AVALARA TAX CHANGES 2026

Learn how new policies impact tax compliance.

Keeping up with tax rule changes doesn’t have to be a grind. In our 10th annual Avalara Tax Changes report, tax professionals and Avalara experts share insights on emerging compliance trends to help you stay on top of your tax obligations.

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Customer testimonial

“The annual Avalara Tax Changes report is our go-to source for information regarding the ever-changing tax landscape. We look forward to the information it provides … keeping us in compliance and aware of the many changes.”

Kurt Toliver
CFO at Asurvio

Here’s a taste of what you’ll find in the full report

New sales tax and tariff trends

Taxing more, exempting less

At least nine states expanded their sales tax base in 2025. To increase revenue, other states are looking to tax more goods and services in 2026.

Taxing B2B services

Maryland and Washington began taxing numerous B2B services in 2025, and Texas expanded its tax on data processing. Each tax policy creates a unique set of compliance challenges.

Increasing tariffs, ending de minimis

Between January 1 and September 30, 2025, the total number of tariff rates worldwide increased by almost 3 million. Meanwhile, the U.S. ended its exemption for low-value goods, and the EU and U.K. will likely do the same.

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Insights from tax experts

The next sales tax frontier is digital

“Debates over what counts as tangible property versus what’s considered a digital service will define how states expand their tax base. All eyes are on jurisdictions like Washington and Maryland.”

Amanda Denniston
Government Relations Manager at Avalara

Physical presence still matters

“There are businesses that still don’t realize physical presence creates nexus. They think they have no sales tax obligation so long as they don’t meet a state’s economic nexus standards.”

Lauren Stinson
Partner at Cherry Bekaert Advisory

Stacking tariffs complicate compliance

“When tariffs stack, it’s often unclear whether each tariff applies to the base product price or the cumulative price that includes prior tariffs. Misinterpreting whether tariffs are additive or compounded can cause underpayment or overpayment.”