Business
Vertex 2023 Sales Tax Rates and Rules Report: U.S. Rate Changes Reach 10-Year High
KING OF PRUSSIA, Pa., Jan. 24, 2024 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company”), a global provider of tax technology solutions,
About this update from Vertex, Inc.
[{"type":"text","content":"KING OF PRUSSIA, Pa., Jan. 24, 2024 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company”), a global provider of tax technology solutions, released its annual 2023 End-of-Year Sales Tax Rates and Rules report, which found U.S. sales tax rate changes reached a 10-year high, proving once again that it will be challenging for businesses to meet their everchanging compliance obligations. In 2023, businesses faced 444 sales tax rate changes spanning state, county, city and district jurisdictions, marking a 17% rise from last year's combined rate changes. This surpasses the former record of 412 rate changes witnessed in 2017. Beyond that, the total number of rate changes combined with jurisdictions imposing new sales taxes (amounting to 676 in 2023) is second only to the 724 changes and new sales taxes that occurred in 2017. “Tax professionals must anticipate and stay ahead of these changes by monitoring what's driving them and understanding their potential implications on the future of the indirect tax landscape,\" said Michael Bernard, Vertex Chief Tax Officer. \"This is increasingly important given the escalating complexity of the tax environment both domestically and internationally.\" The record number of U.S. sales tax rate changes in 2023 caps a decade-long trend. On closer examination, a distinction in rate changes becomes evident. State sales tax rates have held steady or decreased slightly in the past several years, while the number of new district taxes has ranged from 115 to a staggering 237 in the past decade. Last year, rate increases outnumbered rate decreases at the county level by a 2:1 ratio. At the city level, rate increases outnumbered rate decreases by 5:1. Jurisdictions at the local level are particularly challenged due to historic pandemic spending costs and inflation. Though the dynamics and trends shaping the changes in sales tax rates are intricate, they can be traced back to several broader concepts, which include: Current state fiscal conditions appear unsustainable: As a result of several years of pandemic-related federal relief, state and local budgets are generally in excellent condition. Signs suggest that fiscal conditions may deteriorate. These include a shrinking sales tax base and widespread cuts to other funding sources coupled with the end of federal pandemic funding and the gr...