July 2022 sales tax rate changes

July means warm weather, cold drinks by the beach or pool, and tax rate changes across the country. Local sales and use tax rate changes will take effect in the following states on July 1, 2022.

• Arizona
• Arkansas
• Colorado (new retail delivery fee, changes for DTC compliance)
• Connecticut (suspension of motor fuels tax ends June 30)
• Florida
• Georgia   
• Hawaii
• Illinois (change in the motor fuel tax rate, plus the suspension of grocery taxes and the inflation adjustment to motor fuel tax)
• Indiana
• Kansas (plus the repeal of prepayment effective July 1)
• Kentucky (a planned gas tax hike is not going into effect July 1)
• Louisiana (including Harahan)
• Maryland (exempting certain baby items, nicotine patches, diabetic care, and oral hygiene, plus a change in motor fuel tax rates)
• Michigan
• Minnesota
• Missouri
• North Dakota
• Oklahoma
• Oregon
• Tennessee (gun sales tax holiday ends June 30 and tax rates will go back to normal starting July 1)
• Texas
• Utah
• Virginia
• Washington
• West Virginia
• Wyoming

Hydrogen purchased for use as a combustible fuel in manufacturing, processing, compounding, or producing tangible personal property is exempt from Florida sales and use tax starting July 1, 2022. If you qualify for the exemption, you must give the seller a valid exemption certificate.

This exemption doesn't apply to any firm regulated by the Division of Hotels and Restaurants of the Department of Business and Professional Regulation.

The Prairie State is one of just 13 states that tax groceries, but the new budget for FY 2023 includes a suspension of the 1% grocery tax from July 1, 2022, to July 1, 2023. Governor JB Pritzker is ensuring shoppers are aware of this suspension by requiring grocery stores to include the news on grocery store receipts.

Indiana’s new vape tax goes into effect July 1, 2022. The law establishes a new 15% sales tax for all vaping products. 

Indiana is the 31st state to tax vape products, which are under increasing regulation by the U.S. Food and Drug Administration. 

Effective July 1, 2022, diapers and feminine hygiene products sold or purchased for individual use are exempt from state sales and use tax in Louisiana.

Local sales and use taxes still apply unless exmpted by local ordinance. Some localities, including New Orleans, exempt or partially exempt diapers or feminine hygiene products from local sales tax. 

If you have an active account with the South Carolina Department of Revenue (SCDOR), you’ll need to make a habit of checking your email inbox for letters and notices. SCDOR is encouraging people to go green by automatically enrolling taxpayers in the department’s paperless mailing system. On and after June 27, 2022, SCDOR will electronically post most taxpayer letters and notices directly into MyDORWAY accounts.

Thanks to a new upload feature, many taxpayers will be able to securely upload and submit certain documents through the MyDORWAY system as well. If this option is available to you, SCDOR will let you know via electronic communication. Additional details are available on the SCDOR website.

Starting in July, certain everyday household items like baby bottles, diapers, car seats, dental hygiene products, and medical devices (including diabetic care equipment) will be tax exempt.

Following Governor Kim Reynolds signing Senate File 2367, the Iowa Department of Revenue has released updated guidance as it relates to changes to sales and use tax permit registration, return filing, and tax payment that take effect July 1, 2022. These changes include:

• Taxpayers will report sales and use tax on the same return and will only need one permit for both sales and use tax.
• Taxpayers will either file and pay monthly or annually, depending on the amount of tax collected.
• Monthly returns must be filed and tax must be paid electronically.
• Semimonthly deposit payments are no longer required.

Visit tax.iowa.gov/permit-changes to learn more about these changes, the new combined tax return, and answers to common questions.

Existing permit holders will still need to file a quarterly return for the second quarter of 2022 as they have in the past, due August 1, 2022. Existing permit holders will be notified by the Department of all changes to accounts in July.

Alabama

Back to school sales tax holiday, July 15–17, 2022

• Books priced $30 or less
• Clothing priced $100 or less
• Computers, computer software, and school computer supplies priced $750 or less
• School supplies priced $50 or less

Florida
Event tickets and recreation equipment state sales tax holiday, July 1–7, 2022

Children's diapers; baby clothes and footwear state sales tax holiday, July 1, 2022–June 30, 2023

Energy Star appliances state sales tax holiday, July 1, 2022–June 30, 2023

Impact-resistant windows, doors, and garage doors state sales tax holiday, July 1, 2022–June 30, 2024

Back to school state sales tax holiday, July 25–August 7, 2022

Mississippi
Back to school sales tax holiday, July 29–30, 2022

• Clothing and footwear priced less than $100
• Specific school supplies priced less than $100
• Applies to state and local sales tax

Puerto Rico
Back to school sales tax holiday, July 2022, July 15–16

• School materials
• School uniforms and footwear

Tennessee
Sales tax holiday, July 29–31, 2022

• Apparel priced $100 or less 
• Computers, laptops, and tablets priced $1,500 or less (excludes software)
• School and art supplies priced $100 or less
• Applies to state and local sales tax; participation is mandatory for merchants selling qualifying items

Read about all the state sales tax holidays coming up in 2022 here.

This post was updated July 1, 2022.