August 2026 monthly roundup

This month’s tax roundup highlights new tax rules, policy shifts, and other key tax and compliance updates covered in our blog in August 2026. Each could affect your business.

• State sales tax policies continue to shift. Courts struck down Maryland’s digital ad tax, Pennsylvania announced destination sourcing for local sales taxes, North Carolina gave remote sellers 60+ days to register, and states pushed to restrict card swipe fees on taxes.
• Enterprise tax risk extends across communications, property, and trade. Businesses face hidden communications tax exposure on digital products, rising operational hurdles despite property tax relief, and ongoing U.S.-Canada tariff uncertainty.
• Product innovation and AI governance are accelerating. Avalara launched the Versori Partner Training Program and Avalara Select for SMBs, while research highlights the urgent need for finance governance as AI agent adoption surges.

Amazon is running out of options for South Carolina tax case. The South Carolina Supreme Court has ruled that Amazon is liable for about $12.5 million in unpaid sales tax on third-party marketplace sales from the first quarter of 2016. Read about the South Carolina-Amazon ruling and its potential fallout.

Maryland’s digital ad tax was struck down. In another much-anticipated ruling, the Maryland Tax Court decided the state’s digital advertising tax is unconstitutional and runs afoul of the Internet Tax Freedom Act. The state must issue refunds to the three companies that sued to block the tax. Learn what the Maryland decision means for digital taxes in other states.

Remote sellers were given a little breathing room in North Carolina. As of July 2, 2026, remote sellers exceeding North Carolina’s $100,000 sales threshold have at least 60 days to register and begin collecting sales tax. Previously, they needed to register immediately after establishing economic nexus. Discover how North Carolina’s new registration timeline impacts remote sellers.

Pennsylvania is changing local sales tax sourcing rules. Starting October 1, 2026, Pennsylvania will enforce destination sourcing for local sales taxes in Philadelphia (2%) and Allegheny County (1%). This will affect both intrastate and interstate sellers. See how Pennsylvania’s local sourcing change affects your transactions.

State efforts to ban swipe fees on taxes and fees are facing pushback. Illinois has delayed, again, the effective date of a law prohibiting payment card interchange fees on sales tax and tips. Learn more about swipe fee restrictions how they could impact payment and point-of-sale compliance.

Another economic transaction threshold bit the dust. As of August 1, 2026, 17 states have eliminated the 200-transaction threshold for economic nexus. Which state do you think will be next?

1099 reporting is going from FIRE to IRIS. Businesses will need to rethink their approach to 1099 compliance for 2026. Validation is moving closer to the point of transmission, and in this new environment, data accuracy is essential. Learn how to prepare your 1099 compliance workflow for the IRIS transition.

Hidden communications tax exposure can create audit risks. A growing number of products and services, like messaging APIs, streaming content, and VoIP, are subject to communications taxes. Unfortunately, it’s often difficult to ascertain which communications taxes and fees apply. Assess your communications tax audit risk and compliance requirements.

Property tax relief can lead to unexpected consequences. Several states expanded business personal property tax relief in 2026, but complex filing rules, strict appeal windows, and valuation discrepancies can create new operational challenges for enterprise businesses. Read about how to manage property tax compliance and maximize relief opportunities.

International trade remains volatile. The new Section 301 tariffs are being challenged, U.S. Customs and Border Protection paused IEEPA tariff refunds, President Trump has temporarily lifted beef tariffs, and U.S.-Canada tariffs are escalating. Review the 2026 global tariffs timeline.

Unneighborly disputes are underway in North America. The U.S. set 50% tariffs on a range of Canadian products effective August 22, 2026, and Canada will impose retaliatory tariffs on U.S. imports starting September 8, 2026. The situation could worsen before it improves. Get the latest details on U.S.-Canada trade and duty requirements.

Versori training program expands options for partners. With the Acquisition of Versori, an AI-native integration platform, and the launch of the Versori Training Program, Avalara partners now have a self-paced path to learn the platform and apply it to custom Avalara integrations. Explore the Versori Training Program and partner enablement path.

Avalara Select simplifies sales tax for small businesses. Avalara Select combines real-time calculation (Avalara AvaTax) and managed filing (Avalara Managed Returns) into a predictable, transparent state-based pricing bundle built for growing businesses with up to $50 million in annual revenue. Learn more about Avalara Select plans and pricing.

AI agent deployment is outrunning finance governance. A global survey of 1,500+ CFOs and senior finance leaders reveals that while 92% of respondents feel pressure to deploy AI agents quickly, 76% lack the specialized in-house expertise needed to understand how their AI agents work. Get more insights from the survey report on AI agents and finance governance.

Product Pulse highlights new platform capabilities. Recent updates include destination country-based transaction routing for Shopify, Avi AI guidance for Salesforce Sales Cloud, French e-invoicing readiness, and a unified in-app notification center (AvaApp). Check out the complete list of recent platform enhancements.

Pennsylvania will begin enforcing destination sourcing for local sales taxes in Philadelphia and Allegheny County on October 1, 2026. And remote sellers in North Carolina now have at least 60 days to register after establishing economic nexus.

On December 31, 2026, the IRS is retiring the Filing Information Returns Electronically (FIRE) system and replacing it with the Information Returns Intake System (IRIS). This is one of the most significant changes to electronic information return filing in decades.

Avalara Agentic Tax and Compliance™ solutions automate sales tax calculations, exemption certificates, and return filings across the U.S. Avalara also classifies tariff codes and calculates real-time customs duties at checkout and covers 192 value-added tax (VAT) jurisdictions.