KBF State Income Tax Newsletter – 3rd Quarter 2025
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KBF’s quarterly newsletter updates clients on state and local income/franchise tax news, developments, and trends. Please note that this information is for discussion purposes only and does not constitute specific tax advice.
California finalized amendments to its service sourcing regulations with a change to its cascading rules. Minnesota’s Supreme Court validated “look-through” sourcing, requiring a company to source based on end-user locations rather than direct customer locations.
Colorado will now require the inclusion of FDDEI. It also expanded the IRC § 78 dividend exclusion, added five tax haven jurisdictions, and authorized $125 million in tax credit sales. New Jersey launched a manufacturing incentive program offering up to $150 million in credits.
Maryland temporarily decoupled from key OBBBA provisions for 2025, Maine updated IRC conformity to December 31, 2024, Rhode Island requires additions for OBBBA-related amounts, and the District of Columbia further delayed its combined reporting deduction to 2030.
Read more about these updates by downloading the newsletter below. For more information or specific tax guidance, please contact Nick McMahon at nmcmahon@kbfadvisory.com or connect with a KBF professional here.