New 2026 Sales Tax Rates & Jurisdiction Updates

As 2026 approaches, businesses across the U.S. are preparing for another round of local sales tax rate increases, jurisdiction boundary adjustments, and special district changes. These shifts—often driven by voter-approved measures, expiring levies, municipal funding needs, and state-level legislative changes—can directly impact how companies calculate, collect, and file sales tax.

For businesses selling into multiple states (and especially those operating in thousands of local jurisdictions), small changes in city, county, or special district taxes can create compliance challenges. Staying ahead of these updates is not just good practice, it’s essential for preventing misapplied rates, amended returns, audit exposure, and penalties. This is one reason many companies are turning to outsourced sales tax solutions providers, such as SalesTaxSolutions.US, to help them stay compliant, informed, and efficient.

In this article, we outline 2026 sales tax rate and jurisdiction changes, explain why these adjustments happen so frequently, and provide guidance for businesses to navigate the evolving sales tax environment with confidence.

Key Takeaways

• Several local sales tax rate and jurisdiction changes are scheduled to take effect January 1, 2026 — including new local option/resort taxes, transit taxes, and general rate increases.
• Local rates change frequently. Cities/counties use local taxes to fund specific projects (roads, transit, public safety, and tourism infrastructure).
• State laws and voter decisions alter local taxing authority.
• If you sell into many jurisdictions, missing a local change can mean charging the wrong rate, incorrect returns, and penalties. Outsourcing sales tax monitoring and filing reduces risk and is increasingly more cost-effective.

Local Sales Tax Rate Increases & Jurisdiction Changes: What to expect for 2026

As we approach 2026, state tax agencies and local governments have issued dozens of notices that will change the combined sales tax consumers see at checkout. The changes take common forms:

1. New or increased local taxes imposed by city or county ballot or ordinance.
2. Expiration of special local levies.
3. State law changes that repeal certain taxes (example: state grocery taxes).
4. Annexations of municipalities that can change local tax rates.

Below are some examples of local sales tax changes already announced to go into effect 2026:

Utah—multiple municipal adjustments

The Utah State Tax Commission has published rate changes effective Jan. 1, 2026:

• Monticello’s combined sales tax rate will decrease as botanical/cultural/zoo levies expire.
• Big Water and Torrey will begin imposing a resort communities tax (up to 1.1%), raising combined rates. Certain sales are exempt from this tax, including motor vehicles and modular or manufactured mobile homes.

Illinois—local continuation of the 1% grocery tax and general rate increases

Illinois passed legislation that ends the statewide 1% grocery tax but permits municipalities to keep a local 1% grocery/ food tax. Several cities (e.g., Bethalto, Madison County, Alton, and others) have voted or considered keeping the tax.

In addition to the consideration of grocery tax, a great many cities and jurisdictions in Illinois will increase their general sales tax rates beginning January 1, 2026. A full list of these jurisdictions and their new rates can be found here.

District of Columbia—OTR notice including 2026 changes

The DC Office of Tax and Revenue published a broad Notice of Oct. 1, 2025 Tax Changes that includes sales & use tax items relevant to FY2026 and 2027 planning. Highlights sellers should note:

• The general DC sales tax rate remains at 6.0% through Sept. 30, 2026, and is scheduled to increase to 7.0% for periods beginning Oct. 1, 2026.
• The hotel/lodging surtax temporary increase is extended through Sept. 30, 2027.

Washington State—Quarter 1 list of changes

The Washington Department of Revenue publishes quarterly local sales and use tax lists and change notices. The Quarter 1 (effective January 1, 2026) materials include dozens of local levies, new local law enforcement programs, transportation district levies, and lodging tax updates.

The DOR provides XLSX flyers and a searchable lookup app to be aware of new rates before year-end.

Arkansas—annexations & statewide food tax repeal

Arkansas’ local tax updates effective January 1, 2026, include annexation-driven local rate changes across many cities and a statewide repeal of the food tax:

• Food tax rescinded statewide (food drops to 0%), which changes overall taxability for grocery sellers.
• Numerous city annexations or boundary updates change the local rates. Examples include:
  • Little Rock annexed at a 1.125% local tax rate
  • Springdale and Ward annexed at 2%
  • Sharp County’s sales tax rate is decreasing to 1.25%

Minnesota—local sales tax notices (several new starts effective Jan. 1, 2026)

The Minnesota Department of Revenue’s Local Sales Tax Notices page lists many local tax starts and changes. These mostly include lodging and transit levies, which are scheduled to start January 1, 2026:

• Faribault and Richfield will start a 3% lodging tax
• Martin and Sibley County will begin 0.5% transit sales and use tax

How to find these changes

State revenue departments and local governments routinely publish lists of rate changes a couple of months before next quarter implementation (see state tax commission bulletins and local council minutes). Sellers should routinely expect city/county changes each year, and even quarterly.

Why Local Sales Tax Rates Change Frequently

Local sales taxes are a flexible revenue tool for municipalities. The main drivers of frequent change are:

• Purpose-driven levies: Local governments adopt taxes earmarked for specific projects (e.g., transit, roads, schools, tourism promotion, law enforcement). When the funding need ends the tax may cease, or when new needs arise a new levy may be adopted.
• Voter approval: Most local taxes require voter approval or local ordinance changes. This process naturally produces frequent, small changes across many jurisdictions, especially around local voting seasons.
• State law changes and administrative reallocation: States can change whether certain taxes are collected at the state or local level (or allow locals to opt in/out). The Illinois grocery tax illustrates how a state decision can produce a patchwork of local choices.
• Economic and fiscal pressures: Recessions, growth, infrastructure needs, or property tax constraints cause cities and counties to turn to sales taxes to stabilize revenues.

What Local Sales Tax Revenue is Commonly Used For

Local legislation typically puts sales tax proceeds toward things that are of use to residents, and which improve city/county infrastructure or programs. Examples include:

• Roads, bridges and transportation projects
• Public safety and first responder funding
• Tourism and resort area infrastructure
• Parks, cultural institutions, zoos and recreation
• Economic development, debt service, and municipal operations

Why These Changes Matter to Sellers, Especially Multi-State Filers

• Combined rates vary by ZIP: A single ZIP code can cross multiple taxing jurisdictions (city, county, transit district). That means the combined rate at the point of sale can change even if the state rate remains static.
• Product/service taxability differences: Some jurisdictions tax items differently (e.g., groceries, prepared food, lodging, energy). When local taxes are created, increased, or repealed, the taxability rules change, which require sellers to update their tax matrix or POS systems.
• Filing & remittance complexity: New local levies may require new registrations or collections. Missing a new sales tax rate can mean inaccurate returns and potential penalties.

How Outsourcing Sales Tax Compliance Helps

Managing hundreds or thousands of taxing jurisdictions is time-consuming and rife with potential error. Outsourcing to a specialized provider can bring these advantages to your tax obligations:

• Continuous monitoring: Providers track state bulletins, municipal ordinances and effective dates so you don’t miss changes.
• Zip+4 / jurisdiction mapping expertise: Properly applying the correct combined rate at checkout and on returns requires accurate jurisdiction assignment, which a sales tax specialist can help with.
• Automated returns and remittance: Outsources can file complex returns across multiple jurisdictions and states on your behalf, reducing administrative burden.
• Consulting on nexus, registration and audit defense: For growing, multi-state businesses, expert help reduces the risk of noncompliance and unexpected liabilities.

If you are a multi-state seller or you are simply overwhelmed with sales tax, outsourcing is a cost-effective way of staying compliant. Join SalesTaxSolutions.US today to for the solutions to your sales tax obligations—from nexus determinations, to regular filings, notice handling, and more.