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QuickBooks Sales Tax Rate and Rule Updates August 1, 2026

Thank you for using QuickBooks Sales Tax. Each month states make changes to rates and rules. To keep you ahead of these changes we have put together the following summary of rate and rule changes that will occur in QuickBooks Sales Tax this month. With many users doing business in more than one state, this summary will be sent each month so you are aware of changes that may affect your business transactions both inside and outside your state. Knowing these changes will eliminate surprises to you or your clients. You can use our free sales tax calculator anytime to find rates for any US address.

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Coming Soon: New Sales Tax Liability Report
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RATE UPDATES

Rate changes will take place in the following locations on August 1, 2026. All states that are listed have local rate changes unless otherwise noted as also having a state rate change.

Alabama (Rogersville)
Arizona (Huachuca City)
Illinois (Northern Illinois Transportation Authority)

TAX ADMINISTRATION UPDATES

Alabama
Falkville
The Town of Falkville is changing tax administration from Avenu to ALDOR for its sales, use, and rental taxes. The PJ rates are ½ the corporate limit rates.

Grove Hill
The Town of Grove Hill is changing tax administration from Avenu to ALDOR for its sales, use, and rental taxes. Note however, the Town of Grove Hill does not currently levy rental taxes. Taxes are not levied in the police jurisdiction.

Woodville
The Town of Woodville is changing tax administration from Avenu to ALDOR for its sales, use, and rental taxes. Note however, the Town of Woodville does not currently levy rental taxes. The PJ rates are ½ the corporate limit rates.

Etowah County
Etowah County is changing tax administration from Avenu to ALDOR for its sales and use taxes. This includes Unabated Etowah County taxes. Currently, Etowah County does not levy rental taxes.

SALES TAX HOLIDAYS

Arkansas' back to school sales tax holiday runs August 1-2.
During this period, no state or local sales tax will be collected on clothing and footwear priced under $100 per item; clothing accessories and equipment priced under $50 per item; school supplies, school art supplies, and school instructional materials (no price limit); and electronic devices used by a student in a course of study (no price limit). All relevant tax categories will be exempt during the holiday period under the relevant thresholds.
Connecticut’s annual sales tax holiday for clothing and footwear runs August 16-22. During this period, clothing, footwear, and backpacks priced under $300 per item are exempt from sales tax. All relevant tax categories will be exempt during the holiday period under the relevant threshold.

Florida’s back to school sales tax holiday runs July 20 through August 20.
During this period, no state or local sales tax will be collected on clothing, footwear, and certain accessories priced at $100 or less per item; certain school supplies priced at $50 or less per item; learning aids and jigsaw puzzles priced at $30 or less per item; and personal computers and certain computer-related accessories priced at $1,500 or less, when purchased for noncommercial home or personal use. All relevant tax categories will be exempt during the holiday period under the relevant thresholds.

Illinois’ back to school sales tax holiday runs August 7-16.
During this period, the state portion of sales tax on eligible items drops from 6.25% to 1.25%, plus any applicable local sales tax. Eligible items include clothing and footwear for general use priced under $125 per item and school supplies used by students in a course of study (no price limit). All relevant tax categories will be taxed at the reduced rate during the holiday period under the relevant threshold.

Iowa’s annual sales tax holiday runs August 7-8.
During this period, sellers are not required to collect sales tax, including local option taxes, on qualifying clothing and footwear priced under $100 per item. All relevant tax categories will be exempt during the holiday period under the relevant threshold.

Maryland’s Shop Maryland Tax-Free Week runs August 9-15.
During this period, Maryland sales tax does not apply to clothing and footwear priced at $100 or less (items over $100 are taxed on the full price) or to the first $40 of a backpack or bookbag (only the amount over $40 is taxed). All relevant tax categories will be exempt during the holiday period under the relevant thresholds.

Massachusetts' annual sales tax holiday runs August 8-9.
During this period, the state sales tax will not be collected on most retail items priced at $2,500 or less per item and purchased by individuals for personal use. All relevant tax categories will be exempt during the holiday period under the relevant threshold.

Missouri’s back to school sales tax holiday runs August 7-9.
During this period, qualifying purchases of clothing and footwear, personal computers, computer peripheral devices, personal computer software, and general school supplies are exempt from sales tax. All relevant tax categories will be exempt during the holiday period under the relevant thresholds.

Ohio’s annual sales tax holiday runs August 7-9.
Ohio has returned to its standard holiday after two years of the expanded, nearly all-items version. During this period, clothing, school supplies, and school instructional materials are exempt from sales tax. All relevant tax categories will be exempt during the holiday period under the relevant thresholds.

Oklahoma’s annual sales tax holiday runs August 7-9.
During this period, qualifying clothing and footwear priced under $100 may be purchased free of state and local sales tax. All relevant tax categories will be exempt during the holiday period under the relevant threshold.

South Carolina's annual sales tax holiday runs August 7-9.
During this period, clothing, clothing accessories, footwear, school supplies, computers, printers, computer software, and bath and bed linens and supplies are exempt from sales tax. All relevant tax categories will be exempt during the holiday period.

Texas’ annual back to school sales tax holiday runs August 7-9.
During this period, most clothing, footwear, and school supplies priced under $100 per item are exempt from sales tax. All relevant tax categories will be exempt during the holiday period under the relevant threshold.

Virginia's annual sales tax holiday runs August 7-9.
During this period, qualifying purchases of school supplies, clothing and footwear, hurricane and emergency preparedness items, and Energy Star and WaterSense products are exempt from sales tax. All relevant tax categories will be exempt during the holiday period under the relevant thresholds.

USING QUICKBOOKS: LOCATION OF SALE FOR SERVICES

If you provide services at your customer's location (like landscaping or pool repairs), sales tax may be due based on the customer's address rather than your business address. If you aren't using a tax category for your service and have turned off shipping, enter the customer's address on the invoice (in the "Location of sale" field), and QuickBooks will automatically calculate the correct local rates for that location.

SALES TAX NEWS

Kentucky: Economic Nexus Change
Effective August 1, Kentucky drops its 200-transaction rule for remote sellers and marketplace providers. Only the dollar threshold remains: $100,000 or more in sales to Kentucky customers in the current or prior calendar year. Sellers who registered only because of the transaction count no longer need to be registered. There is no change for Kentucky-based retailers or sellers with physical presence in the state.

Pennsylvania: Local Sales Tax Sourcing Change
Pennsylvania's 2026–27 budget (enacted July 12) changes the sourcing of local sales tax on intrastate sales, where both the ship-from and the ship-to/service location are in Pennsylvania. Historically, the Philadelphia and Allegheny County local sales taxes applied based on the seller's location (origin). Under the new law, they apply where the goods are delivered or the service is performed (destination). The change appears retroactive to January 1, 2026; however, the Pennsylvania Department of Revenue has not yet issued guidance but has indicated it will do so shortly. We are tracking this change and will update QuickBooks once the state clarifies how and when the new rules apply.
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Please note that these are the changes that have been released by the states as of the date of this e-mail and there is a possibility other small changes could be enacted late or retroactively by the states.
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QuickBooks has been updated to account for these changes. Now you will get the updated rates and rules applied automatically to your invoice.

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