Vertex has released their 2024 Year-End Sales Tax Rates and Rules report highlighting significant shifts in local tax structures and the growing complexity of tax compliance for businesses, demonstrating how local governments across the U.S. are navigating economic pressures. Highlights of the report include:
- Record District Tax Growth: 171 new district taxes were added in 2024 – the third-highest total in seven years – while city-level tax rate changes soared to 251, up 30% from 2023.
- Shifting Tax Strategies: The number of district tax rate decreases outpaced increases, a rare trend signaling evolving fiscal management approaches at the local level.
- State-Level Uncertainty: The average state sales tax rate dropped to a 10-year low (5.4%), but with pandemic-era federal funding expiring and a new presidential administration prompting uncertainty, states may begin looking to alternative tax revenue sources in 2025.
- Global Tax Trends: Countries worldwide are expanding digital tax policies and accelerating e-invoicing mandates, increasing compliance complexity for businesses.
Keeping up with the latest tax rate changes and regulatory updates is crucial for compliance and optimizing tax strategies in an ever-changing landscape. One good way to ensure you do that is by reviewing the full Vertex report which can be found here.