In 2025, it is estimated that there were mor than 500 changes to sales tax rules and regulations throughout the country, more than in any single year ever before. In 2026, it is expected that an even greater number of changes will occur, as states continue to refine their laws to account for added types of taxable products and broadened definitions of sales tax nexus.
As local and regional governments seek to raise additional funds in 2026, sales taxes grow in importance as a leading revenue generator. Currently, sales taxes average nearly one-third of all tax revenue that most states collect. For companies doing business in multiple states, keeping track of all the changes and responsibilities can be a daunting task, often leading to sales tax calculation errors and overpayments.
Eight of the main areas where companies can expect to see sales tax changes in 2026 include:
- Broadening definitions of sales tax nexus. Time was when one’s company only had to have a physical sales presence in a state to establish nexus. In 2026, nexus can be established by having non-tax connections to the state that include warehouse storage, back-office operations, temporary employees — even attending a trade show in that state can establish tax nexus.
- Expanding the definition of items to be taxed. The definition of items to be taxed is expanding from tangible goods that are sold and delivered within a state to include virtual and digital items, such as software as a service (SaaS), that may be purchased elsewhere but is utilized in a particular state.
- More states will be eliminating the number of transactions qualifier. Many states will be eliminating qualifiers based on conducting a minimum number of transactions in a state, in favor of a minimum volume of business done in that state.
- Sales taxes will have more influence on major corporate decision-making. At one time, sales tax was a simple bookkeeping item, a set number on an invoice based on a physical sale location. It usually got paid with little additional consideration. In 2026, sales taxes’ ever-broadening definitions of nexus and responsibility will increase interest and involvement at the C-suite level because of their influence on major decisions such as warehouse locations, work-from-home employees, trade shows attended and other factors.
- Some states will lower sales taxes as an incentive to attract more business. Although many states will be raising sales taxes, some states will become more competitive with their sales tax rates in order to attract new residents and businesses.
- Real time sales tax collection will become more prevalent. Thanks to the latest technology, more states will be able to collect revenue digitally, the instant the sale is made. Company cash flow will be affected because sales taxes will be collected in real time.
- In 2026, there will be growth in the number of sales tax audits that states conduct. A company’s chances of being audited will become greater in 2026, as states increase the number of audit personnel and sales tax priority. However, even if a company has received a tax bill or audit request from a state, that may not mean it is accurate. Sales tax figures should often be challenged because doing so can uncover overpayments. Prudent companies will prepare in advance by engaging in forensic accounting, often discovering that, instead of owing taxes, they are owed a significant refund due to their overpayments.
- Artificial intelligence will become more of a factor in analyzing tax liability and audits. With all of AI’s benefits, there is also the potential for AI to present audit inaccuracies because updates may be occurring faster than AI is able to “learn” and update its recommendations.
2026 is the year that sales tax goes beyond bookkeeping, as C-suite executives recognize its significant influence on corporate planning, decision-making and the bottom line. When one looks at the EBITDA of most companies, typically in the 6–10% range, six- and seven-figure refunds plus future sales tax savings can be a significant contributor to profitability.
William Flick, recognized nationally as a thought leader on the subject of business sales tax nexus and compliance, is in the sales tax leadership at EisnerAmper, one of the largest business consulting groups in the world, comprised of EisnerAmper LLP, a licensed independent CPA firm that provides client attest services, and EisnerAmper Advisory Group LLC, an alternative practice structure that provides business advisory and non-attest services in accordance with all applicable laws, regulations, standards and codes of conduct.
Prior to merging with Eisner Amper, Flick owned FM Cost Containment, one of the leading forensic tax recovery firms in the United States, specializing in tax confirmation and recovery of overpayments of sales and use taxes as well as tax audit defense, utilizing proprietary research and knowledge of little-known technicalities in the tax laws of each of the 50 states, including more than 10,000 tax entities throughout the United States.
