Published 25 September 2026
If you sell into the United States from the UK, Europe, Canada, Australia or another country, 1 October 2026 is a critical systems date. California, Texas and Pennsylvania all introduce sales tax changes on the same day.
The District of Columbia does not introduce the widely reported general rate increase on 1 October. Its 6% general rate remains in place until 30 September 2027.
You should update your tax engine, validate delivery addresses and review your economic nexus position before the changes take effect. Doing this now will reduce under-collection, filing corrections and customer disputes.
Understand the US sales tax structure before you update your system
US sales tax is state and local. It is not a federal tax administered by the IRS.
States establish the main rules. Counties, cities and special purpose districts may add local taxes. Each jurisdiction can also set its own registration, economic nexus and filing requirements.
This means your business may need to:
- Monitor sales into multiple states.
- Register after crossing an economic nexus threshold.
- Apply the correct tax to each ship-to address.
- Separate state and local tax in your records.
- File returns through the relevant state authority.
- Reconcile marketplace, website and fulfilment-centre data.
For international sellers, including Amazon sellers and digital businesses, using one national US tax rate is not sufficient. Your system must calculate tax based on the applicable jurisdiction and transaction details.
Pennsylvania: switch Philadelphia and Allegheny County to destination sourcing
Pennsylvania’s Act 21 of 2026 changes how local sales tax is sourced in Philadelphia and Allegheny County.
The Pennsylvania Department of Revenue guidance confirms that the change was enacted on 12 July 2026. It applies retroactively for tax years beginning after 31 December 2025, but enforcement starts on 1 October 2026.
Previously, local tax was generally linked to the vendor’s location. Under the new rule, local tax follows the delivery destination.
Apply the correct Pennsylvania rate
If you are already required to collect Pennsylvania’s 6% state sales tax, you must also collect the relevant local tax on taxable deliveries to:
- Philadelphia: 6% state tax plus 2% local tax, producing an 8% combined rate.
- Allegheny County, including Pittsburgh: 6% state tax plus 1% local tax, producing a 7% combined rate.
Pennsylvania’s economic nexus threshold remains $100,000 of annual Pennsylvania sales.
If you crossed that threshold and collected only 6% on all Pennsylvania transactions, you may have technically under-collected on deliveries into Philadelphia and Allegheny County from 1 January 2026 onwards.
Do not make unsupported retrospective adjustments. The Department of Revenue has provided an enforcement transition period. Update your system for 1 October, document your treatment of the January–September period and confirm the correct filing position with the Department before amending returns. The Department’s published contact number is 717-787-1064.
Pennsylvania uses centralised filing through Form PA-1, which captures state and local tax separately. Review your return mapping so local collections are not incorrectly reported as state tax.
California: update both the rate and tax code
California’s CDTFA Publication L-1037 introduces new sales and use tax rates effective 1 October 2026.
The most significant change is in Los Angeles County:
- Current countywide rate: 9.750%.
- New countywide rate: 10.250%.
- Current tax code: B47.
- New tax code: D29.
The 0.500% increase applies countywide. City rates within Los Angeles County also increase where the countywide change applies. CDTFA Publication L-1037 lists additional city and district-level changes, including new codes for affected locations.
Do not update only the percentage
Your tax engine must update both:
- The tax rate percentage.
- The applicable California district tax code.
Changing only the percentage can create incorrect reporting, even when the amount charged appears correct. Tax codes help determine where the tax is allocated and how it must be reported.
CDTFA address-level lookups for the new rates go live on 1 October 2026. Test your tax engine using delivery addresses in Los Angeles County and other affected California districts. Keep evidence of the rate tables and system changes used for your October filings.
Texas: refresh address-level local tax logic
Texas has a 6.25% state sales tax rate. Local jurisdictions can add tax, producing a maximum combined rate of 8.25%.
Texas is destination-based for remote sellers. You must therefore apply local tax using the customer’s ship-to address, not your warehouse, office or marketplace location.
The Texas Comptroller’s October 2026 update lists the following changes effective 1 October:
Cities and counties adopting or increasing local tax
- Beckville, Panola County: total rate of 8.25%.
- Ellinger: total rate of 8.25%.
- Frost: total rate of 8.25%.
- Northlake, Denton County: total rate of 8.25%.
- Fayette County: additional 0.5% county rate.
- Navarro County: additional 0.5% county rate.
Northlake also has changes involving its city and development district tax purposes. Your tax engine should use the address-specific jurisdiction result rather than applying a manual city-wide assumption.
Cities abolishing local taxes
The update also identifies local tax changes for:
- Bellmead, reducing the total rate to 8.0%.
- Naples, reducing the total rate to 8.0%.
- Orchard, reducing the total rate to 8.0%.
- Roscoe, reducing the total rate to 8.0%.
- Shoreacres, reducing the total rate to 6.25% following its merger with La Porte.
The La Porte and Shoreacres merger takes effect on 1 October 2026. Shoreacres abolishes its sales tax as part of the change.
Special purpose districts require extra testing
New or changed special purpose district taxes include:
- Ellis County Emergency Services District No. 1: 2.0%.
- Ellis County Emergency Services District No. 9: 2.0%.
- Ellis County Emergency Services District No. 9-A: 1.5%.
- Kaufman County Emergency Services District No. 1: 2.0%.
- Kaufman County Emergency Services District No. 1-A: 1.75%.
- Montgomery County Emergency Services District No. 10: 1.0%.
- Montgomery County Emergency Services District No. 10-A: 2.0%.
- Northlake Municipal Development District: 0.5%.
These districts may cover only parts of a county or certain ZIP codes. Validate the full address and boundary result. ZIP code alone may not be reliable enough for a complex Texas location.
D.C.: do not apply the general 7% rate on 1 October
Reports of a general D.C. sales tax increase to 7% on 1 October 2026 are now outdated.
Under the District's emergency budget legislation (B26-0724), as analysed by EY Tax News on 15 September 2026, the planned increase is delayed after Mayor Bowser allowed the measure to become law without her signature, so the general sales and use tax remains at 6.0% through 30 September 2027. The 7.0% rate begins on 1 October 2027.
Do not update your general D.C. tax configuration to 7% on 1 October 2026.
There are still important D.C. changes:
- The tax on rental and leasing charges for rental vehicles and utility trailers rises from 9.25% to 11%.
- The increase includes marketplace-facilitated peer-to-peer rentals.
- The hotel and accommodation tax increase is made permanent.
- The emergency legislation expires on 11 November 2026, while permanent legislation remains under Congressional review.
If your business sells vehicle rental services or operates a marketplace in this area, test those transactions separately from ordinary product sales.
Complete this 1 October implementation checklist
Use the remaining days in September to:
- Refresh tax rate tables. Load the official California, Texas and Pennsylvania changes.
- Update tax codes. Do not change percentages without updating jurisdiction codes and reporting mappings.
- Validate ship-to addresses. Destination sourcing depends on accurate state, county, city and district data.
- Review economic nexus. Check whether your sales have crossed thresholds such as Pennsylvania’s $100,000 limit.
- Test every sales channel. Include your website, Amazon, Shopify, eBay, TikTok Shop, WooCommerce and other marketplace feeds.
- Test fulfilment locations. Confirm that warehouse and marketplace data are not overriding the customer destination.
- Reconcile tax collected. Compare order-level calculations with settlement reports and payment processor data.
- Document the change. Keep rate files, test results, effective dates and system release notes.
- Prepare filing mappings. Separate state, local, county and district amounts before the next return.
- Review earlier Pennsylvania transactions. Document the January–September position before deciding whether any correction is required.
Review the wider cross-border compliance impact
Sales tax changes are arriving alongside import compliance changes.
The Federal Register notice issued by CBP confirms that the $800 de minimis exemption remains indefinitely suspended for goods arriving through modes other than the international postal network. A separate CBP rule covers international postal shipments and introduces a new postal informal entry process.
CBP has also been voiding Importer of Record numbers linked to incomplete or inaccurate Form 5106 data since 18 September 2026. Review your importer data, product classifications and customs records now.
For international sellers, this means import-side and sales-tax-side obligations are changing in the same quarter. Your US sales tax process should therefore be reviewed alongside inventory, customs, fulfilment and bookkeeping records.
How Sterlinx Global can support ongoing compliance
Sterlinx Global operates as a Global Tax Compliance Suite for international businesses, ecommerce brands, digital companies and growing SMEs.
You provide the required business and transaction data. We complete the compliance work on an ongoing basis, including:
- Bookkeeping and transaction processing.
- Sales tax, VAT and GST calculations.
- Sales tax and indirect tax filings.
- Cross-border reporting support.
- Payroll where required.
- Year-end accounts and compliance submissions.
You can use the full compliance service or select modular support for specific VAT, GST or Sales Tax obligations.
Contact Sterlinx Global to review your US sales tax readiness before 1 October 2026.
Frequently asked questions
Is US sales tax administered by the IRS?
No. The IRS administers federal taxes. General sales tax is administered by state and local tax authorities.
What is Pennsylvania’s economic nexus threshold?
Pennsylvania’s economic nexus threshold is $100,000 of annual Pennsylvania sales. Once you are required to collect Pennsylvania sales tax, you must also apply the correct local rate to taxable deliveries into Philadelphia and Allegheny County.
What is Pennsylvania destination-based sales tax?
For Philadelphia and Allegheny County local sales tax, the tax is based on the delivery destination rather than the seller’s location. Philadelphia deliveries are subject to an additional 2% local tax, while Allegheny County deliveries are subject to an additional 1%.
Does California’s Los Angeles County change affect tax codes?
Yes. The Los Angeles County code changes from B47 to D29, alongside the rate increase from 9.750% to 10.250%. Update both fields in your tax engine.
How should an Amazon seller handle these changes?
An Amazon seller should review marketplace collection reports, tax settings, customer delivery addresses and state registrations. Do not assume that Amazon’s collection of tax removes your responsibility to reconcile the amounts or file required returns.
Do D.C. sellers charge 7% from 1 October 2026?
No. The general D.C. sales and use tax remains 6% until 30 September 2027. The general rate changes to 7% from 1 October 2027. The separate rental vehicle and utility trailer rate rises to 11% on 1 October 2026.
