As an online seller in the United States, staying compliant with sales tax regulations is critical to avoiding penalties, maintaining customer trust, and ensuring smooth operations. July 2025 brings a wave of sales tax updates across multiple states, impacting rates, exemptions, and compliance requirements. From local rate adjustments to new taxes on IT services and retail delivery fees, these changes demand attention. This article dives deep into the most pertinent updates, offering actionable insights and highlighting how Yonda Tax, an automated tax compliance solution, can simplify your journey. Whether you're a small e-commerce business or a large marketplace facilitator, this guide is tailored for you.
Why Sales Tax Compliance Matters for Online Sellers
If you’re struggling to keep up with sales tax compliance, that’s because it is more complex than ever in 2025. With states frequently updating rates, introducing new taxes, and refining economic nexus rules, online sellers face a labyrinth of regulations. Non-compliance can lead to audits, fines, and reputational damage. For businesses operating across state lines or on platforms like Amazon, Etsy, or Shopify, tracking these changes manually is nearly impossible. Automated tools like Yonda Tax streamline the process, ensuring accurate tax collection and remittance while saving you time and resources.
Say goodbye to tax headaches, you’re getting a breakdown from sales tax experts. Let’s look at the key sales tax updates effective July 1, 2025, and how they impact your business.
State-Specific Sales Tax Rate Changes
Arkansas
Local jurisdictions in Arkansas implemented various sales tax rate adjustments on July 1, 2025. The Arkansas Department of Finance and Administration published updated rate sheets, detailing changes at the city and county levels. For online sellers, these localized changes mean updating checkout systems to reflect accurate tax rates for Arkansas customers.
Actionable Tip: Use Yonda Tax to automatically pull the latest Arkansas sales tax rates, ensuring your platform charges the correct amount at checkout. Stay compliant effortlessly.
California
California’s sales and use tax rates saw updates, particularly in district taxes, which vary by locality. The California Department of Tax and Fee Administration provides detailed rate sheets, essential for sellers with customers in high-tax areas like Los Angeles or San Francisco.
Pro Tip: Yonda Tax integrates with your e-commerce platform to apply California’s district tax rates accurately, reducing the risk of under- or over-collection. Explore our automated sales tax software features.
Colorado
Colorado reduced its retail delivery fee from 29 to 28 cents and increased the county lodging tax cap to 5% from 2%. These changes affect sellers offering delivery services or operating in the hospitality sector. Additionally, new sales and use tax rates took effect across various jurisdictions.
Georgia
Georgia saw county-level sales tax rate changes, including Clinch County at 7.00%, Stewart and Telfair Counties at 8.00%, Thomas County at 8.00%, and Washington County at 9.00%. These rates cover Local Option (LOST), Education (ESPLOST), Special Purpose (SPLOST), and Transportation (TSPLOST) taxes, creating a patchwork of obligations for sellers.
Seller Strategy: Yonda Tax tracks Georgia’s county-specific tax rates in real-time, ensuring your business collects the correct tax for each transaction. Speak to us to simplify your tax management.
Illinois
Illinois introduced multiple sales and use tax rate changes, with local jurisdictions adjusting rates by 0.25% to 1.50%. Sellers must update their systems to comply, using tools like Illinois Tax Rate Finder to verify rates.
Automation Advantage: Yonda Tax automatically applying the correct rates to your transactions, leaving you to focus on your business while we focus on your tax.
Other States
- Iowa: Earlham (Madison County) imposed a new Local Option Sales Tax, and Hamburg (Fremont County) introduced a 7% hotel/motel tax.
- Mississippi: The grocery sales tax dropped from 7% to 5%, but prepared foods remain at 7%. Third-party booking platforms must now collect hotel taxes.
- Missouri: Dakota County added a 0.5% tax rate for sales outside municipalities with local taxes.
- North Dakota: Dunseith (1% to 2%) and Langdon (2% to 3%) increased city-level taxes.
- Oklahoma: Local rate changes affected jurisdictions like Choctaw City, Frederick City, and others.
- South Carolina: Clarendon County’s 1% School District Tax expired, lowering the rate to 7%.
- Texas: Local sales and use tax rates changed in multiple jurisdictions.
- Vermont: New 1% local option taxes were introduced, and the telephone personal property tax repeal was delayed to July 1, 2026.
- Washington: The City of Stevenson Transportation Benefit District added a 0.3% tax.
Key Takeaway: With Yonda Tax, you can manage these diverse rate changes across states without manual updates. Its real-time tax rate database ensures compliance, letting you focus on growing your business.
New Taxes and Exemptions
Maryland’s IT Services Tax
Maryland introduced a 3% sales and use tax on IT services, including computing infrastructure, data processing, web hosting (NAICS 518), and information services (NAICS 519). The exemption for customized software and SaaS was repealed, impacting tech-focused sellers.
Impact for Sellers: If you sell IT-related services, you must now collect this tax. Yonda Tax can simplify SaaS tax compliance for you automatically.
Tennessee’s Vapor and Wine Exemptions
Tennessee introduced a tax on vapor products and an exemption for wine sold on winery premises. Sellers of vaping products must now collect this tax, while winery-based sellers benefit from the exemption.
Compliance Tip: Yonda Tax handles niche tax categories like vapor products expertly, ensuring you stay compliant without manual adjustments.
Alabama’s Medical Marijuana Exemption
Alabama created a sales tax exemption for medical marijuana for low-income EBT cardholders and increased fuel excise taxes (gasoline to 30 cents/gallon, undyed diesel to 31 cents/gallon).
Seller Action: If you sell medical marijuana, ensure your system applies this exemption correctly. Yonda Tax can configure exemptions for specific customer groups, streamlining compliance.
Kansas’ Food Tax Elimination
Kansas eliminated its 2% state sales tax on unprepared food, though local taxes may still apply. This change benefits grocery sellers but requires careful handling of local tax variations.
Pro Tip: Yonda Tax distinguishes between state and local tax rates, ensuring accurate calculations for Kansas customers.
Sales Tax Holidays in July 2025
Sales tax holidays offer temporary exemptions on specific items, attracting bargain-hunting customers. Here are the July 2025 holidays:
- Alabama: Back-to-school, July 18–20
- Mississippi: Annual, July 11–13
- Puerto Rico: Back-to-school, July 12–13
- Tennessee: Back-to-school, July 25–27
Seller Opportunity: Promote eligible products (e.g., school supplies, clothing) during these periods to boost sales. Yonda Tax automatically adjusts for tax holidays, ensuring you don’t collect tax on exempt items.
Economic Nexus and Compliance Updates
Utah’s Simplified Nexus Threshold
Utah eliminated its 200-transaction economic nexus threshold, leaving only the $100,000 sales threshold for remote sellers. This simplifies compliance but requires vigilance to track sales accurately.
Compliance Strategy: Yonda Tax monitors your sales across states, alerting you when you approach Utah’s nexus threshold.
Alaska’s Marketplace Facilitator Rules
In Juneau, Alaska, marketplace facilitators like Airbnb, Turo, Uber, and Vrbo must collect and remit sales and hotel bed taxes. If you operate a marketplace, ensure compliance with these new obligations.
South Dakota’s Filing Change
South Dakota removed the tax allowance credit for electronic filing from July 1, 2025, to June 30, 2028, increasing compliance costs for some sellers.
Cost-Saving Tip: Yonda Tax streamlines electronic filing, reducing administrative overhead.
Emerging Trends: Retail Delivery Fees and Penny Cessation
Retail Delivery Fees
Mississippi joined states like New York, Hawaii, Indiana, and Maryland in imposing a 30-cent retail delivery fee on July 1, 2025. This fee applies to taxable deliveries, adding a new layer of compliance for e-commerce sellers.
US Treasury’s Penny Cessation
The US Treasury’s decision to cease penny production requires transactions to round to the nearest nickel, potentially affecting sales tax calculations. This change could complicate pricing for low-value items.
How to Stay Tax Compliant in July 2025
- Update Your Systems: Adjust your e-commerce platform to reflect new tax rates and rules. Yonda Tax automates this process, pulling real-time rates from state databases.
- Monitor Economic Nexus: Track sales to identify states where you meet nexus thresholds. Yonda Tax provides nexus alerts to keep you compliant.
- Leverage Sales Tax Holidays: Promote tax-exempt products during holidays to drive sales. Yonda Tax ensures accurate tax application during these periods.
- Automate Compliance: Manual tax management is error-prone. Yonda Tax integrates with platforms like Shopify, Amazon, and WooCommerce, handling rate updates, exemptions, and filings.
Why Choose Yonda Tax?
Yonda Tax is the ultimate solution for online sellers navigating the complex world of sales tax compliance. With features like real-time rate updates, nexus tracking, and automated filing, it saves you time and reduces risk. Whether you’re managing sales in one state or fifty, Yonda Tax scales with your business and provides hassle-free tax compliance.
Conclusion
July 2025 brings significant sales tax updates that online sellers can’t afford to ignore. From rate changes in Arkansas and California to new taxes in Maryland and retail delivery fees in Mississippi, staying compliant requires vigilance and the right tools. Yonda Tax empowers you to focus on growing your business while it handles the complexities of tax compliance. Don’t risk penalties or missed opportunities—talk to US sales tax experts today and automate your tax management.
For the latest state-specific details, check resources like the MyTax Illinois Tax Rate Finder, the California Department of Tax and Fee Administration, or your state’s revenue department. Stay informed, stay compliant, and let Yonda Tax do the heavy lifting.