So far this year, multiple states have introduced new exemptions including some on necessities and at least one proposed tax credit on a politically charged kitchen appliance. Among the new laws:
Virginia’s sales tax on groceries dropped to 1% from 2.5% starting Jan. 1.
Kansas began applying a preferential sales tax rate to groceries; the state sales tax on groceries is scheduled to phase down to 4% this year and 2% in 2024 before hitting zero in 2025. (Walmart, incidentally, has admitted that some of its Kansas stores charged too much sales tax right after the law started.)
For the people
Tax breaks trumpeted by politicians also show no sign of letting up.
Part of the new $114.8 billion “Framework for Freedom” budget proposal from Florida Gov. Ron DeSantis, for example, includes permanent sales tax exemptions on baby necessities like strollers and formula, as well as on OTC pet meds and on gas stoves.
“[Pets] are part of our families, too," DeSantis said. "And then we just added, because I think it needs to be done, no tax permanently on gas stoves … They want your gas stove, and we're not going to let that happen."
In South Dakota, however, Rep. Gov. Kristi Noam is getting pushback from GOP lawmakers on her plan – long championed by state Democrats – to repeal the state grocery tax. Noem says cutting the tax, which brings in more than $100 million annually, would help household budgets squeezed by inflation.
Republican lawmakers are proposing alternative tax cuts, such as scaling back the sales tax and property tax. Other lawmakers say the state’s needs leave no room for tax cuts at all.
If you think your business may be impacted by sales tax developments, contact TaxConnex. TaxConnex provides services to become your outsourced sales tax department. Get in touch to learn more.