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As we move into October 2025, U.S. tax authorities and state legislatures are rolling out new sales tax rate changes, expansions of tax bases, and evolving compliance pressure, specifically for eCommerce sellers. In this monthly update, Yonda Tax covers October 2025 U.S. sales tax updates that matter, highlights key digital business events, and offers actionable takeaways for eCommerce sales tax compliance.
What’s New in October 2025: State & Local Rate Changes (with examples)
Each month, a handful of states adjust rates or fine-tune local jurisdictions. In October 2025, several important rate and rule changes go into effect. Below are key highlights and specific jurisdiction examples to illustrate how changes may affect multi-state operators.
Florida: Repeal of Sales Tax on Commercial Rentals
Effective October 1, 2025, Florida repeals its longstanding tax on commercial real property rentals. This is a major structural shift: for decades, Florida was among the few states that taxed commercial lease payments as a form of sales or use tax.
This means adjusting billing and accounting systems and reassessing pass-through tax strategies for commercial landlords, tenants, and property management firms.
Washington: Expanded Service Tax Base under ESSB 5814
In Washington State, ESSB 5814, passed earlier in 2025, expands the definition of “retail sales” to include many services previously exempt. Starting October 1, 2025, vendors must collect sales tax on new categories such as:
- Advertising services (graphic design, media placement, promotion)
- Digital/automated services, including data processing, software, and IT support
- Live presentations and workshops (in-person or virtual)
- Custom software modifications, consulting services, and similar offerings
This tax base expansion is dramatic for SaaS, digital, media, and marketing firms operating in Washington or selling into Washington.
Texas: Local Rate Adjustments & Taxation of Marketplace Commissions
Texas continues to see local tax changes. The Texas Comptroller has published a list of “New & Additional Tax Rate Changes Effective Oct. 1, 2025” showing cities that increased or adopted local sales taxes.
Sample jurisdiction changes (Oct 1, 2025):
The “combined total rate” includes the 6.25% Texas state rate plus local additions (up to the usual 8.25% cap).
Beyond jurisdictional rate changes, Texas is also expanding the taxability of marketplace activity. Starting October 1, 2025, marketplace seller commissions/fees will be taxed as data processing services, requiring platforms to add sales tax (6.25% + applicable local) to the fee line.
That means sellers on Amazon, Walmart, Etsy, etc., will see their commission fees taxed, effectively increasing the cost of the transaction. Be sure to update your marketplace integration logic accordingly.
For more on Texas combined rates and local taxing jurisdictions, the Texas Comptroller publishes a rate lookup / city rate file and quarterly update notices.
California: New District Taxes & Local Adjustments
California’s statewide rate remains 7.25%, but local and district “add-ons” push many local effective rates higher. The California Department of Tax and Fee Administration (CDTFA) lists upcoming “Tax Rates by City & County Operative October 1, 2025” changes.
Some notable city changes from the CDTFA’s published L-989 (New Sales & Use Tax Rates Effective October 1, 2025):
- Dos Palos (Merced County): New rate becomes 8.25% (0.50% additional district tax).
- Oakland (Alameda County): Rate increases to 10.75% (0.50% additional district).
- Sebastopol (Sonoma County): Rate becomes 10.50% (0.25% added).
The CDTFA provides downloadable city/county tax rate tables and a “rate by address” tool to confirm exact rates. You can also review the Explanation of Tax Rate Changes page for context and methodology.
Illinois
Starting January 1, 2026, Illinois will eliminate the 1% state sales tax on qualifying groceries, but municipalities and counties may impose a local 1% grocery tax if ordinances are approved by the DOR by October 1, 2025. Multistate eCommerce sellers shipping groceries into Illinois must track which localities adopt the tax to ensure correct collection and reporting, while continuing to apply existing local taxes (e.g., RTA, transit taxes). This Illinois sales tax update directly affects online retailers’ checkout calculations, compliance obligations, and net margins.
Other rate / local adjustments
- Illinois has a tax amnesty window from Oct 1 to Nov 15, 2025.
What to watch / action items
- Review local rate change advisories in Illinois municipalities where you operate.
- Consider whether the amnesty period is relevant for clean-ups if you have delinquencies or exposure.
Why These Updates Matter for eCommerce Sellers (with multistate lens)
These developments aren’t just academic. If you run an online store, marketplace, or digital service business with operations in multiple states, changes in October 2025 could have the following real impacts:
- Nexus & registration obligations: Expansion of taxable service definitions (e.g. Washington) or new local jurisdictions might trigger obligations in states or localities where you previously had no exposure.
- Tax engine and software updates: Rate updates and new taxable lines (e.g. Texas marketplace fee tax) require adjustments to your tax calculation stacks, including fallback logic for jurisdiction boundaries.
- Product / service reclassification: Some goods and services may shift in taxability status or be newly taxable in certain states (Washington, Texas, California).
- Audit and risk exposure: State Department of Revenues (DoRs) often focus on new or under-enforced categories (e.g. digital services, advertising).
- Cashflow and systems impacts: Incorrect collections—either over or under—must be reconciled. New tax on commission fees may lower your realized margins.
Further, the IRS is intensifying scrutiny of eCommerce sellers and digital income reporting, adding urgency to ensuring your tax compliance is airtight.
Key eCommerce & Tax-Tech Events in October 2025
To stay ahead of trends, here are a few events, webinars, and developments happening in October that are relevant for eCommerce sellers and tax teams:
- Baker Tilly: Tax Trends – Annual Transfer Pricing Update (Oct 23, 2025)—While more focused on international tax, indirect tax professionals may glean insights about cross-border compliance tensions.
- Vendor and SaaS tax platform release windows—Many tax solution providers (including Yonda Tax) will publish October 2025 rule/logic updates in early October.
- State DOR webinars / guidance updates—Expect FAQs, transitional relief guidance, and DOR newsletters for states implementing structural changes (Florida, Washington, Texas, California).
Block time in early October to audit the technical updates and QA your tax logic if your team is planning your Q4 compliance roadmap.
October 2025 U.S. Sales Tax Updates—What to Do Now (Checklist with verification steps)
We’ve created a tactical “October 2025 U.S. sales tax updates” checklist below, with rate-verification tasks to help your business navigate these changes effectively:
Case in Focus: Texas Marketplace Fee Tax + Local Rate Shifts
Let’s explore the Texas example, where we see both local rate movements and structural change in marketplace fee taxation.
Local rate changes: As shown in the Texas Comptroller’s October 1, 2025 update, cities like Bayou Vista, Leary, Weston Lakes, and others are adopting or increasing local taxes.
Marketplace commission taxation: Texas now treats marketplace seller fees as taxable data processing services starting October 1, 2025.
Impact for sellers:
- Your commission lines from marketplaces will have additional tax applied.
- Net proceeds may drop unless pricing or margin assumptions are adjusted.
- Tax logic must separate goods–buyer tax and fee–seller tax when interacting with marketplace APIs.
Steps:
- Confirm marketplace logic splits goods vs. commission.
- Adjust pricing or margins to absorb the additional tax cost.
- Reconcile reporting between your system and marketplace remittance.
The Texas case shows how combining jurisdictional rate shifts with structural rule changes creates layered complexity for multistate marketplace sellers sales tax.
Why You Need a Monthly Tax Update Process (reinforced with rate checks)
Your business cannot rely on annual updates given the volume of changes and local complexity.
Why monthly updates (with rate cross-checks) are nonnegotiable:
- Frequent local changes: Many rate adjustments are at the city/district level (e.g. Texas, California) and require constant monitoring.
- Rule expansions: States are pushing into services, digital, marketplace fees, and new tax bases.
- Risk mitigation: Late or incorrect filings, or failure to collect where required, carry penalties and interest.
- Marketplace complexity: With facilitator laws and commission taxation shifts, integration needs to keep pace.
- Historical reconciliation: Keeping a monthly archive of rate changes helps audits, refunds, and retro reconciliation.
Yonda Tax’s monthly U.S. sales tax update model (now enhanced with state snapshots and official source links) is designed precisely for sellers with multi-state footprints.
Next Steps & Recommendations (multistate operations focus)
If your business operates across multiple U.S. states—or focuses on marketplaces, SaaS, retail, or digital services—October 2025 is your prompt to:
- Audit your multistate footprint using updated jurisdiction rate files and rule changes.
- Enhance your tax system/engine to absorb new rate tables and rule logic per state. Yonda Tax does that automatically.
- Validate service and commission tax classification in suspect states (Texas, Washington, etc.).
- Run end-to-end testing across impacted ZIPs, jurisdictions, and marketplace flows.
- Subscribe to state bulletin alerts (e.g. Texas Comptroller, CDTFA, state DOR newsletters) for emergent guidance.
Closing Thoughts
As of October 2025, U.S. sales tax is becoming increasingly complex—not just in rate changes, but in structural expansions, local district moves, and new taxable categories. With cases like Texas (local rate shifts + marketplace fee taxation) and California (district tax additions), multistate operators must elevate their compliance infrastructure.
Your business can limit surprises, maintain compliance, and scale with confidence by integrating official DOR source data, sample jurisdiction snapshots, and regular verification into your tax update regimen. And if you’re ready to transform your sales tax compliance, book a call with us today.