Sales Tax Across the States: 2025 ABA SALT Report Breaks Down Marketplace, Sourcing, and Legislative Shifts

The ABA SALT Sales and Use Tax Subcommittee released its May 2025 report with a granular look at the shifting terrain of sales tax laws across the United States. From sourcing battles to marketplace facilitator clean-up and industry-specific audits, the report breaks down state-by-state updates that reveal where SALT enforcement is headed.

This article provides a full summary of each state highlighted in the report—offering businesses and tax professionals an in-depth roadmap for compliance in 2025 and beyond.

🛒 Marketplace Facilitators: Still Under Fire

States continue to revise and re-interpret marketplace facilitator statutes. Key issues include exemptions for certain services, responsibility for exempt sales, and recordkeeping burdens placed on platforms.

📍 Sales Tax Sourcing: No Uniformity in Sight

Sourcing rules remain fragmented. Some states rely on destination sourcing, others apply origin rules for services, and a few are experimenting with blended approaches. Digital goods complicate things even more.

📊 State-by-State Developments

💬 Alabama

Revenue Department is exploring further guidance on bundled transactions and software sourcing. Clarification is expected in late 2025 following stakeholder input.

🛒 Arizona

Proposed legislation may change the sourcing of software as a service (SaaS) from origin to destination. The state’s Transaction Privilege Tax (TPT) structure remains uniquely complex for multistate sellers.

🏙️ California

The CDTFA is updating its audit guidance for marketplace facilitators. Several audits in 2024 uncovered compliance gaps where platforms failed to properly collect or retain resale certificates. Legislation is also pending to clarify facilitator responsibilities for shipping and handling charges.

🏗️ Colorado

Local tax sourcing continues to cause friction. The state is weighing adjustments to the destination sourcing exception for small retailers and reviewing whether certain SaaS transactions should be sourced to the location of access rather than the billing address.

🌽 Illinois

Ongoing litigation involves sourcing of services provided remotely but consumed in Illinois. At the same time, the Department issued new regulations around marketplace facilitator thresholds for small platforms.

🌾 Iowa

The state clarified that online learning services fall under the digital products category and are subject to sales tax when delivered electronically. This closes a long-standing ambiguity over taxability of remote training platforms.

🛬 Kansas

The legislature rejected a bill that would have provided a sales tax exemption for certain digital advertising services. The Department remains active in reviewing whether bundled advertising/consulting contracts are taxable.

🏖️ Louisiana

Disputes continue over local tax audits and the role of the Louisiana Uniform Local Sales Tax Board. A recent appellate ruling confirmed that certain software access fees are taxable as non-printed digital goods.

🏛️ Maryland

The Comptroller’s office is reviewing whether influencer advertising revenue triggers marketplace collection obligations under Maryland’s broad facilitator statute.

🌊 Massachusetts

Massachusetts issued final guidance clarifying that cloud-based software platforms are taxable when accessed by users located in the state, regardless of where the vendor is based. Remote sellers must use IP geolocation for sourcing.

⛰️ Montana

Although a no-sales-tax state, Montana continues to track other jurisdictions’ treatment of services and may require more detailed disclosures on out-of-state receipts for corporate income tax purposes.

🌲 Oregon

Oregon is not a sales tax state, but it is actively monitoring marketplace facilitator issues due to nexus concerns related to Oregon-headquartered sellers. Remote seller thresholds from other states are impacting local business decisions.

🌞 South Carolina

The Department issued a private letter ruling concluding that delivery platforms (e.g., grocery and restaurant apps) are marketplace facilitators and must collect tax on both goods and delivery fees. A challenge may be forthcoming in court.

🏔️ Utah

Legislation passed requiring marketplace facilitators to separately itemize taxes collected on behalf of third-party sellers and maintain five years of transaction-level data. Failure to comply may result in seller liability.

🌻 Washington

Washington continues to expand its sourcing requirements for digital products. The state recently confirmed that live webinars and on-demand recordings are subject to destination sourcing rules if the purchaser’s location is known.

🤠 Texas

The Comptroller published guidance reaffirming that cloud-based project management tools are taxable data processing services. However, the guidance leaves open questions about bundled SaaS offerings and user-based licensing models.

🦀 Virginia

A new tax bulletin clarifies the taxability of non-fungible tokens (NFTs) as digital products. Sales tax applies when the buyer receives any rights or digital access features. NFTs without tangible or digital benefits are not taxed—for now.

🧾 West Virginia

West Virginia issued new resale certificate guidelines aimed at reducing invalid claims in audits. Retailers using drop shipment models should expect increased scrutiny.

🌉 Missouri

Audit focus continues on remote sellers using fulfillment services. A new FAQ series is in development to help taxpayers understand origin sourcing rules under the state’s economic nexus law.

🧭 Final Thoughts: SALT Is Local, But the Trends Are National

The 2025 report reveals that no two states treat marketplace facilitators or digital services the same—and sourcing rules vary wildly. With rapid technological change, states are adjusting faster than courts or Congress can keep up. Businesses must stay agile, track developments weekly, and seek clarity wherever possible.

One thing is clear: SALT policy in 2025 is anything but static—and sales tax professionals will remain in high demand.