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By the Numbers: 2025 Mid-Year Sales Tax Rates and Rules Update

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Local tax authorities have been busy through the first six months of 2025. Vertex’s Mid-Year Sales Tax Rates and Rules Report shows that 408 combined sales tax rate changes and new rates were issued through June 30. That’s a 24% increase in total rate changes compared to the first six months of 2024.

The bulk of these rate changes and new taxes have occurred at the city and district levels. While only one state increased its sales tax rate this year, more may consider following suit depending on how an imposing combination of economic, geopolitical and policymaking factors play out in the coming months. For example, if the One Big Beautiful Bill Act’s call for tens of billions of dollars in cuts to federal Medicaid and Supplemental Nutrition Assistance Program (SNAP) funding, many states will face stark choices for addressing their budgetary shortfalls. Tariff-induced inflation increases could rein in consumer spending. Both scenarios would create fiscal pressures that would put additional sales tax rate increases up on the table for many state and local governments.

With those wildcards in mind here are some of the most noteworthy numbers from our mid-year report:

  • 1: This is how many states have changed their sales tax rates so far this year. Louisiana raised its sales tax rate from 4.55% to 5% on Jan. 1 – about a 10% increase, and one that is scheduled to decline to 4.75% on Jan. 1, 2030, absent any future legislation. The law also increased the tax rate on intrastate telecommunications, sales of prepaid telephone cards and prepaid authorization numbers, interstate telecommunications and direct marketers. A single state sales tax rate increase is newsworthy given that there have only been three other state sales tax rate changes since 2020. Other state legislatures may consider following in Louisiana’s footsteps if fiscal pressures start to sting.
  • 82%: That’s the increase in new district taxes that came online in the first half of 2025 (140) compared to the same period last year (77). These 140 new district taxes – again, through just six months – exceeds the number of new district taxes that were enacted in all of 2018 (138) and all of 2022 (115)
  • 2X: Twice as many new taxing cities (60) have been approved so far this year compared to the number enacted during the same period in 2024 (30).
  • 6:1: This is the approximate ratio of city sales tax rate increases to decreases; for every 1 city rate decrease, there were 5.9 city rate increases. Although the volume of city tax rate changes has so far declined this year (from 159 in 2024 to 117), the vast majority of these changes are increases.
  • 2.9:1: This is the ratio of county sales tax rate increases to decreases; for every 1 county rate decrease, there were nearly 3 county rate increases.
  • 12,299: That’s the total number of U.S. sales and use tax jurisdictions as of June 30: 7,076 cities, 1,972 counties, 3,205 districts and 46 states.
  • 617: This is the annual average number of new and updated sales and use taxes that have occurred since 2015.

Again, our mid-year report contains additional rates and rules data. The report also provides related analysis – as does my related post on emerging indirect tax trends.

Disclaimer

Please remember that the Vertex blog provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in the Vertex blog are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.

Blog Author

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Vice President and Chief Tax Officer

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is also responsible for influencing emerging technologies which meet the continuing regulatory changes of the corporate tax community. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being General Manager & U.S. Tax Counsel. He led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. He has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. He also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

Read our 2025 Mid-Year Sales Tax Rates and Rules Report.

With a 24% spike in rate changes and a record-setting surge in new district taxes, this year’s report highlights the shifting dynamics of indirect tax policy across the U.S. Explore what’s driving these changes, how states are expanding their tax base and what tax professionals should watch for in the second half of the year.

READ REPORT
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2025 Mid-Year Sales Tax Rates and Rules Podcast

In this episode of Tax Matters, Michael Bernard, Vertex Vice President and Chief Tax Officer, discusses insights from our 2025 Mid-Year Sales Tax Rates and Rules Report.

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