Sales During Transitional Periods (Transitional Sales)


There is a transitional period for taxable services when a sales tax rate change affects the billing period for a taxable service that begins before—and ends after—the effective date of the rate change.

Note: Transitional periods do not affect sales of tangible personal property (goods). Sales or use tax applies on the date the buyer takes possession or title of the goods, whichever happens first.

Types of Sales Affected

Transitional periods may affect:

  • Businesses that sell taxable services
  • Construction contractors
  • Maintenance agreements

You need to check your invoices to see if sales tax was correctly applied to these services, if they are affected by a transitional period.

If you were not charged sales tax or the sales tax charged is incorrect, you must calculate and pay any use tax due. For more information, see Use Tax for Businesses or Use Tax for Individuals.

Handling Transitional Sales

How you handle a transitional sale depends on if:

  • The sales tax rate increased
  • The sales tax rate decreased
  • You have a construction contract



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