October 2026 tax updates

Numerous state sales tax updates take effect October 1, 2026. Read on to learn about new rates, exemptions, and rules that may impact your sales tax compliance in October 2026.

• Notable October 2026 sales tax changes include a new sales tax rate for Washington, D.C., and local sourcing rule changes for Allegheny County and Philadelphia, Pennsylvania.
• Illinois is wrapping up its remote retailer amnesty program on October 31, 2026. Qualifying retailers still have time to apply for amnesty.
• Utah is taxing material harmful to minors starting October 1, 2026. This is the first tax of its kind.

Read on for details.

A new state excise tax on consumable vapor products takes effect in Alabama on October 1, 2026, under Act 2025-377. The tax is 10 cents per milliliter on all consumable vapor products sold at wholesale or imported into Alabama for use, consumption or retail sale.

Starting October 1, 2026, Arizona HB 2786 exempts from transaction privilege tax the lease or rental of required college textbooks from a bookstore. The sale (as opposed to lease or rental) of required college textbooks was already exempt from TPT.

The general sales and use tax rate in Washington, D.C. will jump from 6% to 7% effective October 1, 2026.

D.C.’s sales and use tax rate increase was scheduled to take effect on October 1, 2025, but Congress didn’t approve the rate change as required.

The Illinois Remote Retailer Tax Amnesty Program that began on August 1, 2026, will conclude on October 31, 2026. See the Illinois Department of Revenue for more details.

The Pennsylvania Department of Revenue will enforce destination sourcing rules for local sales tax for Allegheny County and Philadelphia starting October 1, 2026. Learn more about the Pennsylvania sales tax sourcing changes.

Under Public Chapter 1014, Tennessee counties with a metropolitan form of government may adopt a resolution to exempt or eliminate their local option sales and use tax on retail sales of food and food ingredients on or after October 1, 2026. The 4% state sales and use tax on food remains in effect.

Davidson County, home to Nashville, is the first county to exercise this option. It will lower its local food tax from 2.25% to 1.75% starting November 1, 2026.

Effective October 1, 2026, Utah levies a 2% tax on digital content harmful to minors, as defined in UCA §78B-3-1001. This tax affects businesses required to perform age verification under UCA §78B-3-1002 that file a Utah Sales and Use Tax Return.

Nevada’s National Guard tax holiday kicks off on October 30, 2026, and will run through November 1, 2026.

Various local sales and use tax rate changes and/or jurisdictional boundary changes take effect on October 1, 2026, in the following states. Click on the links for details.

• Arizona
• Arkansas
• California
• Georgia
• Kansas
• Louisiana
• Minnesota
• Missouri
• North Dakota
• Ohio
• Oklahoma
• Texas
• Utah
• Vermont
• Washington

Local sales tax rates are changing with the seasons in the following Alaska jurisdictions:

• Craig (from 7% to 6%)
• Excursion Inlet (from 4.5% to 2.5%)
• Haines Borough Township (from 7% to 4.5%)
• Haines Rural (from 5% to 3%)
• Ketchikan (from 5.5% to 3%)
• Pelican (from 6% to 4%)
• Seldovia (from 6.5% to 2%)
• Sitka, the borough and the city (from 6% to 5%)
• Skagway, the borough and the municipality (from 5% to 3%)

Similarly, South Dakota’s seasonal tourism tax is suspended starting October 1, 2026. It will be resurrected on June 1, 2027.

Businesses are required to comply with applicable tax changes, and staying on top of them can be challenging. Avalara can help.

“We trust Avalara over AI/ChatGPT to look up tax rates because Avalara knows our business,” says Patty Martyn, Tax/Accounting Manager at ClickBank. “We’re partners in ensuring that we collect and remit the right sales tax at the right time and place.”

See if automating sales tax calculations with Avalara AvaTax is right for your business.

How does Pennsylvania’s sales tax sourcing rule change affect businesses on October 1, 2026?

Starting October 1, 2026, Pennsylvania is enforcing destination sourcing for local sales tax in Allegheny County (1%) and Philadelphia (2%). All registered businesses, whether located in Pennsylvania or selling remotely, must now collect local sales tax based on the delivery address.

What is the deadline and eligibility for the Illinois remote retailer tax amnesty program?

The Illinois remote retailer tax amnesty program concludes October 31, 2026. Under the terms of the amnesty, qualifying remote sellers with economic nexus in Illinois between January 1, 2021, and June 30, 2026, can settle past liabilities at a simplified tax rate (9% general, 1.75% qualifying food) with 100% of interest and penalties waived.

Who must pay Utah’s new tax on content harmful to minors starting October 1, 2026?

Effective October 1, 2026, Utah levies a 2% excise tax on gross receipts from selling, distributing, or offering subscriptions to digital content harmful to minors. The tax applies to businesses required to perform commercial age verification under UCA §78B-3-1002. See the Utah Tax Commission for more details.