In March 2026, Vail Resorts announced it would implement a “blended” 3.2% sales tax on its Epic Pass products. The company aimed to simplify the complexities of operating in over a dozen states, each with different tax rates, rules, and exemptions, by consolidating them into a single rate.
New Hampshire does not impose a sales tax. When residents purchasing Epic Pass products for use exclusively at New Hampshire resorts saw a sales tax charge at checkout, the state’s attorney general initiated an investigation. Governor Kelly Ayotte stated that New Hampshire would not let “an out-of-state company try to sneak one in.” Within weeks, Vail Resorts responded by offering New Hampshire-only pass options without any tax.
The blended rate problem
Vail’s error is common among companies operating across multiple states. Multi-state tax compliance is complex, with varying rates and exemptions. A transaction may be taxable in one state and exempt in another. While averaging obligations into a single rate may seem practical, it presents legal risks.
Sales tax obligations are determined by jurisdiction, not by averaging rates. A company cannot apply a Colorado or Vermont rate to a New Hampshire customer solely because those states are part of the same product network. Each transaction must be assessed according to the rules of the applicable state. Vail applied a blended national rate to a state with no tax, drawing attention from both regulators and customers.
The broader lesson
Vail Resorts has compliance resources beyond what most companies possess. If such an organization can make a public error that prompts a state attorney general investigation, the risk is even greater for mid-market companies managing exemption certificates and use tax across multiple jurisdictions.
The solution is not to simplify tax calculation into a single rate, but to automate accurate calculations by jurisdiction. Each transaction should be evaluated according to the current rules AUTOSOLV provides this capability. AP invoices are reviewed by jurisdiction. Use tax is identified and accrued at the transaction level. No blending, no averaging, no surprises from a state attorney general.
For more on how multi-state use tax accrual works, see How to Automate Use Tax Accrual in Your Accounts Payable Process and How Sales Tax Software Monitors Economic Nexus Thresholds.
Frequently Asked Questions
What is a blended sales tax rate?
A blended sales tax rate is a single, averaged tax rate applied across multiple jurisdictions instead of calculating the exact tax owed in each state or locality. While simpler to implement, this approach can create compliance risks if it does not align with specific state tax laws.
Why did Vail Resorts face scrutiny over its sales tax approach?
Vail Resorts faced scrutiny because it applied a blended sales tax rate to its Epic Pass product, including customers in states like New Hampshire that do not have a statewide sales tax. This raised concerns about whether the company was collecting and remitting tax in accordance with individual state requirements.
What is economic nexus and how does it affect multi-state sales tax?
Economic nexus refers to a business’s obligation to collect and remit sales tax in a state based on sales volume or transaction thresholds, even without a physical presence. It significantly expands the number of jurisdictions where businesses must comply with tax laws.
Why is multi-state sales tax compliance so complex?
Multi-state sales tax compliance is complex because each state—and often local jurisdictions within states—has its own tax rates, rules, exemptions, and filing requirements. Businesses operating across multiple states must track and apply these rules accurately to avoid audits and penalties.
Can businesses simplify sales tax calculations with automation?
Yes, sales tax automation software can calculate accurate tax rates in real time, manage exemption certificates, and ensure compliance across jurisdictions. Automation reduces the risk of errors associated with manual processes and helps businesses scale more efficiently.
What risks come from using incorrect sales tax methods?
Using incorrect sales tax methods, such as applying blended rates without proper justification, can lead to under- or over-collection of tax, customer disputes, regulatory audits, and financial penalties. It can also damage brand trust if customers feel they were charged incorrectly.
