This blog was last updated on September 9, 2025

Sales Tax Changes in 2025: The Rules Are Changing Faster Than Your Business Can Adapt

Whether you’re a CFO, controller, or tax lead at a U.S. company (or a multinational with U.S. operations), you should be asking: Is your compliance process ready for the new era of sales tax?

Major 2025 Sales Tax Changes by State

From a quantum computing data center exemptions in Indiana to a bullion bonanza in Florida and a sneaky 3% tax on your IT stack in Maryland, sales tax is no longer just a back-office checkbox. It’s strategic. It’s political. And it’s changing faster than your ERP team can say “custom software.”Here’s what’s happening, why it matters, and how to get ahead.

Maryland: New Digital & IT Services Tax

Let’s start with a big one: Maryland’s 3% tax on data and IT services is now in effect, as of July 1. This applies to software publishing, cloud hosting, and systems design. Oh, and they also repealed the exemption for custom software which means your once-exempt bespoke programming is now taxable at 6%.

Why it matters: State are consistently looking to expand their sales tax base to align with the changing digital economy. Maryland’s move could become a blueprint for other states hungry for digital tax revenue. If your software licenses, SaaS integrations, or cloud services touch Maryland, your A/P, A/R, and tax teams  better be talking.

Bullion Is Booming (And Tax-Free)

In a rare display of legislative alignment, Florida and Kentucky now exempt investment-grade bullion purchases from sales tax. Jewelry and collectibles remain taxable.

• Florida: Eliminated the $500 threshold. Now all investment-grade gold, silver and platinum are exempt—regardless of price
• Kentucky: Veto override makes exemptions retroactive to March 27, 2025.

Why it matters: This isn’t just about coin collectors . It’s about bullion dealers and any business that stores or resells metal-based assets. You can bet auditors will be watching for improper applications of these exemptions.

States Exempt Essential Consumer Goods

States are catching on to consumer and social pressure to exclude basic necessities from sales tax.

• As of September 1, Alabama will exempt certain baby supplies, maternity products, diapers, and feminine hygiene products from at least state level sales tax. Under the law as written today, the exemption is set to expire on August 31, 2028/
• Starting on August 28, Missouri will exempt diapers, feminine hygiene products, and other incontinence products

Why it matters: Retailers and eCommerce sellers must reconfigure tax rules to meet the above deadlines. These exemptions vary by state and consumers are likely well aware of these changes. One wrong setting could lead to under collection and audit exposure or even worse, a viral customer complaint.

Florida: Disaster Preparedness Relief Goes Permanent

Florida has robustly embraced the concept of sales tax holidays. In 2025, the Sunshine State is offering temporary tax exemptions for back-to-school shopping, hunting, fishing and camping supplies, and event admissions. However, they are scrapping their customary emergency preparedness holiday and making the exemption permanent. As of August 1, Florida now permanently exempts disaster-preparedness products (e.g., batteries, smoke detectors, generators) from sales tax, replacing its former short-term “preparedness holidays”.

Why it matters: If you’re a seller of disaster-prep gear, your tax engine  must now account for year-round relief instead of narrow holiday dates.

Texas: End of R&D Equipment Exemption

States will sometimes create sales tax exemptions to encourage businesses activity in their state.  For example, many jurisdictions have adopted exemptions for goods purchased for manufacturing activity. These exemptions are at least partially designed to incent manufacturers to open and operate facilities within their borders.

Effective January 1, 2026, Texas will repeal the sales tax exemption for R&D equipment. For labs and manufacturers, this could mean millions in added taxable CapEx.

Why it matters: On the buy side, if your innovation pipeline runs through Texas, expect increased CapEx costs. Manufacturers, labs, and tech companies must budget for new tax exposure and ensure their suppliers understand the exemption no longer applies. Sellers of R&D equipment must begin charging tax to their Texas customers or risk significant audit exposure

Other Notable State-Level Changes

Economic Nexus Thresholds
On January 1, 2026, Illinois will follow the clear national trend by dropping the 200-transaction threshold and going revenue-only.

Streaming & Digital Services
Likewise on January 1, Maine will repeal its longstanding service provider tax and begin applying sales tax to streaming subscriptions like Netflix and Spotify.

Commercial Rentals
Florida is repealing state sales tax on commercial real property rentals this October, a massive shift but likely a welcome change for landlords and corporate tenants who are not required to pay sales tax anywhere else in the country.

And don’t sleep on quantum computing exemptions in Indiana. It sounds niche, until you realize how much sales tax could apply to the high-priced technical equipment used within this industry.

Sales Tax Compliance Risks in 2025

Here’s the scary part: most ERP and billing systems aren’t designed to handle this velocity of change. Manual updates? Risky. One error in tax configuration could mean undercollection, resulting in penalties and audits. On the other hand, overcollection can result in class action liability and/ or customer churn. Likewise, misapplied exemptions could equal reputation damage. This isn’t just a tax department issue anymore, it’s an IT, legal, and finance priority.

How Smart Companies Are Preparing

The solution isn’t just more spreadsheets or bolt-on fixes. It’s a new way to see what regulators see before they knock on your door.

• Automating tax rules across all channels (especially ecommerce and billing platforms)
• Integrating indirect tax engines with ERP, P2P, and O2C processes
• Monitoring state-by-state changes
• Working with partners like Sovos to stay ahead of legislation

If you’re not updating your compliance approach regularly, you’re leaving your business exposed.  Don’t wait for an audit notice to discover what your system missed. Talk to Sovos today to see how our Indirect Tax Suite helps companies automate rules, integrate with ERP and avoid costly audits.

Frequently Asked Questions

How does Maryland’s new digital and IT services tax work?

Effective July 1, 2025, Maryland applies a 3% sales and use tax on IT and digital services, including SaaS, data hosting, and software publishing. Businesses may use a Multiple Points of Use (MPU) certificate to allocate tax outside the state.

Which states are exempting bullion from sales tax in 2025?

As of 2025, 46 states exempt bullion from sales tax. Florida (Aug. 1, 2025) and New Jersey (Jan. 1, 2025) recently joined. Only Maine, Vermont, New Mexico, Hawaii, and D.C. still tax bullion.

How do sales tax changes in Texas affect R&D equipment?

Texas ends its R&D sales tax exemption on January 1, 2026. In exchange, the state expanded the franchise tax R&D credit to 8.7%, or 10.9% for projects with Texas universities, creating a stronger long-term incentive.