KBF State Income Tax Newsletter – 4th 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 updated its alignment with federal tax law by ten years, now matching the federal code as of January 1, 2025. However, the state continues to decouple from several key provisions, meaning businesses may continue to see differences between their federal and California tax calculations.
OBBBA conformity was addressed by a number of states, including varied approaches to conformity/decoupling by Delaware, Illinois, Maine, Michigan, Pennsylvania, and Washington, D.C.
Massachusetts added to its corporate nexus rules, including specifying that certain activities are sufficient to establish nexus.
Texas announced updated franchise tax rates and thresholds for 2026-2027 and issued guidance on the state’s selectively updated IRC conformity and the impact this has on depreciation.
Read more about these updates by downloading the newsletter here. For more information or specific tax guidance, please contact Nick McMahon at nmcmahon@kbfadvisory.com or George Rendziperis at grendziperis@kbfadvisory.com. You can also connect with a KBF professional here.