Expect sales taxes to proliferate post-pandemic

“When the economy shut down last year, a lot of localities panicked,” observed Mike Bernard, chief tax officer for transaction tax at Vertex. "In most instances, transaction tax represents close to one-third of the revenue for those localities. Property tax is about 40%, and income tax and some other taxes fill in the remainder.”
Taxing jurisdictions’ concern was that people were not buying much other than essentials such as food and medicine, and most of that is not taxable. “But people started to adjust to the situation, opened their wallets and the revenue started coming back,” Bernard explained.
As states focus on stabilizing their budgets, new district sales taxes continue to materialize at a rapid clip, continuing a trend Bernard noted last year.
Among the report’s findings are a proliferation of new district taxes, frequent changing of tax rates, and a rise in average rates.

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