Vertex 2024 Mid-Year Sales Tax Rates and Rules Report Reveals Local Governments are Increasingly Dependent on Sales Tax Revenues
Vertex's 2024 Mid-Year Sales Tax Rates and Rules Report reveals a significant increase in local tax rate changes, highlighting cities' growing dependence on sales tax revenues. Key findings include:
1. 67% year-over-year increase in city-level sales tax rate changes, with 159 authorized changes in the first half of 2024 compared to 95 in 2023.
2. Adoption of 30 new taxing cities and 77 district taxes, continuing a decade-long trend of net-new taxation.
3. Local governments raised sales tax rates with three times more county-level increases than decreases, and 12 times more city increases than decreases.
The report also notes a rise in unique fees and global trends in VAT and environmental taxes, emphasizing the need for businesses to adapt to increasing tax complexities.
Il rapporto sulle aliquote e le regole dell'imposta sulle vendite a metà anno 2024 di Vertex rivela un significativo aumento nei cambiamenti delle aliquote fiscali locali, evidenziando la crescente dipendenza delle città dai ricavi derivanti dalle vendite. Le principali scoperte includono:
1. Aumento del 67% anno su anno nei cambiamenti delle aliquote dell'imposta sulle vendite a livello cittadino, con 159 cambiamenti autorizzati nella prima metà del 2024 rispetto ai 95 del 2023.
2. Adozione di 30 nuove città tassate e 77 tasse distrettuali, continuando una tendenza decennale alla creazione di nuove imposizioni fiscali.
3. I governi locali hanno aumentato le aliquote dell'imposta sulle vendite, con tre volte più aumenti a livello di contea rispetto alle diminuzioni, e 12 volte più aumenti nelle città rispetto alle diminuzioni.
Il rapporto segnala anche un incremento di tasse uniche e tendenze globali in materia di IVA e imposte ambientali, sottolineando la necessità per le imprese di adattarsi alla crescente complessità fiscale.
El informe sobre las tasas y reglas del impuesto sobre ventas a mitad de año 2024 de Vertex revela un aumento significativo en los cambios de tasas fiscales locales, destacando la creciente dependencia de las ciudades de los ingresos por ventas. Los hallazgos clave incluyen:
1. Aumento del 67% en comparación al año anterior en los cambios de tasas del impuesto sobre ventas a nivel de ciudad, con 159 cambios autorizados en la primera mitad de 2024 en comparación con 95 en 2023.
2. Adopción de 30 nuevas ciudades gravadas y 77 impuestos distritales, continuando una tendencia de diez años de nueva tributación neta.
3. Los gobiernos locales aumentaron las tasas del impuesto sobre ventas, con tres veces más aumentos a nivel de condado que disminuciones, y 12 veces más aumentos en las ciudades que disminuciones.
El informe también señala un aumento en tarifas únicas y tendencias globales en IVA e impuestos ambientales, enfatizando la necesidad de que las empresas se adapten a la creciente complejidad fiscal.
Vertex의 2024년 중간 연도 판매세율 및 규칙 보고서는 지방세율 변경이 크게 증가했음을 보여주며, 도시가 판매세 수입에 점점 더 의존하고 있다는 점을 강조합니다. 주요 발견 내용은 다음과 같습니다:
1. 도시 차원에서 판매세율 변화가 전년 대비 67% 증가, 2023년 95건과 비교하여 2024년 상반기에 159건의 변경이 승인되었습니다.
2. 30개의 새로운 과세 도시와 77개의 지역세 도입, 새로운 과세가 계속되는 10년간의 추세를 이어가고 있습니다.
3. 지방 정부는 판매세율을 인상했습니다, 카운티 수준에서 감소보다 증가가 세 배 더 많고, 도시에서는 감소에 비해 12배 더 많은 증가가 있었습니다.
보고서는 또한 독특한 수수료와 VAT 및 환경세의 세계적 추세가 증가하고 있음을 언급하며, 기업들이 증가하는 세무 복잡성에 적응해야 할 필요성을 강조하고 있습니다.
Le rapport sur les taux et règles de la taxe sur les ventes à mi-année 2024 de Vertex révèle une augmentation significative des changements de taux fiscaux locaux, soulignant la dépendance croissante des villes vis-à-vis des revenus de la taxe sur les ventes. Les principales conclusions comprennent :
1. Augmentation de 67 % d'une année sur l'autre des changements de taux de taxe sur les ventes au niveau municipal, avec 159 changements autorisés dans la première moitié de 2024 par rapport à 95 en 2023.
2. Adoption de 30 nouvelles villes imposées et de 77 impôts de district, poursuivant une tendance de dix ans à la création de nouvelles taxes.
3. Les gouvernements locaux ont augmenté les taux de la taxe sur les ventes, avec trois fois plus d'augmentations au niveau des comtés que de diminutions et 12 fois plus d'augmentations dans les villes que de diminutions.
Le rapport note également une augmentation des frais uniques et des tendances mondiales en matière de TVA et de taxes environnementales, soulignant la nécessité pour les entreprises de s'adapter à la complexité fiscale croissante.
Der Bericht über die Umsatzsteuersätze und -regelungen zur Jahresmitte 2024 von Vertex zeigt einen signifikanten Anstieg der Änderungen lokaler Steuersätze und hebt die wachsende Abhängigkeit der Städte von den Umsatzsteuereinnahmen hervor. Zu den wichtigsten Ergebnissen gehören:
1. 67% Anstieg der Änderungen der Umsatzsteuersätze auf Stadtebene im Vergleich zum Vorjahr, mit 159 genehmigten Änderungen in der ersten Jahreshälfte 2024 gegenüber 95 im Jahr 2023.
2. Einführung von 30 neuen besteuerten Städten und 77 Bezirkssteuern, die einen zehnjährigen Trend zur Einführung neuer Steuern fortführt.
3. Die Kommunalverwaltungen haben die Umsatzsteuersätze erhöht, mit dreimal so vielen Erhöhungen auf Kreisebene wie Absenkungen und zwölfmal so vielen Erhöhungen in Städten wie Absenkungen.
Der Bericht weist auch auf einen Anstieg von einzigartigen Gebühren und globalen Trends bei der Mehrwertsteuer und Umweltsteuern hin und betont die Notwendigkeit für Unternehmen, sich an die zunehmende steuerliche Komplexität anzupassen.
- 67% year-over-year increase in city-level sales tax rate changes, indicating potential revenue growth for Vertex (VERX)
- Expansion of Vertex's fee imposition support from 400 to approximately 1,400 in two years
- Increasing complexity in tax management creates higher demand for Vertex's tax technology solutions
- Rapid changes in tax rates and rules may require frequent updates to Vertex's software, potentially increasing operational costs
Insights
The Vertex 2024 Mid-Year Sales Tax Rates and Rules Report reveals significant shifts in local tax policies, with potentially far-reaching implications for businesses and investors. The 67% year-over-year increase in city-level sales tax rate changes is particularly noteworthy, signaling a dramatic acceleration in local revenue-raising efforts.
This trend reflects growing fiscal pressures on municipalities, likely driven by factors such as inflation, rising costs of public services and higher borrowing costs. For investors, this could translate to increased operational complexities and compliance costs for businesses operating across multiple jurisdictions.
The proliferation of new taxing cities (30) and district taxes (77) in the first half of 2024 further complicates the tax landscape. This 'net-new taxation' trend, coupled with the surge in unique fees (from
From an investment perspective, companies with robust tax management systems and the ability to quickly adapt to changing local tax regimes may gain a competitive edge. Conversely, businesses lacking such capabilities could face increased compliance risks and operational inefficiencies.
The global trends highlighted, including the potential rise in environmental taxes in the EU, indicate that these complexities are not to the U.S. market. This could have implications for multinational corporations and investors with global portfolios.
Overall, this report underscores the growing importance of tax technology solutions in navigating an increasingly complex fiscal landscape, potentially benefiting companies like Vertex that provide such services.
The Vertex report's findings have significant implications for corporate financial planning and investor considerations. The sharp increase in local tax rate changes and new taxing jurisdictions points to a more volatile and unpredictable tax environment, which could impact companies' bottom lines and cash flow projections.
For investors, this trend may necessitate a closer scrutiny of companies' tax management capabilities and geographic revenue distribution. Businesses with significant exposure to areas experiencing frequent tax changes may face higher compliance costs and potential margin pressures.
The proliferation of specialized fees, such as airport, environmental and retail delivery fees, adds another layer of complexity to financial forecasting. This could particularly affect sectors like e-commerce, logistics and retail, potentially squeezing profit margins if these costs cannot be fully passed on to consumers.
From a market perspective, the report suggests potential opportunities in the tax technology sector. With the increasing complexity of tax compliance, demand for advanced tax management solutions is likely to grow. This could benefit companies like Vertex (NASDAQ:VERX) and its peers in the tax software industry.
However, it's important to note that while this trend may drive demand for tax technology solutions, it doesn't guarantee financial success for providers. Investors should carefully evaluate factors such as market share, technological capabilities and adaptability to evolving tax landscapes when considering investments in this sector.
Lastly, the global trends mentioned, particularly the potential rise in environmental taxes in the EU, highlight the need for a global perspective in financial analysis. Companies with international operations may need to factor in these evolving tax landscapes into their long-term financial strategies.
The 2024 Mid-Year Sales Tax Rates and Rules Report alerts indirect tax teams on the substantial number of tax rate changes through June 30.
KING OF PRUSSIA, Pa., July 25, 2024 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company”), a global provider of tax technology solutions, today released its latest findings from their Mid-Year Rates and Rules Report. The findings reveal increases in both local and new tax rates as cities across the country respond to economic pressures, highlighting an urgent need for revenue at the municipal level.
The 2024 Mid-Year Sales Tax Rates and Rules report outlines the evolving landscape of local tax implementation, proliferation of fees, and increasing complexity of tax compliance for businesses across the U.S. This is reflected by a
"The landscape of sales tax and indirect taxation continues to change rapidly, both domestically and globally," said Michael Bernard, Vertex Chief Tax Officer. "The ongoing trend of cities and districts leveraging sales taxes and fees remains consistent, following a decade-long trend. This coupled with the proliferation of specialized fees and the global focus on digital VAT initiatives, underscores the increasing intricacies of tax compliance for businesses. It's crucial for organizations to stay informed and agile, leveraging advanced tax technologies to manage these multifaceted challenges confidently and effectively."
Key findings from the Vertex 2024 Mid-Year Sales Tax Rates and Rules report include:
- City-level spikes: The first half of 2024 witnessed an unprecedented spike in city-level sales tax rate adjustments. While city jurisdictions enacted 95 rate changes in the first six months of 2023, the same period in 2024 saw a dramatic increase to 159 authorized sales tax rate changes – a striking
67% year-over-year increase. This significant acceleration in local tax rate modifications reflects cities' proactive approach to revenue management in response to evolving economic conditions and budgetary pressures. - Net-new taxation: The adoption of new taxing cities (30) and district taxes (77) in the first half of 2024 remains high, as establishing new taxing cities and districts is a simpler and faster process than altering state sales tax rates. This decade-long trend of net-new taxation (taxing cities and district taxes) is in stark contrast to state-level tax changes, which typically require a lengthy legislative process.
- Looking local: Local governments raised sales tax rates with three times more county-level increases than decreases, and 12 times more city increases than decreases. The move towards local-level taxation is driven by several key factors: persistent inflation, the ongoing need to maintain and improve public services, and the rising costs of issuing bonds due to higher interest rates.
- New and unique fees: States are increasingly implementing various fees, including airport, environmental, special district and retail delivery fees. Two years ago, Vertex solutions supported roughly 400 fee impositions; today, that number is approximately 1,400.
Global Trends
On the global front, while most nations are refraining from increasing VAT rates to avoid anti-competitive effects and inflationary pressures, VAT remains a crucial funding source for governments. Additionally, the EU is expected to see a rise in environmental taxes, particularly carbon-related fees. These trends underscore the evolving nature of indirect taxation globally, with a focus on real and near-time reporting.
Implications for Indirect Tax Teams
Increasing complexity in business structures and the proliferation of new fees demand a more agile and technologically advanced approach to tax management. Moreover, the global shift towards digital VAT initiatives and environmental taxes further complicates international operations.
To effectively navigate these complexities, indirect tax teams must:
- Update software systems;
- Streamline invoicing processes;
- Navigate a complex compliance landscape across multiple jurisdictions.
This necessitates enhanced cross-functional collaboration, especially with IT and finance departments. They must also prioritize continuous education, advocate for advanced tax management solutions, and remain proactive in monitoring and adapting to regulatory developments worldwide.
For more information, download the full report here or visit our 2024 tax trends page.
About Vertex
Vertex is a leading global provider of indirect tax software and solutions. The company's mission is to deliver the most trusted tax technology enabling global businesses to transact, comply and grow with confidence. Vertex provides solutions that can be tailored to specific industries for major lines of indirect tax, including sales and consumer use, value added and payroll. Headquartered in North America, and with offices in South America and Europe, Vertex employs over 1,400 professionals and serves companies across the globe.
For more information, visit www.vertexinc.com or follow us on Twitter and LinkedIn.
Media Contact:
Rachel Litcofsky
Vertex, Inc.
mediainquiries@vertexinc.com
Investor Relations contact:
Joe Crivelli
Vertex, Inc.
ir@vertexinc.com
Copyright © 2024 Vertex, Inc. All rights reserved. The information contained herein is intended for information purposes only, may change at any time in the future, and is not legal or tax advice. The product direction and potential roadmap information is not a guarantee, may not be incorporated into any contract, and is not a commitment to deliver any material, code, or functionality. This information should not be relied upon in making purchasing, legal, or tax decisions. The development, release, and timing of any features or functionality described for Vertex's products remains at the sole discretion of Vertex, Inc. Any statements in this release that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to various risks and uncertainties described in Vertex's filings with the U.S. Securities and Exchange Commission ("SEC") that could cause actual results to differ materially from expectations. Vertex cautions readers not to place undue reliance on these forward-looking statements which Vertex has no obligation to update.
FAQ
What are the key findings of Vertex's 2024 Mid-Year Sales Tax Rates and Rules Report?
How many city-level sales tax rate changes were authorized in the first half of 2024 according to Vertex (VERX)?
What global tax trends does the Vertex (VERX) 2024 Mid-Year Report highlight?
How has Vertex's (VERX) support for fee impositions changed in recent years?
