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State and local tax advisor: July 2025

Authors: Mike Merkel, Ron Cook, Jeanette Tolar, Stephen Palmer

July 28, 2025 / 29 min read

Have you heard about the latest changes in state and local taxes? Check out our July 2025 roundup here.

The states covered in this issue of our monthly tax advisor include:

California

Corporate, personal income taxes: Pass-through entity tax, apportionment, film credit, and other changes enacted

In a budget trailer bill, California enacted corporation franchise (income) and personal income tax changes relating to:

Pass-through entity tax

For taxable years beginning on or after Jan. 1, 2026, and before Jan. 1, 2031, California will continue to allow qualified pass-through entities to elect to pay tax at the entity level if the federal cap on state and local tax (SALT) deductions is continued. Partners, shareholders, or members of an electing entity will continue to be allowed a credit for their share of the elective tax paid. However, if the electing entity doesn’t make a payment by June 15 of the year of the election, or if it makes a payment that’s less than the required amount, a reduced credit will be allowed.

Also, if a qualified pass-through entity elects to pay tax at the entity level for its taxable year beginning on or after Jan. 1, 2025, and before Jan. 1, 2026, and files its return on a fiscal year basis, the partners, shareholders, or members of the electing entity will be allowed to claim a credit for their share of the elective tax paid in their taxable year beginning on or after Jan. 1, 2026, and before Jan. 1, 2027.

Apportionment for financial institutions

For taxable years beginning on or after Jan. 1, 2025, financial institutions must use a single sales factor apportionment formula for purposes of apportioning multistate income. Prior to 2025, businesses that derived more than 50% of their gross business receipts from banking or financial business activities apportioned their business income using an equally weighted, three-factor formula.

Film credits

For each of the 2025-26 through 2029-30 fiscal years, the aggregate amount of credits that may be allocated under California Film and Television Tax Credit Program 4.0 has been increased from $330 to $750 million.

Historic structure rehabilitation credits

Beginning July 1, 2025, any historic structure rehabilitation credits that remain unallocated from the 2025 calendar year, plus unallocated credits from the prior year, must be made available within 90 days to applicants with qualified rehabilitation expenditures of $1 million or more for affordable housing projects that were eligible for, but didn’t receive, a previous allocation.

Military benefits exclusions

For taxable years beginning on or after Jan. 1, 2025, and before Jan. 1, 2030, a qualified taxpayer may exclude from gross income up to $20,000 of retirement pay received by the taxpayer from the federal government for service performed in the uniformed services. Also, for the same tax years, a surviving spouse or other named beneficiary may exclude from gross income up to $20,000 of annuity payments received pursuant to a U.S. Department of Defense Survivor Benefit Plan. “Qualified taxpayer” for purposes of these exclusions means an individual whose adjusted gross income for the taxable year doesn’t exceed $125,000, or a surviving spouse or spouses filing a joint return whose adjusted gross income for the taxable year doesn’t exceed $250,000.

Wildfire settlements exclusion

For taxable years beginning on or after Jan. 1, 2021, and before Jan. 1, 2030, taxpayers who reside within, own real property in, or have a place of business within, an area damaged by a California wildfire may exclude from gross income any amount received from a settlement entity in connection with the wildfire.

Chiquita canyon elevated temperature landfill event payments exclusion

For taxable years beginning on or after Jan. 1, 2024, and before Jan. 1, 2029, taxpayers may exclude from gross income any payments received from a governmental agency or Waste Connections, Inc., or a related entity on or after March 1, 2024, as compensation for costs and losses resulting from the Chiquita Canyon elevated temperature landfill event in the County of Los Angeles.

Ch. 17 (S.B. 132), Laws 2025, effective Jun. 27, 2025, and applicable as noted.

Colorado

Sales and use tax: Sales of streaming subscriptions were taxable

A company’s sales of streaming subscriptions, which gave customers access to its online library of movies, television shows, and games, were taxable as sales of tangible personal property under Colorado sales tax law. The company contended that “tangible personal property” included only physical objects. The Department of Revenue argued that the definition of “tangible personal property” was broad enough to encompass things that were beyond the sense of touch.

The Colorado Court of Appeals agreed with the department’s interpretation. The court noted that the sales tax statute expressly stated that “tangible personal property” meant “corporeal personal property,” and concluded that the term “corporeal” encompassed not just things with a physical body but rather all things perceptible to any of the bodily senses. Here, the images and sounds that a subscription permitted customers to view and hear physically existed because the customers could perceive them with their eyes and ears. Thus, the subscriptions were corporeal, and the sales were subject to tax.

Netflix, Inc. v. Department of Revenue of Colorado, COAppCt, No. 24CA1019, Jul. 3, 2025.

Connecticut

Multiple taxes: Budget enacted, alternative NOL rule for certain combined groups eliminated and corporation business tax surcharge extended

The Connecticut state budget for the biennium ending June 30, 2027, is enacted. The budget contains several tax provisions.

Net operating loss (NOL) deduction for certain combined groups

The alternative NOL rule that currently applies to certain combined groups that had more than $6 billion in NOLs from pre-2013 tax years, which subjects them to the standard NOL carryforward limitation applicable to other corporations, is eliminated. The combined unitary reporting law allowed combined groups with over $6 billion in NOLs from pre-2013 tax years to make a special election during the 2015 income year that allowed the groups to give up 50% of their pre-2015 losses in exchange for using the remaining loss carryover to reduce their tax by up to $2.5 million in any income year (before applying the corporation business tax surcharge and any tax credits) beginning in 2015. Eligible combined groups had to make this election on their 2015 income year returns. Under current law, combined groups that made this election are only subject to the standard NOL limitation once they have applied all of their pre-2015 operating losses in this way.

This alternative NOL rule is sunset and instead these groups must recalculate their remaining loss carryover on their 2025 income year return as if they had not been required to give up 50% of their pre-2015 losses to make this election. This allows them to use these recalculated operating losses beginning with the 2025 income year, subject to the corporation business tax law’s provisions, including the standard NOL limitation and carryforward period, based on when the losses were incurred.

This provision is effective June 30, 2025, and applicable to income years beginning on or after Jan. 1, 2025.

Corporation business tax surcharge

Effective June 30, 2025, the 10% corporation business tax surcharge is extended for three additional years, to the 2026 through 2028 income years (formerly, the surcharge was scheduled to expire after the 2025 income year).

R&D and R&E tax credits for qualifying LLC

Effective June 30, 2025, and applicable to income years beginning on or after Jan. 1, 2025, a single member limited liability company (LLC) that meets specified employment and industry parameters is allowed to earn research and development (R&D) and research and experimental expenditures (R&E) credits. In order to qualify for the tax credits, the LLC must have over 3,000 employees in Connecticut and be engaged in manufacturing, with expertise in mechatronics, alignment and sensor technology, and optical fabrication.

Repeal of digital animation tax credit

Effective June 30, 2025, the digital animation tax credit, which is available for eligible companies with in-state studio facilities and 200 or more in-state employees that incur eligible production expenses and costs in Connecticut, is repealed.

Workforce housing opportunity development tax credits

Effective June 30, 2025, and applicable to income and tax years beginning on or after Jan. 1, 2025, a tax credit is established and administered by the Department of Housing for people and entities making cash contributions of at least $250 to eligible developers building or rehabilitating qualifying workforce housing opportunity development projects in federally designated opportunity zones. The credit amount is set at 50% of eligible cash contributions.

Cap on a combined group’s tax liability on a unitary basis

Effective June 30, 2025, and starting with the 2025 income year, the $2.5 million cap on the amount a combined group’s tax, calculated on a combined unitary basis, can exceed the tax it would have paid on a separate basis (i.e., its nexus combined base tax), is eliminated.

Refund value of R&D and R&E credits for qualifying small biotechnology

Effective July 1, 2025, and applicable to income years beginning on or after Jan. 1, 2025, the cash refund a qualifying small biotechnology company may receive for R&D and R&E tax credits is increased from 65 to 90% of the credit amount.

Tax on nursing homes and intermediate care facilities (ICFs)

Effective July 1, 2026, the quarterly user fee on nursing homes and ICFs is terminated, and instead a quarterly 6% tax is imposed on their revenue.

Sales and use tax exemption for ambulances

Effective July 1, 2025, and applicable to sales that occur on or after that date, a sales and use tax exemption is available for: 1) ambulance-type vehicles used exclusively to transport medically incapacitated individuals, except those used to transport these individuals for payment; and 2) ambulances operating under a license or certificate issued by the Department of Public Health.

Sales and use tax exemption for certain aircraft industry joint ventures

Effective July 1, 2025, the duration of the sales and use tax exemption for specified business services rendered between participants in certain kinds of joint ventures in the aircraft industry that existed before Jan. 1, 1986, is extended from 40 to 50 consecutive years.

Increase in earned income tax credit (EITC)

Effective June 30, 2025, and applicable to tax years beginning on or after Jan. 1, 2025, the Connecticut EITC is increased by $250 for eligible taxpayers with at least one qualifying child for federal income tax purposes.

Income tax credit for family childcare homeowners

Effective Jan. 1, 2026, and applicable to tax years starting on or after that date, a refundable $500 personal income tax credit is available for taxpayers who own a state-licensed family childcare home.

Farm investment tax credit

Effective Jan. 1, 2026, and applicable to income and tax years beginning on or after that date, a refundable business tax credit is enacted for farmers’ investments in eligible machinery, equipment, and buildings. A farmer is eligible for the credit if the farmer is a Connecticut taxpayer whose federal gross income from farming for the income or tax year is at least two-thirds of their federal gross income from all sources over $30,000 (i.e., “excess federal gross income”). The credit amount is equal to 20% of the amount spent or incurred on the eligible property.

New CHET contribution tax credit

Effective July 1, 2025, and applicable to income and tax years starting on or after Jan. 1, 2025, a new business tax credit is enacted for employer contributions to a qualifying employee’s Connecticut Higher Education Trust (CHET) account. The credit is equal to 25% of the employer’s contribution and is capped at $500 per employee per income or tax year. The credit may be applied against the corporation business, insurance premiums, or personal income taxes but not the withholding tax.

University of Connecticut tax credit incentive program

Effective June 30, 2025, and applicable to tax and income years beginning on or after Jan. 1, 2025, the University of Connecticut is authorized to establish and administer a tax credit incentive program for the purposes of encouraging the promotion and public recognition of the university and its programs, services, or mission. The credit amount is 50% of the payments made for the tax or income year, and is capped at $500,000 per taxpayer for each tax or income year. The total credits allowed for each calendar year are capped at $5 million.

Pilot program to collect certain unpaid state taxes, penalties, and interest

Effective June 30, 2025, the secretary of the Office of Policy and Management (OPM) and the commissioner of the Connecticut Department of Revenue Services are required to arrange a pilot program to collect unpaid state taxes, penalties, and interest due from anyone receiving payments from any state department, board, council, commission, institution, or other state executive branch agency.

Temporary suspension of income tax withholding requirement on certain lump-sum retirement income distributions

Effective July 1, 2025, the income tax withholding requirement on lump-sum distributions from pensions, annuities, and other specified sources from July 1, 2025, through Dec. 31, 2026, is suspended. However, retirement plan servicers must withhold taxes from such distributions if the payee has requested it.

Sales and use tax exemption for precious metals and rare or antique coins expanded

Effective July 1, 2027, and applicable to sales that occur on or after that date, the existing sales and use tax exemption for certain sales of rare or antique coins, gold or silver bullion, and gold or silver legal tender of any nation traded according to its value as a precious metal, is expanded. The exemption applies to all sales (formerly, it applied only to those valued at $1,000 or more). Moreover, the exemption is extended to sales of palladium bullion and platinum, and the gold and silver bullion exemption is limited to those with a purity level of at least 90%.

Public Act 25-168 (H.B. 7287), Laws 2025, effective and applicable as noted; Bill Analysis, Office of Legislative Research, Jun. 3, 2025.

Georgia

Corporate, personal income taxes: Jobs tax credit regulations amended

Georgia has amended the Job Tax Credit program regulation. One significant change is the explicit prohibition against claiming or carrying forward the Job Tax Credit for any project that also receives an investment tax credit or an optional investment tax credit under related sections of Georgia law. The rule also revised some definitions and updated the eligibility criteria, particularly for businesses operating in Tier 1 and Tier 2 counties.

From an administrative standpoint, the amended rule provides clearer guidance on the application process, including specific documentation requirements and deadlines. It also outlines audit and compliance procedures more explicitly, giving the Georgia Department of Revenue enhanced oversight capabilities.

Regulation 560-7-8-.36, Georgia Department of Revenue, effective June 24, 2025, applicable to taxable years beginning on or after Jan. 1, 2025.

Corporate, personal income taxes: Optional investment tax credit amended

Georgia made revisions to the Optional Investment Tax Credit rules that includes several key changes aimed at clarifying eligibility and improving the administration of the credit. One of the most significant updates is the explicit disqualification of projects that had previously received other investment-related credits under O.C.G.A. Sections 48-7-40 through 48-7-40.4 from also receiving the optional investment tax credit. This change reinforces the rule against double-dipping and ensures that taxpayers can’t claim multiple credits for the same investment project across different tax years.

Additionally, the amended rule clarifies how S corporations are to apply the credit, specifying that the credit must be applied at the entity level if the corporation has corporate income tax liability. This clarification helps streamline compliance for pass-through entities and aligns the rule with broader corporate tax treatment standards. The amendment also includes updated language to reflect current statutory references.

Regulation 560-7-8-.40, Georgia Department of Revenue, effective June 24, 2025.

Illinois

Sales and use tax: Rules implement important 2025 tax changes

Illinois amended regulations to implement laws that changed the tax obligation for retailers maintaining a place of business who make sales to customers in the state from a location or locations outside the state. Effective before Jan. 1, 2025, the sales were subject only to Illinois use tax. Effective beginning Jan. 1, 2025, these retailers are subject to state and local sales tax and must determine tax liability based on destination sourcing rules. Specific amendments address the treatment of:

The amended rules also include new and revised examples.

86 Ill. Adm. Code Sec. 130.225, 130.530, 130.715, 130.2075, 131.105, 131.107, 131.110, 131.150, 131.155, 150.801, 150.802, 150.1305, 270.115, Illinois Department of Revenue, effective June 13, 2025.

Corporate, personal income taxes: Tax changes may increase current year tax liabilities

Illinois issued guidance discussing income tax changes enacted by budget revenue legislation that may increase current year tax liabilities for taxpayers. The changes include allocation and apportionment rules for gains and losses from sales or exchanges of S corporation shares or interests from partnerships, other than investment partnerships, a requirement that combined reporting groups use the Finnigan method of apportionment for computing the sales factor numerator and applying sales throwback or throwout rules, elimination of two safe harbor exceptions to the addback modification for interest and intangible expenses paid to foreign affiliates, a 50% limit on the foreign dividends received deduction for global intangible low-taxed income (GILTI), and an interest addback adjustment for taxpayers subject to a reduced interest expense deduction under IRC Sec. 163(j).

Plante Moran note: Please see our article on the significant changes in the Illinois budget bill here.

Informational Bulletin FY 2025-29, Illinois Department of Revenue, June 2025.

Louisiana

Personal income tax: Inventory tax credit changes made

The Louisiana inventory tax credit has been repealed for taxpayers that are trusts and/or estates for ad valorem tax payments made on or after July 1, 2026. However, an additional 10-year carryforward period is allowed. In addition, for payments made by S corporations on or after July 1, 2026, the credit may only be received against income taxed at the shareholder (not entity) level.

Act 412 (S.B. 65), Laws 2025, effective as noted.

Missouri

Multiple taxes: Enacted legislation creates tax deduction for capital gains, modifies senior property tax relief credits, creates exemptions, and authorizes local taxes

Enacted Missouri legislation contains a variety of personal income, corporate income, sales and use, and property tax changes, including those detailed below.

Tax deduction for capital gains

For all tax years beginning on or after Jan. 1, 2025, an individual income tax deduction is created for 100% of all Missouri income reported as a capital gain for federal income tax purposes.

In addition, a trigger is created that would allow for a 100% deduction of all income reported as a capital gain for federal income tax purposes by entities subject to the corporate income tax. If the top rate of the state personal income tax reaches a level that’s equal to or less than 4.5%, that would trigger the corporate income tax deduction the following tax year.

Senior citizen and disabled veterans property tax credit

The legislation modifies provisions of the senior citizens property tax credit (PTC) (circuit breaker property tax credit), which applies to both people who rent as well as those who own their homes. The amount of the credit is dependent on the taxpayer’s income and property tax liability. All of the changes to the credit are effective for all calendar years beginning on or after Jan. 1, 2026, unless indicated otherwise.

Income allowance

The definition of “income” is modified to increase the amount deducted from Missouri adjusted gross income from $2,000 to $2,800, or, for claimants who owned and occupied the residence for the entire year, such amount is increased from $4,000 to $5,800 for the claimant’s spouse residing at the same address.

Maximum credit amount

The maximum credit amount allowed increases from $750 to $1,055 for renters in rent constituting property taxes actually paid, and from $1,100 to $1,550 for homeowners in actual property tax paid. Beginning Jan. 1, 2027, the credit totals will be adjusted annually for inflation based on the consumer price index.

Maximum upper income limits

The legislation increases the maximum upper limit or income allowed to qualify for the credit. However, the legislation limits the credit to those with a filing status of “single” or “married filing combined.” Therefore, those who check the “married filing separate” box and those that don’t check a box will no longer be eligible for the credit. The legislation increases the maximum upper limit or income to the following:

Beginning Jan. 1, 2027, the maximum upper limit amount will be adjusted annually for inflation based on the consumer price index.

Phase-out increments

The tax credit is calculated using a formula that takes into account that as an individual’s income rises the amount of the credit they are eligible for decreases. Currently, for every $300 increase in income, the tax credit amount given decreases $25. This legislation increases the phase-out increments used when running the calculation to determine the credit amount. Specifically, it increases the income limit from $300 to $495 and then allows it to be inflation adjusted in future fiscal years. The legislation also changes the formula to cap the tax credit reduction to 2%. Currently, the credit is reduced by 1/16 for each $300 increment for a maximum reduction of 4%. The legislation changes the $300 to $495 and changes the 4% to 2%.

Exemption for hygiene products

Beginning Aug. 28, 2025, a sales and use tax exemption is provided for all retail sales of the following items:

Exemption for certain broadband equipment

Beginning Jan. 1, 2026, all sales, purchases, or use of machinery and equipment used to provide broadband communications service by a broadband communications service provider are exempt from state and local sales and use tax. To qualify for the exemption, the broadband communications service provider must furnish to the seller a certificate in writing to the effect that an exemption is applicable to the machinery and equipment used to provide broadband communications service so purchased or used.

In addition, the Department of Revenue can permit any such broadband communications service provider to enter into a direct pay agreement with the department that allows the provider to make sales and use tax payments on the equipment directly to the department.

Law enforcement county sales taxes

Beginning Aug. 28, 2025, Ozark County may impose a sales tax that results in a combined rate of sales tax in excess of 1%, but not in excess of 1.5%, provided that any such sales tax is for the purpose of providing law enforcement services. All sales tax elections conducted during the Nov. 8, 2022, general election are deemed in compliance with this subdivision, provided that the total combined sales tax rate doesn’t exceed 1.5%.

In addition, any county, except a first-class county having a charter form of government with a population greater than 400,000, is authorized to impose a sales tax of up to 1% (previously, 0.5%) for providing law enforcement services.

Transient guest taxes

Subject to voter approval, the counties of St. Genevieve and Perry are added to the list of counties that can impose a tax on the charges for all sleeping rooms paid by the transient guests of bed-and-breakfast inns or campground cabins. This is in addition to current law that authorizes the imposition of the transient tax on hotels and motels. The maximum tax that can be imposed is 6% per occupied room or cabin per night. The legislation also adds bed-and-breakfast inns and campground cabins to the current definition of “transient guests.”

In addition, any county that imposed a tax on the charges for all sleeping rooms paid by the transient guests of hotels and motels before Aug. 28, 2025, may impose such tax upon the charges for all sleeping rooms or cabins paid by the transient guests of bed-and-breakfast inns and campgrounds without requiring a separate vote authorizing the imposition of such tax upon such charges for such bed-and-breakfast inns and campgrounds.

Sales taxes for public safety

Subject to voter approval, the following are authorized to impose a local sales tax of up to 0.5% for the purpose of improving public safety:

Sales tax for fire and ambulance districts

Subject to voter approval, any governing body of an ambulance or fire protection district is authorized to impose a sales tax in an amount of up to 1% (previously, 0.5%) on all retail sales made in such district. Also, prohibitions on certain counties imposing such tax are repealed.

Homestead property tax credit

The legislation clarifies that the taxpayer’s initial credit year for the calculation of the homestead property tax credit must not change if the taxpayer’s property tax liability is less than his/her tax liability in the initial credit year due solely to a reduction in a property tax levy made pursuant to Section 321.554.

H.B. 594, Laws 2025, effective Aug. 28, 2025, except as noted; Truly Agreed Bill Summary, Missouri House of Representatives; Fiscal Note, Committee on Legislative Research Oversight Division, Missouri House of Representatives, April 6, 2025; Press Release, Missouri Gov. Mike Kehoe, July 10, 2025.

New Hampshire

Corporate income tax, practice, and procedure: Tax amnesty, patron credit enacted

New Hampshire’s budget bill contains a tax amnesty program that begins Dec. 1, 2025, and ends Feb. 15, 2026, applicable to taxes due but unpaid on or before June 30, 2025. The amnesty applies to all penalties and interest exceeding 50% of the applicable interest.

In addition, a credit against business profits tax is established for donations made to the Granite Patron of the Arts Fund, effective July 1, 2025. The credit equals the lesser of 50% of donations made or the proportional share of the maximum aggregate credit amount allowed ($350,000 per fiscal year). The unused portion of the credit is available to apply to the business enterprise tax.

H.B. 2 H.B. 2, Laws 2025, effective as noted.

New York

Sales and use, miscellaneous taxes: Updated guidance provided on amending and filing tax returns

The New York Department of Taxation and Finance has issued a memorandum that updates guidance clarifying that amended sales and use tax returns are subject to similar limitations as other tax filings. This new memorandum supersedes TSB-M-24(2)S, (1)M, issued on Aug. 29, 2024.

Specifically, for returns filed or amended on or after Dec. 1, 2024, any person required to collect tax under Tax Law Article 28 (Sales and Compensating Use Taxes) may, in certain situations, amend a previously filed return or file an original return after a notice of determination is issued. These provisions apply to all taxes and fees administered under Tax Law Article 28, including:

Amending returns

Any person required to collect tax is allowed to amend previously filed returns if the result doesn’t reduce or eliminate a past-due tax liability related to that filing period. Past-due tax liability means any tax liability that has become fixed and final where the person required to collect tax no longer has any right to administrative or judicial review. However, if the past-due tax liability was self-reported on a return by the person required to collect tax, an amended return may be filed that reduces or eliminates such liability within 180 days of the due date of the return.

Where there is no past-due tax liability and the amended return results in an overpayment, a person required to collect tax can claim a credit or refund within three years from the date the tax was due, or two years from the date the tax was paid, whichever is later.

The department may assess tax, penalty, and interest, including the recovery of a previously paid refund, attributable to a change or correction on a return, within three years after the amended return was filed.

Filing A return after notice of determination of tax due

If the department issues a notice of determination of tax due because a return was not filed, an original return may be filed within 180 days from the mail date of the notice of determination. Filing a missing return will not affect any penalty or interest that has accrued due to failure to timely file the original return.

Penalties

Effective April 20, 2024, for sales and use tax and wireless communications surcharge returns, and Dec. 1, 2024, for adult-use cannabis products tax returns, any person who willfully files a return that contains false information to reduce or eliminate a liability will be subject to a penalty up to $1,000 per return in addition to any other penalty provided by law.

TSB-M-25(1)S, TSB-M-25(1)M, New York Department of Taxation and Finance, Jun. 24, 2025.

New York City

Corporate income tax: REAP credits extended, new per-employee relocation credit enacted

The existing New York City relocation and employment assistance program (REAP) credits have been extended for three years until July 1, 2028.

RACE program

In addition, the law creates a new relocation assistance credit per employee (RACE) program, which provides for a $5,000 credit per employee for businesses relocating to eligible premises in New York City of at least 10,000 square feet. If the building is located in Manhattan, it must have been constructed before 2000. The business must have been conducting substantial business operations outside the New York state for at least 24 months before relocating.

The credit is allowed for the taxable year of the relocation and for any of the 10 succeeding taxable years during which eligible aggregate employment shares are maintained with respect to eligible premises. It’s refundable for the year of relocation and the next four years; for subsequent years, unused credits can be carried forward for five years. The credit is capped as 500 employees per business and 3,000 employees for the program in total.

Ch. 171 (A.B. 8676), Laws 2025, effective July 1, 2025.

Ohio

Multiple taxes: Budget signed, personal income rate reduction, other changes included

The Ohio governor has signed the budget into law, while vetoing some provisions. The law makes changes to the income tax, commercial activity tax (CAT), sales and use tax, property tax, and severance tax.

Income and CAT changes

The law makes changes to the CAT and income taxes, including:

Sales and use tax changes

The changes to sales and use tax include:

Property and severance tax changes

Finally, the law makes property tax and coal severance tax amendments, including:

Vetoed provisions

Among the items vetoed by the governor are:

Plante Moran note: Please see our article on the Ohio budget here.

H.B. 96, Laws 2025, effective 91 days after filing with the Secretary of State and as noted; Veto Messages, Office of the Governor, June 30, 2025; Disapproved Language, Office of the Governor, June 30, 2025.

Oregon

Corporate, personal income taxes: Refund request deadlines amended

Oregon has established uniform statute of limitations for taxpayers to request a refund under the corporate (excise), personal, and corporate activity taxes. Specifically, a tax return filed before the due date is considered filed on the last day prescribed by law for that payment of tax.

The change applies:

Previously, the deadline for filing a request for refund started from the later of the due date or the actual date of receipt.

Ch.371 (S.B. 799), Laws 2025, effective 91 days after adjournment.

Texas

Corporate income, sales and use taxes: Research and development tax credit revised

Texas has repealed its prior research and development tax credit and its associated tax credit and replaced them with a revised research and development tax credit. The credit varies based on prior expenses and collaborations, ranging from 4.361 to 10.903%, and provides a refundable option for entities owing no tax.

(S.B. 2206), Laws 2025, effective Jan. 1, 2026.

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