KING OF PRUSSIA, PA — Vertex, Inc. (NASDAQ: VERX) reported that the average combined U.S. sales tax rate rose to 10.1881% in the first half of 2026, its highest level in a decade and the first increase in four years, as state and local governments made more rate changes and widened taxation of services and digital transactions.
The findings, contained in Vertex’s 2026 Mid-Year U.S. Sales Tax Rates and Rules Report, point to mounting compliance pressure for companies as governments increasingly rely on sales taxes, excise taxes, fees and broader tax bases to raise revenue.
U.S. jurisdictions recorded 463 combined sales tax rate changes and newly imposed rates during the first six months of 2026, up from 408 in the same period last year, according to Vertex. County-level changes during the half already exceeded the number recorded in any full year during the previous five years, while city-level activity also increased sharply from the first half of 2025.
The shift comes as pandemic-era federal aid recedes and support for some government programs declines, while measures of state rainy-day funds have begun falling, according to the report. At the same time, political pressure to restrain income and property taxes is pushing some jurisdictions toward consumption taxes, fees and spending reductions.
The composition of the tax base is also changing as economic activity continues shifting toward services and digital products.
Texas expanded the range of data-processing services subject to sales tax, while Washington broadened its retail sales tax to include a range of business, personal and professional services. Nebraska and Maryland have also considered broader taxation of services, according to the report.
That combination of higher rates, more frequent local changes and broader taxable categories increases the operational burden on companies that sell across multiple jurisdictions.
“Businesses can no longer treat sales tax changes as routine compliance updates,” Chris Hall, senior tax officer at Vertex, stated. “Rate and rule changes are happening with greater frequency at a local level across more categories of goods and services.”
The pressure extends beyond the U.S. as governments increasingly deploy automated enforcement, electronic invoicing and real-time reporting systems.
Tax administrations globally are expanding the use of technology to detect errors, anomalies and potential fraud, increasing the importance of consistent transaction-level tax data, according to Vertex.
Electronic invoicing mandates are also advancing at different speeds across countries. Vertex cited recent developments in Spain, France, Germany, Belgium, Croatia, the United Arab Emirates, Slovakia, Sri Lanka, Malaysia and the Dominican Republic.
For multinational companies, those differing requirements can add another layer of compliance complexity as tax authorities demand transaction information more quickly and in increasingly standardized electronic formats.
Vertex also cautioned that temporary value-added tax reductions, exemptions, sales tax holidays and excise-tax cuts can ease costs in the short term while reducing government revenue, potentially creating pressure for higher indirect tax rates or broader tax bases later.
The trends leave companies facing tax obligations that are increasingly determined not only by where transactions occur but also by the type of product, service or digital offering being sold and the reporting systems required by individual jurisdictions.
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