March 2022 sales tax changes

Several changes affecting state or local sales and use tax compliance take effect March 1, 2022.

New local sales and use tax rates in Alabama

Effective March 1, 2022, Sheffield, Alabama, is increasing its general sales and use tax rate from 3.5% to 4%. The 0.5% increase also applies to the sales tax on admissions to places of amusement and entertainment as well as the retail selling price of food for human consumption sold through vending machines. Transactions occurring outside the corporate limits of Sheffield but within the police jurisdiction are taxed at half the listed rates.

The town of South Vinemont has a new 0.5% general sales and use tax starting March 1, 2022. The 0.5% sales and use tax also applies to the following:

• Admissions to places of amusement and entertainment
• Retail selling price of food for human consumption sold through vending machines
• Machines and parts and attachments for machines used in manufacturing tangible personal property

New prepaid wireless surcharge in Michigan

As of March 1, 2022, the prepaid wireless 911 surcharge in Michigan increases from 5% to 6% for any retail transaction.

New reporting requirements in Ogdensburg, New York

The city of Ogdensburg, New York (St. Lawrence County), will start collecting a local sales and use tax from businesses as of March 1, 2022. According to Ogdensburg City Manager Stephen Jellie, the combined state and local sales and use tax rate for Ogdensburg will remain 8%. “What will change is how the 4% local sales tax collected in the City is distributed between the County and City — which will now be 2% to the County and 2% to the City.”

Though consumers may not notice a difference at checkout, businesses must take note because the change brings new sales and use tax return reporting requirements. The New York State Department of Taxation and Finance explains: “Sales and uses within the city on or after March 1, 2022, must be reported on the Ogdensburg (city) entry line except as described in Tax Bulletin Transitional Provisions for Sales Tax Rate Changes (TB-ST-895).”

In a separate notice, the New York State Department of Taxation and Finance announced that as of March 1, 2022, Ogdensburg does not provide for the local sales and use tax exemption for clothing priced less than $110. A 4% Ogdensburg sales and use tax applies to clothing and footwear priced less than $110 per item or pair.

New York provides a state sales tax exemption for clothing and footwear priced less than $110 and for items used to make or repair eligible clothing. However, local governments can choose whether to provide the exemption for local sales and use tax, and most localities tax eligible sales rather than exempt them.

Change is always afoot when it comes to sales and use tax. Automating collection and remittance can facilitate compliance.

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