Sales Tax Proposals to Watch in Summer 2026

Updated May 26, 2026

Sales tax changes don’t just happen at the rate level—some of the most impactful shifts come from proposals that redefine what’s taxable, eliminate long-standing exemptions, or upend an entire state’s tax structure.

From coast to coast, state legislatures are actively debating proposals that could reshape how businesses collect, report, and remit sales tax. Whether you sell physical products, digital services, or SaaS, at least one of the proposals below deserves a spot on your radar for summer 2026.

Here’s a look at the most significant sales tax proposals and developments businesses should be tracking right now.

FAQ About Sales Tax Proposals

Virginia: Data Center Sales Tax Exemption on the Chopping Block

Virginia is reconsidering one of its most valuable tax incentives. Current budget proposals would either eliminate the state’s sales and use tax exemption for qualifying data center equipment and software beginning in 2027, or maintain it until 2035 with added environmental and energy efficiency standards.

Virginia has been a major hub for data center development, largely due to this exemption. Eliminating it could impact long-term investment strategies and risk future development of data centers. However, with the state waiving $1.96 billion in sales taxes from data centers in 2025 alone, the return on that investment is being challenged.

With both chambers still negotiating, this remains a high-stakes proposal for data center operators and vendors alike.

Colorado: New 20-Year Sales Tax Exemption for Data Centers

While Virginia considers rolling back incentives, Colorado is moving in the opposite direction. HB26-1030 proposes a 100% state sales and use tax exemption on qualified data center purchases for up to 20 years, with a possible extension.

This proposal continues a long-standing trend of aggressive competition between states to attract large-scale infrastructure projects.

The bill remains under legislative review, making it one to monitor for companies in tech and infrastructure sectors.

Update: HB26-1030 has been postponed indefinitely after failing 11-2 in the House Energy and Environment Committee.

Alaska: Statewide Sales Tax Proposal Gains Traction

Alaska is one of the few states without a statewide sales tax—but that could change. A newly introduced proposal from the Office of Governor Mike Dunleavy would implement a seasonal statewide sales tax, with rates of:

• 2% (October–March)
• 4% (April–September)

Several local jurisdictions in Alaska already impose their own seasonal sales taxes, but if SB 227 passes, the state would take over. This would mean a new set of rules for what’s taxable and what’s exempt, variable rates throughout the year, and a shift in how collected revenue is distributed.

For remote sellers, this could mean entirely new registration and reporting obligations at the state level.

Missouri: Expanding Sales Tax to Eliminate Income Tax

Missouri lawmakers are advancing a proposal that could significantly broaden the state’s sales tax base. The plan would allow expansion of sales and use tax to additional goods and services as part of a broader effort to phase out the state income tax.

This type of structural shift could bring currently non-taxable services into scope, introduce taxes that haven’t existed in the state before, and likely raise combined state and local sales tax rates—which are already ranked 12th highest in the nation.

As of early May 2026, the proposal has cleared Missouri House and is in the hands of the Senate. Governor Kehoe must decide by May 22 whether to place it on the August 4 primary ballot, or wait for the general election.

Update: On May 22, 2026, Governor Mike Kehoe decided that this proposal will be on the Missouri August 2026 ballot.

Minnesota: Sales Tax on Advertising Services

Like many before it, Minnesota is considering extending the state’s sales tax to a wide range of advertising services. Senate File 4878 / House File 4343 would apply to billboard advertising, design services, digital marketing, and potentially even social media advertising.

The proposal is part of a broader push to expand Minnesota’s sales tax base to services, paired with a small reduction in the overall state sales tax rate. Supporters argue it modernizes an outdated tax structure. Opponents warn it would raise advertising costs for small businesses and prompt social media platforms to limit advertising features in the state.

The outcome of the bill is uncertain, but it’s worth watching closely if your business advertises in Minnesota.

Ohio: Property Tax Abolishment Could Force a Sales Tax Explosion

Ohio is at the center of one of the most dramatic tax debates in the country right now. A grassroots effort—the Committee to Abolish Ohio Property Taxes—is trying to place a constitutional amendment on the November 2026 ballot that would permanently ban property taxes statewide.

Property taxes generate roughly $24 billion annually in Ohio, funding schools, fire departments, police, and local infrastructure. The amendment doesn’t specify how that revenue would be replaced—it leaves that to the legislature. And that’s exactly what’s alarming state officials.

Governor DeWine has warned publicly that if the amendment passed, Ohio’s sales tax rate could climb as high as 20% to make up for lost revenue. The Ohio Office of Budget and Management has estimated replacement sales tax rates in the 15–18% range.

Per an article from The Statehouse News Bureau, organizers had gathered approximately 305,000 of the 413,487 signatures required. The petition deadline is July 1, 2026—making the ballot this fall appear unlikely. Still, the debate itself matters. It signals the intensity of property tax frustration in Ohio and the pressure on lawmakers to find some relief.

What to Do Right Now

None of these proposals affect your obligations today—but “proposed” has a habit of becoming “enacted” before businesses are prepared. The right time to get your compliance house in order is before the rules change, not after.

At SalesTaxSolutions.US, we help businesses of all sizes stay current with sales tax law changes, manage multi-state registrations, and file accurate returns on time—all through our secure online portal.

Create your account today and let us handle the complexity while you focus on running your business.