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What is home rule? How does it affect sales tax?
In the realm of sales tax, “home rule” refers to cities, counties, or other local governments that have the authority to administer and establish their own sales tax rates and rules.
Home rule authority varies by state and jurisdiction. Five states — Alabama, Alaska, Arizona, Colorado, and Louisiana — allow localities to have total home rule, making sales tax compliance especially challenging and time-consuming for businesses transacting in them.
Not only can local jurisdictions within total home rule states establish their own sales and use tax rates and certain taxability rules, but they may require businesses to file sales and use tax returns and remittances directly with the local tax department (rather than with the state department of revenue), and they often have different filing schedules than their respective states.