The 2026 Sales Tax Year in Review

The 2026 Sales Tax Year in Review

PR Newswire

BOULDER, Colo., Nov. 4, 2026 /PRNewswire/ — For ecommerce sellers, 2026 brought some welcome changes to sales tax, along with new rules to work through. Some states removed registration thresholds and added programs to resolve unpaid taxes, while others expanded taxes on software and digital products. TaxValet’s Sales Tax Year in Review explores the year’s major developments, what they mean for businesses, and how to prepare for 2027.

2026 Sales Tax Trends

Read the full blog here: The 2026 Sales Tax Year in Review

Simpler Rules for High-Volume Sellers

Businesses with many sales on lower-priced items got some relief this year. Illinois removed its 200-transaction threshold on January 1, and Kentucky followed on August 1. Both states now use a $100,000 sales threshold for economic nexus, so order volume alone no longer triggers that requirement.

More Software Becomes Taxable

States are expanding their sales tax base to include software and digital products. Starting January 1, 2027, California will tax prewritten software and Software as a Service (SaaS), but custom software will stay tax-exempt.

Similarly, Kentucky clarified how its existing rules apply to AI. Prewritten software will still be taxed, even if its AI features change based on user preferences. Also, starting August 1, data brokering is taxed as a service.

Digital Advertising Taxes Face Legal Challenges

Many states looked into taxing digital advertising; however, Maryland’s existing digital ad tax faced another setback. On August 14, the Maryland Tax Court ruled against the tax in cases brought by Apple, Google, and Peacock, ordering refunds.

The court found that the tax violated federal law and constitutional protections. Its treatment of online advertising and use of worldwide revenue to determine tax rates raised questions for other states considering similar measures.

Getting Ready for 2027

TaxValet’s review highlights a few things businesses can do to prepare for 2027:

  • Review sales by state quarterly to monitor nexus obligations.
  • Check software and digital product tax codes against applicable state rules.
  • Use full street addresses to calculate local tax rates.
  • Keep resale certificates and sales records organized for an audit.

Help With the Ongoing Work

Keeping up with these changes takes time from busy teams. Each new rule can mean another registration review, product update, or adjustment to how tax gets calculated.

TaxValet’s Fractional Sales Tax Department manages sales tax from start to finish for a fraction of the cost of one internal sales tax specialist. Businesses can book a free consultation to discuss their sales tax needs for now and 2027.

Media Contact: Candice Lee Sparks, Digital Marketing Manager at TaxValet
Email: marketing@thetaxvalet.com
Phone: (720) 432-9021

TaxValet Logo

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/the-2026-sales-tax-year-in-review-302918190.html

SOURCE TaxValet