In the state tax world, the beginning of the year means new legislation goes into effect. Are you curious about which laws changed at the beginning of the month? Keep reading for eight states with new and updated sales tax laws you won’t want to miss.
Georgia: 529 Plan State Tax Update
For Georgia residents using a 529 Plan to save for college expenses, state tax deductions will double to be:
- $4,000 per child for single taxpayers
- $8,000 per year for those filing jointly with a spouse
This deduction will be available beginning with the 2020 tax year.
Illinois State Taxes: Cannabis, Parking & Vehicle Trade-Ins
Although Illinois isn’t the first state to legalize marijuana, it is the first to adopt the law through the legislature rather than voter initiatives. The state’s taxes on cannabis include:
- Sales taxes of 7 percent on wholesale sales made to dispensaries
- Retail excise taxes of 10, 20 or 25 percent depending on THC content or product type
- Local option taxes of up to 3 percent (which don’t take effect until July of this year)
Illinois has also implemented a new excise tax for drivers parking in a designated space, garage or other area:
- Hourly, daily or weekly parking spaces are subject to a 6 percent tax
- Monthly or annual spaces are subject to a 9 percent tax
Finally, the state is also imposing a sales tax on any vehicle trade-in more than $10,000.
Louisiana: State Tax on CBD Products
Although recreational cannabis is still illegal in Louisiana, the state did just apply a 3 percent excise tax to all CBD products.
Maine & New Hampshire State Taxes: Vapor Products
Maine and New Hampshire just implemented state taxes on vapor products:
- In Maine, e-cigarettes are now taxed as “other tobacco products” at a rate of 43 percent of the wholesale price.
- In New Hampshire, closed cartridge devices are taxed at 30 cents per milliliter of liquid containing nicotine and open system products are taxed at 8 percent of the wholesale price of the container that contains the nicotine.
Ohio & Virginia: No More Pink Tax
Rather than adding a tax, Ohio is removing one and Virginia reduced one. Commonly known as the “Pink Tax,” the Buckeye State is repealing the state tax on feminine hygiene products (although not until April 1 of this year) and Old Dominion reduced the state tax on essential personal hygiene products to 2.5 percent (down from 5.3 to 7 percent depending on locality). About a dozen other states have recently removed this tax as well.
Utah: Updates to a Variety of Sales Taxes
Utah has implemented or made changes to quite a few state taxes, some of which will affect remote sellers:
- A new excise tax on diesel fuel
- New sales tax to motor and special fuel (other than diesel)
- New sales tax on fees to access digital products and services
- Broader sales tax on many services (including dating referrals, personal transportation, pet boarding and grooming, etc.)
- Removing sales tax exemptions (such as electricity to a ski resort to operate a passenger ropeway)
- Adding an exemption for sales tax on menstrual products (eliminating the “Pink Tax”)
- Increasing sales tax on groceries
- Increasing tax on vehicle rentals
You can read more about these changes on Avalara.
Do You Have State Tax Questions? We Can Help!
It can be hard to keep up with all the changing state tax laws. The good news is we can help! If you have questions about how the various legislation may affect your business, want to know which sales tax provisions you’re responsible to collect and remit or need a plan for compliance, we can help! Contact us today to get started.
