What’s New in Sales Tax? Updates Across the U.S.

Sales tax is constantly changing. From exemptions to digital products to new tax holidays, businesses across the U.S. face ongoing updates. Here’s a state-by-state review of the most recent sales tax changes and what they mean for compliance.

Louisiana Sales Tax Overhaul

Louisiana, one of the most complex states for sales tax compliance, introduced sweeping reforms in 2025.

• House Bill 578 (Act 384) – Signed June 20 and effective July, this overhaul redefines key terms, exemptions, and compliance procedures.
• Digital products count toward nexus – Sales of digital goods now count toward Louisiana’s $100,000 economic nexus threshold.
• Expanded exemptions – Include nonprofits, sickle cell organizations, Habitat for Humanity, osteopathic medical colleges, radiation therapy centers, and certain government transactions.
• Healthcare exemptions extended – Digital products and prewritten software used by licensed healthcare providers are exempt (retroactive to Jan. 1).
• Contractor exemptions – General and subcontractors can claim exemptions for purchases made for state/local governments with a certificate of exemption.
• Other changes – Expanded definition of “vessel,” exemptions for repairs on goods shipped out of state, and adaptive driving equipment.

Key takeaway for businesses: Digital sellers, contractors, and healthcare providers must review compliance procedures to avoid penalties under the new framework.

Missouri & Alabama Exempt Essential Products

• Missouri – Beginning Aug. 28, diapers, feminine hygiene products, and incontinence products are exempt from state and local sales tax. Businesses must report qualifying sales as a negative adjustment on August 2025 returns.
• Alabama – As of Sept. 1, HB 152 removes the 4% state sales tax on diapers, baby formula, wipes, maternity clothing, and menstrual hygiene products. Local governments may extend exemptions, but the law sunsets in August 2028.

Compliance tip: Retailers should update point-of-sale systems to reflect these exemptions and adjust filing processes.

Georgia: E-Signatures and Energy Exemptions

Georgia’s Department of Revenue issued two notable updates:

1. E-signature guidance – Acceptable forms now include typed names, scanned signatures, stylus input, or digital signature pads. Signatures must be verifiable, secure, and linked to their document to prevent tampering.
2. Energy exemption – Effective Oct. 1, manufacturers in certain jurisdictions face a 0% sales and use tax rate on energy purchases.

Florida: New Sales Tax Holiday on Hunting Gear

Florida launched a first-of-its-kind sales tax holiday on guns, ammunition, and hunting equipment. Running through the end of 2025, the holiday also applies to camping and fishing gear.

• Tied to the “Second Amendment Summer” initiative.
• Builds on Florida’s tradition of back-to-school and hurricane-prep tax holidays.
• Opponents argue many items qualify beyond hunting purposes.

Missouri Clarifies Contractor Rules

In Letter Ruling No. LR 8360, Missouri’s Department of Revenue clarified that roofing contractors:

• Are final users of materials in construction projects.
• Must pay sales tax on materials and rented equipment.
• Do not need a sales tax license unless making retail sales.

Impact: Out-of-state contractors working in Missouri should carefully review purchase and reporting rules to remain compliant.

Washington Expands Sales/Excise Taxes

Starting Oct. 1, Washington businesses face new sales and excise taxes on:

• Advertising services
• Live presentations
• IT services
• Custom website development

Concerns: Business groups warn vague language and short implementation timelines may cause compliance challenges.

Why It Matters for Your Business

If you sell digital products, healthcare software, essential goods, or provide services across state lines, these updates could significantly affect your compliance.

Contact TaxConnex to learn how we can serve as your outsourced sales tax department, helping you stay compliant with the latest state-by-state sales tax changes.