2021 Sales Tax Changes Report: Midyear Update
Tax Compliance Guide for Businesses
Microscopic virus? Enormous container ship? Unexpected sales tax policy? Whatever the world throws at us next, every business should ready itself to meet it head-on.
After a difficult 2020, 2021 began on a hopeful note: COVID-19 vaccines promised a return to normalcy; the stock market was at an all-time high; and many states discovered they had more revenue than anticipated. Indeed, California is now predicting a $75.7 billion surplus for budget year 2020–21.
Yet there’s an elephant in the room (or a ship in the canal?): Coronavirus variants are driving a surge in cases; more than 11 million people in the United States couldn’t work in March 2021 because their employer closed or lost business due to the pandemic; and inequity and opportunity gaps are broadening.
No one knows how long COVID-19 will play the puppeteer, or what that will mean for the economy. Nonetheless, lawmakers must do what lawmakers do — legislate on tax and policy matters to the best of their ability — and everyone else must deal with the fallout.
Unprecendented Rate of Change Impacts Sales and Use Tax
Last year’s unprecedented rate of change across the global economy greatly affected sales and use tax in the United States — and 2021 is showing signs of a similar trend. In the first half of the year, some states extended tax relief efforts, others adopted economic nexus laws, and still others started taxing digital advertisements. Even more changes are slated for the rest of the year.
Here are just some of the changes that happened during the first half of 2021:
- California extended COVID-19 tax relief
- Colorado and Maryland decided to tax digital products
- Florida adopted economic nexus and a marketplace facilitator law
- Kansas lawmakers overrode a veto to tax remote sales
- Nevada and Pennsylvania offered tax amnesty
The midyear update to our 2021 sales tax changes report delves into these changes and more. And since tax compliance goes beyond sales and use tax, we’ll also highlight key developments in industries including Communications and Hospitality.
Download the report from Avalara to learn more.