July 2024 sales tax changes

The Colorado retail delivery fee rate is increasing from 28 cents to 29 cents as of July 1, 2024. This new rate means a bigger bite for businesses that eat the fee instead of passing it on to customers.

Additionally, Minnesota is implementing a new 50-cent retail delivery fee starting July 1, 2024. The retail delivery fees in Colorado and Minnesota are similar but not the same. Here’s what you need to know.

Effective July 1, 2024, remote sellers no longer need to count their sales into North Carolina or Wyoming. Both states have eliminated their transaction threshold for economic nexus.

Effective July 15, 2024, there is a new exemption for the sale, purchase, use, storage, consumption, installation, repair, and replacement of data center equipment in Kentucky. This exemption is limited to sites within a consolidated local government having a population equal to or greater than 500,000. 

Maryland taxes home amenity rentals

Maryland sales and use tax applies to home amenity rentals starting July 1, 2024. The rate is 6% of the taxable price.

A home amenity is any portion of a residential property occupied by the hour for not more than 15 consecutive hours. Examples of home amenity rentals include backyard swimming pools, backyard pickleball courts, and an apartment building’s clubroom or rooftop deck.

A home amenity does not include bedrooms or any portion of a residential property intended for sleeping quarters. 

Tennessee taxes books and magazines by certain out-of-state sellers

Books and magazines sold to consumers in Tennessee and shipped by mail or common carrier, where the seller has limited activities in Tennessee, are no longer exempt. These transactions are subject to Tennessee sales and use tax as of July 1, 2024.

Tennessee is also eliminating an exemption for sales by a person solely engaged in cooperative direct mail advertising (i.e., combined mailings of discount coupons and advertising leaflets for multiple businesses) distributed in Tennessee. 

Vermont taxes software as a service (SaaS)

In 2015, Vermont Act 51, Section G.8, created a sales and use tax exemption for prewritten computer software accessed remotely via the internet. Other computer software remained taxable.

The recent enactment of H.887 repeals that exemption. Effective July 1, 2024, Vermont sales and use tax applies to prewritten computer software accessed remotely via the internet. This tax primarily affects software as a service cloud applications.

States often offer tax relief when severe weather interferes with filing or paying taxes on time. Currently, disaster relief for taxes is available in at least three states: Iowa, Kentucky, and Rhode Island.

Taxpayers located in many parts of Iowa may be eligible for tax relief due to severe storms, flooding, and tornadoes. 

Kentucky is providing disaster relief for Boyd, Carter, Fayette, Greenup, Henry, Jefferson, Jessamine, Mason, Oldham, Union, and Whitley counties. Residents may be able to obtain a refund of sales and use tax paid for building materials permanently installed in the repair or replacement of buildings damaged in counties covered under a federal disaster relief declaration. 

Rhode Island has also extended some due dates for taxpayers affected by severe storms and flooding. See ADV 2024-16 and ADV 2024-17 for more details.

See the IRS for more information about state disaster relief provisions.

A number of states have tax-free weekends or longer sales tax holidays this month. For 2024, the dates for the Ohio sales tax holiday and Mississippi tax-free weekend have changed.

• Alabama back-to-school sales tax holiday, July 19–21, 2024

• Florida 2024 Freedom Month sales tax holiday, July 1–31, 2024

• Florida back-to-school sales tax holiday, July 29–August 11, 2024

• Mississippi moved its sales tax holiday from the last Friday in July to the second Friday in July. It will take place July 12–14, 2024.

• Ohio broadened its sales tax holiday to include more items and a higher price cap. It also extended the tax-free event. It normally starts the first Friday in August, but for 2024, it runs July 30 through August 8. 

• Puerto Rico back-to-school sales tax holiday, July 19–20, 2024

• Tennessee sales tax holiday, July 26–28, 2024

Learn more in our 2024 sales tax holidays blog.

California is making it more difficult for businesses to spring unexpected fees on their customers. Effective July 1, 2024, it’s illegal for businesses to advertise or list a price for a good or service that does not include all required fees or charges, with the exception of government-imposed taxes or fees and reasonable shipping costs. Though it’s often in a business’s best interest to be upfront about taxes, the listed or advertised price shown to California consumers doesn’t need to include sales tax.

Starting July 1, 2024, all new businesses registering with Virginia Tax will need to do so online. 

Tennessee has adopted new sourcing rules and clarified which state’s tax is due on certain sales. 

There are local sales and use tax rate changes in the following states:

• Alabama

• Arkansas

• California

• Colorado

• Georgia

• Illinois

   

  • General sales tax rate changes

  • Sales tax rate changes for aviation fuel

  • Motor fuel use tax rate changes

  • Municipal motor fuel use tax rate changes

• Indiana (gasoline use tax rate)

• Iowa

• Kansas

• Louisiana

• Maryland (the rate for electronic smoking devices jumps from 12% to 20%)

• Massachusetts (change to the meals tax account type)

• Michigan (new prepaid sales tax rates on gasoline and diesel fuel)

• Minnesota

• Mississippi (new sales tax rate for equipment and services used in connection with mineral resources)

• Missouri

• New Mexico

• North Carolina

• North Dakota

• Ohio

• Oklahoma

• South Dakota

• Texas

• Vermont

• Washington

• West Virginia

• Wyoming