Update Sales and Use Tax: Tax Base and Taxability Updates Across Various States

• Hawaii: The Hawaii Department of Taxation issued guidance on general excise tax (GET) exemptions for amounts received by certain healthcare providers under Medicare, Medicaid, or TRICARE. Eligible providers, including hospitals and licensed physicians, can exempt amounts received directly from these programs, including patient deductibles and copayments, provided the services are covered.
• Kentucky: The Kentucky Department of Revenue clarified that tariffs passed on to retail customers as part of the sale are subject to sales and use tax. Tariff charges included on a retail receipt are taxable, regardless of whether they are itemized, as they do not fall under the exemptions for taxes imposed directly on the purchaser.
• Maine: New legislation (LD 210) expands the list of services subject to Maine’s sales and use tax, including telecommunications services and digital audiovisual services. It exempts 95% of the sale price for certain fabrication services and adds new exemptions for durable medical equipment and mobile telecommunications services, effective January 1, 2026.
• New York: The New York Department of Taxation and Finance issued a tax bulletin stating that sales tax must be collected on hotel and short-term rental unit occupancy charges exceeding $2.00 per day. Specific rules apply to booking services and short-term rental operators, detailing various exemptions and additional charges.
• Wisconsin: The Wisconsin Department of Revenue indicated that the entire sales price of taxable products, including tariffs, is subject to sales or use tax. Additionally, a new law (SB 45) will eliminate the sales tax on household energy bills and exempt certain information products used by insurance companies starting October 1, 2025.

Source EY

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