October 2025 sales tax updates

This post has been updated. It was originally published on September 9, 2025.

Numerous state sales tax updates take effect October 1, 2025. Read on to learn about new rates, exemptions, and rules that may impact your sales tax compliance in October 2025.

• Notable October 2025 sales tax changes include the elimination of the Florida sales tax on commercial leases and Washington state’s new sales tax on various business activities.

• Sales and use tax rate changes take effect in more than a dozen states on October 1, 2025.

• Avalara has embedded AI directly into the Avalara Tax Research platform to help businesses keep up with tax changes.

Florida is the only state that taxes the rent on commercial spaces as of September 2025, though some local governments in other states impose a local commercial rent tax. 

Effective October 1, 2025, the Florida sales tax on commercial rentals is repealed.

Illinois is running a tax amnesty program from October 1, 2025, through November 15, 2025.

During the amnesty period, the Illinois Department of Revenue will forgive penalties and interest for qualifying taxpayers who pay eligible outstanding tax liabilities in full. The tax amnesty covers tax periods beginning after June 30, 2018, and before July 1, 2025.

Starting October 1, 2025, Washington sales tax applies to advertising, custom website development, information technology, investigation and security services, live presentations, and temporary staffing services. 

Sales of custom software and the customization of prewritten software are also subject to Washington sales tax starting October 1. Find more details in our blog post, Washington to tax digital ads and tech services. 

The sales tax rate on digital goods, taxable services, and tangible personal property in Washington, D.C., was scheduled to jump from 6% to 6.5% on October 1, 2025. However, due to the enactment of the Sales Tax Increase Delay Amendment Act of 2025, the rate remains 6% through September 30, 2026.

The District of Columbia did implement a new 7.5% sales and use tax on commercial bingo as of October 1, 2025.

See the District of Columbia Office of Tax and Revenue for more details.

Short-term parking services are subject to Rhode Island sales tax starting October 1, 2025.

Rhode Island is also expanding the definition of “other tobacco products” (OTP), making more products subject to the OTP tax effective October 1, 2025.

Effective October 1, 2025, sales of electricity and natural gas for residential use are exempt from Wisconsin sale and use tax regardless of when they are sold.

The Florida Second Amendment sales tax holiday runs September 8, 2025, through December 31, 2025. So, during the month of October, a host of camping, fishing, and hunting supplies are exempt from Florida sales tax.

Starting October 1, 2025, local governments in Alabama must adopt an ordinance to participate in a sales tax holiday at least 90 days prior to the start of the event. Previously, such ordinances had to be adopted just 30 days prior to the start of the tax-free weekend.

Learn more about these and other tax-free events in our 2025 sales tax holidays blog post.

Tax rate changes take effect on October 1, 2025, in numerous states, including:

• Alaska (there’s no state sales tax in Alaska, but seasonal sales tax rate changes take effect in several localities on October 1, 2025) 
• Arizona
• Arkansas
• California
• Georgia
• Kansas
• Michigan (new prepaid sales tax rates on gasoline and diesel fuel)
• Missouri
• Nebraska
• North Dakota
• Ohio
• Oklahoma
• Texas
• Utah (new annexations and location codes)
• Washington, D.C.

Businesses are required to keep track of tax changes, but most people don’t have a whole lot of time to devote to tax research. To help businesses keep up, Avalara has embedded AI directly into the Avalara Tax Research platform. The addition of an AI-powered assistant allows Avalara Tax Research to deliver content faster and provide more seamless research experiences. Start your free trial today.