’re a retailer or business owner in The Sunshine State? Find out what these holidays might be costing you.

Adult diapers are already exempt from sales tax in North Dakota. However, starting July 1, 2023, child diapers will be exempt from North Dakota sales and use tax too.

Alabama
Back to school sales tax holiday, July 21–23, 2023

• Books priced $30 or less

• Clothing priced $100 or less

• Computers, computer software, and school computer supplies priced $750 or less

• School supplies priced $50 or less

Florida
Impact-resistant doors, garage doors, and windows, July 1, 2022–June 30, 2024

• Doors, garage doors, or windows must be labeled as impact-resistant or have an impact-resistant rating

Freedom Summer sales tax holiday, May 29–September 4, 2023

• Admissions to live music, ballet, play, musical theater, and sporting events, or movies shown in a movie theater, on any date May 29–December 31, 2023 
• Entry to a museum or state park, including annual passes Season tickets for ballets, plays, music events, or musical theater performances 
• Entry to a fair, festival, or cultural event scheduled to be held May 29–December 31, 2023 
• Use of or access to private and membership clubs providing physical fitness facilities May 29–December 31, 2023 
• Retail sale of boating and water activity supplies, camping supplies, fishing supplies, general outdoor supplies, residential pool supplies (various price restrictions apply) 
• Retail sale of toys and athletic equipment that are intended for children 12 years of age or younger (various price restrictions apply)

Back to school sales tax holidays, July 24–August 6, 2023

• Clothing, wallets, and qualifying bags priced $100 or less 
• School supplies priced $50 or less 
• Learning aids and jigsaw puzzles priced $30 or less 
• Personal computers and computer-related accessories priced $1,500 or less

Energy Star appliance sales tax holiday, July 1, 2023–June 30, 2024

• Washing machines priced $1,500 or less 
• Clothes dryers priced $1,500 or less  
• Refrigerators or refrigerator/freezers priced $4,500 or less 
• Water heaters priced $1,500 or less
• The sales tax exemption applies only to qualifying products affixed with an ENERGY STAR label

Gas ranges and cooktops, July 1, 2023–June 30, 2024

• Any range of cooktop fueled by combustible gas (e.g., butane, natural gas, propane), no price restrictions 
• Does not apply to outdoor gas grills, camping stoves, or other portable stoves

Mississippi
Mississippi annual sales tax holiday, July 28–29, 2023

• Clothing and footwear priced less than $100 
• Specific school supplies priced less than $100 
• Municipalities may opt-out by resolution, so depending on the location, local sales tax may continue to apply to eligible sales within the corporate limits of the municipality 

Puerto Rico
Back to school sales tax holiday, July 14–15, 2023

• School materials
• School uniforms and footwear

Learn more about sales tax holidays and tax-free weekends. 

Stay up to date on all the sales and use rate changes with the Avalara Tax Desk.