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Not So Temporary Sales Taxes

  • Oct 1, 2015 | Gail Cole

 Temporary sales taxes are frequently extended or made permanent.

A temporary sales tax in Brown County, Wisconsin was levied in January 2001 to fund the renovation of Lambeau Field (home to the Green Bay Packers). With renovations complete, the tax expires October 1, 2015.

Yet temporary sales taxes don’t always expire as planned. Many are extended, either to fund additional projects or to keep revenue rates steady. It turns out to be a challenge to make do with less when you’re used to having more.

According to an Urban Institute study from November 2014, among the 25 temporary tax increase measures enacted between 2008 and 2011, “about half were allowed to expire on schedule. The remaining measures were made permanent, modified and made permanent, or replaced with alternatives.” Nine of those were sales/excise taxes.

Expired as planned

Expired but replaced

  • California: The general sales tax rate increased from 6.25% to 7.25% April 1, 2009 - June 30, 2011, and then dropped back to 6.25% July 1, 2011 - December 31, 2012. Another temporary tax hike took effect January 1, 2013, raising the rate to 6.5%, where it is set to remain through December 31, 2016. There is talk of extending it.
  • Kansas: The state sales tax rate was increased from 5.7% to 6.3% in 2010. On July 1, 2013, the state rate dropped to 6.15%. And then on July 1, 2015, the state rate was increased to 6.5%.
  • North Carolina: The general rate of sales tax was increased from 4.5% to 5.5% effective September 1, 2009. On October 1, 2009, the rate was further increased to 5.75%. The rate dropped to 4.75% on July 1, 2011.

Extended or made permanent

  • Colorado: Lawmakers agreed to include tobacco products, including cigarettes, in the sales tax base. The measure… was initially set to expire after two years. In 2011 lawmakers extended the tax increase for an additional two years, and in 2013, sales tax on tobacco products was made permanent.
  • Hawaii: The lodging tax was temporarily increased by 1% on July 1, 2009 and again on July 1, 2010. Set to expire in 2015, it was instead made permanent.
  • Nevada: The general sales tax rate was increased from 5.85% to 6.85% in 2009. That temporary rate was extended twice and was set to expire July 1, 2015. It did not.
  • Oregon: A 50-cent surcharge on distilled liquor that took effect April 1, 2009 was initially set to expire June 30, 2009. It is now set to expire June 30, 2017.

The above are statewide changes. Throw local changes in the mix and rate extensions multiply. For example:

Whether they’re extended or expired, increased or reduced, tax rates change. Automated sales tax software as a service (SaaS) facilitates compliance in all states. Learn more.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.