October 2026 Sales Tax Rate Changes: What CA, PA & UT Businesses Must Know

California: Los Angeles County’s Rate Climbed to 10.250%

The California Department of Tax and Fee Administration (CDTFA) recently published Special Notice L-1037. The notice confirmed the newly voter-approved district tax rates to take effect on October 1, 2026. As a result, the countywide rate in Los Angeles County increased to 10.250%. The cities of Perris and Red Bluff adopted new district taxes on the same date. This recent change will impact a significant number of businesses selling to customers in Los Angeles County.

As a business owner or online retailer, if your POS or tax software is using a rate table from even six months ago, it could be outdated and charging the wrong rate. It is advisable to compare it to the latest CDTFA rate table before your next filing. Even a small rate differential can create a modest liability on audit, especially for high-volume, low-margin businesses.

Pennsylvania: Local Tax Now Follows the Customer

While Pennsylvania’s sales tax rate remains at 6% at the state level, sales into Philadelphia add an additional 2% and sales into Allegheny County add an additional 1%. For years, the local rate was based on business location, which has shifted to customer location, or destination based sourcing, to determine the rate. Before this change, the jurisdiction where you were located determined who owed these local taxes.

While the law was previously passed, the Pennsylvania Department of Revenue delayed enforcement until October 1, 2026, in order to give businesses time to adjust. Due to the change, a business outside of these two counties in Pennsylvania may now be required to collect local tax in these two counties when selling goods or services to customers with a Philadelphia or Allegheny address.

Utah: The First Tax of Its Kind Is Now Live

Utah has enacted Senate Bill 73, Online Age Verification Amendments. Under the new law, effective October 1, 2026, a 2% excise tax applies to the sales price of covered digital transactions, such as streaming and subscriptions, by a covered entity.

This new tax is technically an excise tax instead of a sales tax. From the customer’s end there is not much of a difference but it can be different from a legal challenge perspective. Further, the burden of the tax is technically on the business, which can determine who should claim refunds and other mechanical issues. Further, a “covered entity” is required to conduct age verification if more than a third of its site’s content meets the legal definition of material harmful to minors. Although this change only impacts a small percentage of businesses, if your business operates within this narrow definition, October 1 is the effective date.

What To Do About This Right Now

Although many businesses do an annual review of rates and rule changes, these new changes show the never-ending complexity and compliance issues created by sales and use tax and selling into multiple states. States, counties, and cities are constantly adopting new rules at not-so-obvious times. If you sell across the country or into several states, a more periodic, monthly or at least quarterly review is important to consider if you don’t have an automated software system to catch these nuances.

The best place to find the most up-to-date tax rates for a state is on the state’s website. Vendors are usually slow to update their rate tables. Out-of-date rate tables can put you at risk of over- or under-collecting tax. This is especially true for complex tax systems, like Pennsylvania and California. Pennsylvania’s sourcing rules and California’s district rates change frequently.

If you aren’t sure if anything described here relates to your business, that lack of certainty is the most critical issue you need to address. Our team of attorneys, accountants, and former state auditors evaluates similar situations routinely. It’s always less costly to identify potential issues early, and October is a lot earlier than the frustrating surprise of an audit two years from now.

Frequently Asked Questions

Did California’s sales tax rate change statewide on October 1, 2026?

No. Changes made under CDTFA Special Notice L-1037 affect only certain cities and counties, including Los Angeles County, Perris, and Red Bluff. The state-charged base rate did not change.

Do I need to change my Pennsylvania systems if I only occasionally ship into Philadelphia or Allegheny County?

Yes. If you already collect Pennsylvania state sales tax, you will need to charge local tax using the destination principle for any sale shipped into Philadelphia or Allegheny County.

Is Utah’s new digital content tax a sales tax businesses must collect from customers?

No, this is an excise tax imposed directly on a covered business, based on the sales price of covered transactions. It is not a sales tax that the customer owes.

How do I know if my business is a “covered entity” under Utah’s new law?

The trigger occurs when more than one-third of your website contains content that Utah defines as material harmful to minors. The vast majority of businesses are not impacted.

What happens if I keep collecting the old California or Pennsylvania rate by mistake?

Undercollecting creates a debt you are obligated to pay once identified. Overcollecting creates an obligation to give refunds to customers and/or to send the excess amounts to the state. These debts will increase with the passage of time.

How often do states update their local sales tax rates?

States with district or local option taxes generally revise their rates quarterly, with effect from January 1, April 1, July 1 and October 1. A quarterly reminder is warranted.

Where can I find the current sales tax rate for a state?

The best source is the state’s own tax agency, not a vendor file. For California, the CDTFA publishes a downloadable rate table and an address lookup. For Pennsylvania, the Department of Revenue lists the state and local rates. Check them before each quarter begins.

This article is for general informational purposes only and does not constitute legal, tax, or accounting advice. Sales tax rates, sourcing rules, and statutory definitions change frequently and vary by jurisdiction and by the specific facts of your situation. You should not rely on this article as a substitute for advice from a qualified professional. No attorney-client relationship is created by reading this article.

About the Author

Gerald J. "Jerry" Donnini II is a sales tax attorney and the founder of Sales Tax Helper, a national platform that helps businesses find, fix, and prevent sales tax exposure before it becomes a problem. Over a 15-year career, he has represented businesses in more than 5,000 sales tax audits, appeals, and disputes across 40+ states. He holds an LLM in Taxation from New York University, is co-author of a CCH treatise on state sales and use tax, and serves as an adjunct law professor. Jerry has saved businesses more than $500 million in sales tax assessments. His framework, Find It. Fix It. Defend It., guides businesses from initial nexus diagnosis through voluntary disclosure and, when necessary, full audit defense.