Vertex 2022 Sales Tax Rates and Rules Report: Decline in Rate Changes Belies Increases Across Most Jurisdictions
KING OF PRUSSIA, Pa., Jan. 24, 2023 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company), a global provider of tax technology solutions, released its annual End-of-Year Sales Tax Rates and Rules report, which found that while the total number of transaction tax changes across the U.S. declined, most jurisdiction categories actually continued to see rate increases.
The overall number of sales tax rates and rules changes appears to have reached the lowest level in eight years with 542 changes at the state, county, city and district levels. But that total is skewed by a decline in only one category: new district taxes. After a five-year stretch during which an average of 180 new district-level taxes were created each year, that number declined to 115 this year.
Even though fewer districts were created in 2022, the increases to existing district tax rates outnumbered decreases by a ratio of three to one. Additionally, rate changes at other levels of government including city, state and local remained at record highs similar to the last few years. The county level posted a three-year high in 2022. And city rate changes remained at near all-time highs, matching their most recent five-year average.
“Sales tax rates will continue to increase. Governments need to fill budget gaps as Federal COVID-related funding will begin to run dry, as borrowing becomes more expensive and overall inflationary pressures on labor, services and consumables continue,” said Vertex Vice President of Tax Content and Chief Tax Officer Michael Bernard. “On top of these economic factors, sales tax is generally more efficient to impose and administer relative to property and income taxes, making it a more resilient revenue source for governments, particularly in times of economic distress.”
Beyond the broad numbers, the 2022 report showed several other interesting trends, including:
For the Vertex End-of-Year Sales Tax Rates and Rules Report for 2022, click here.
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