07 July 2026 State and Local Tax Weekly for June 5 and June 13 Ernst & Young's State and Local Tax Weekly newsletter for June 5 and June 13 is now available. Prepared by Ernst & Young's State and Local Taxation group, this weekly update summarizes important news, cases, and other developments in U.S. state and local taxation. Massachusetts delays conformity to certain federal tax changes made by the OBBBA, creates an elective PTET for surtax on high-income earners On June 12, 2026, Massachusetts Governor Maura Healey signed into law a supplemental budget bill, HB 5470, which phases-in conformity to certain "One Big Beautiful Bill Act" (OBBBA) provisions, while tying future decoupling from certain OBBBA provisions to the outcome of a proposed ballot measure that would lower the state's personal income tax. On June 18, 2026, however, the Massachusetts Supreme Judicial Court (Court) rejected the 2026 ballot initiative, "25-18 Initiative Petition for a Law Relative to Reducing the State Personal Income Tax Rate from 5% to 4%," and enjoined the Secretary of State from placing the measure on the ballot for the November statewide election. In addition, the budget bill automatically decouples from federal tax changes under certain conditions and creates an elective pass-through entity tax (PTET) that applies to the surtax on high-income earners. OBBBA conformity: The law disallows the deductions for domestic research and experimentation (R&E) expenditures created by OBBBA Section 70302(f), applicable to tax years beginning on or after January 1, 2022. The law also disallows the deductions allowed by IRC Section 174A. Instead, taxpayers may deduct any R&E expenditures paid or incurred as allowed under IRC Section 174 as in effect on July 3, 2025. Consequently, for the 2025 tax year Massachusetts effectively adopts the federal rules related to the deduction and capitalization of R&E expenditures under the Tax Cuts and Jobs Act (TCJA). The decoupling provision applies to tax years beginning on or after January 1, 2022. The disallowance provision is repealed for tax years beginning on or after January 1, 2026. Massachusetts decouples from the OBBBA changes to the following IRC sections for tax years beginning in 2025 and 2026:
For tax years beginning in 2025 or 2026, taxpayers may apply IRC Section 1400Z-2 as in effect for tax years beginning before January 1, 2026. The new law also defines a "qualified opportunity zone" as "an area located entirely within the commonwealth that is designated as a qualified opportunity zone under [IRC Section 1400Z-2]." This change applies to tax years beginning on or after January 1, 2026. The law includes penalty and interest relief for underpayments or late payments of tax for tax years beginning in 2025, where the taxpayer filed their return before these changes were enacted, provided that the taxpayer files an amended return that takes these changes into consideration. IRC conformity: HB 5470 also revises IRC conformity provisions to automatically decouple from certain amendments to the IRC that otherwise would apply under chapter 62 (income tax) or chapter 63 (corporate excise tax) if such amendments affect the determination of Massachusetts gross income or deductions under chapter 62 or gross income or net income under chapter 63. This change applies to tax years beginning on or after January 1, 2026. Specifically, Massachusetts will not automatically conform to future amendments that apply to (1) any tax year that begins in the calendar year in which the amendment is enacted, or (2) any tax year that precedes the calendar year in which the amendment is enacted. This decoupling does not apply to any IRC amendments that the Commissioner of the Massachusetts Department of Revenue timely determines will have an estimated income and corporate excise tax revenue impact of less than $20 million in lost or gained revenue based on a rolling three-year average for the fiscal year that begins during the calendar year in which the amendment is enacted or any fiscal year that precedes the calendar year in which the amendment is enacted. PTET: Under the existing PTET program, eligible pass-through entities (PTEs) (i.e., S corporations, partnerships, or limited liability companies treated as either) may annually elect to pay a 5% excise tax on their "qualified income taxable in Massachusetts" (which is the same as the regular commonwealth personal income tax rate). The new law creates a state elective PTET for the 4% surtax on high-income earners. The PTET is intended to enable Massachusetts taxpayers who are PTE owners to deduct, for federal income tax purposes, state and local taxes (SALT) that exceed the annual federal SALT deduction limitation. Applicable to tax years beginning on or after January 1, 2026, new chapter 63E allows eligible PTEs to make an annual election to pay an excise tax on its qualified taxable income at a 4% rate. Qualified members of a PTE making this election are allowed a refundable credit against the PTET; the credit is limited to 90% of the PTET. All members of the electing PTE are bound by the election, which is irrevocable for the year made. The PTET election does not apply to any tax year for which the federal limitation on the SALT deduction has expired or otherwise is not in effect. For additional information on this development, see Tax Alert 2026-1331. See also, Department of Revenue recently issued guidance: "Working Draft TIR: Tax Provisions in the Fiscal Year 2026 Final Mid-Year Supplemental Appropriation Bill" (June 23, 2026) and "TIR 26-4: Massachusetts Conformity to Certain Provisions in Public Law No. 119-21" (June 23, 2026). Rhode Island budget address certain OBBBA provisions, imposes a high-income surtax on individuals, creates a tax amnesty program On June 12, 2026, Rhode Island Governor Dan Mckee signed into law the state's budget bill (HB 7127) supporting fiscal year 2027. The bill includes several tax related changes impacting businesses and individuals. These changes address certain provisions of the One Big Beautiful Bill Act (OBBBA), impose a new high-income surtax on individuals with income over $1 million, and establish a tax amnesty program. HB 7127 modifies the definition of "net income" for purposes of the Business Corporation Tax. For tax years beginning on or before January 1, 2026, a corporate taxpayer is required to add to its taxable income the amount of the deduction taken for domestic research and experimental (R&E) expenditures under IRC Section 174A less the amount of the deduction that would have been allowed as a domestic R&E expenditure under IRC Section 174 before enactment of the OBBBA. For tax years beginning on or after January 1, 2026, a deduction is allowed in the amount that would have been allowed under IRC Section 174A on July 4, 2025, but would not have been allowed as a deduction under IRC Section 174 immediately before the enactment of the OBBBA. The cumulative modification amount for each amortized expenditure cannot exceed 100% of said expenditure's expense amount. For tax years beginning on or before January 1, 2027, a corporate taxpayer is required to add to its taxable income the amount of any deduction allowable for depreciation, amortization or depletion under IRC Section 163(j)(8)(A)(V). For tax years beginning on or after January 1, 2027, a taxpayer must add back the amount of income or gain from the sale or exchange of qualified small business stock excluded from federal gross income under IRC Section 1202. HB 7127 imposes a new 1% high-income surtax on an individual's taxable income over $1 million. The 1% tax rate applies to 2027, with the tax rate increasing to 2% in 2028 and to 3% in 2029; in 2028 and 2029 the $1 million threshold will be adjusted for inflation. For tax years beginning on or after January 1, 2027, any references to the highest marginal rate is the sum of the highest marginal rate imposed on individuals under R.I. Code Section 44-30-2.6(c)(3)(A)(I)(1) and the high-income surtax under R.I. Code Section 44-30-2.6(c)(3)(A)(I)(2). Starting in 2027, a PTE electing to pay the PTET also may elect to pay the state tax at the entity level on income equal to or exceeding the amount subject to the high-income surtax at the high-income surtax rate. HB 7127 extends the sunset date of the following credits through December 31, 2027 (from December 31, 2026): (1) the Rebuild Rhode Island Tax Credit; (2) the Rhode Island Tax Increment Financing; (3) the Tax Stabilization Incentive; (4) the First Wave Closing Fund; (5) the Stay Invested in RI Wavemaker Fellowships; (6) the Main Street Rhode Island Streetscape Improvement Fund; (7) the innovation initiative; and (8) the Rhode Island New Qualified Jobs Incentives Act 2015. Lastly, the law creates a tax amnesty program that will run for a 75-day period ending on February 15, 2027. Amnesty applies to taxes and interest due for any tax period ending on or before December 31, 2025. For those participating in, and complying with the terms of, the amnesty program, the tax administrator will waive otherwise applicable penalties and reduce interest by 25%. Amnesty will not be granted to taxpayers who are under criminal investigation or who are party to any civil or criminal proceedings for fraud in relation to any Rhode Island tax that is collected by the tax administrator. R.I. Laws 2026, ch. 84 (HB 7127), signed by the governor on June 12, 2026. Federal: Proposed bill (HR 9244, the "Business Activity Tax Simplification Act of 2025") would expand the scope of PL 86-272 to include transactions of other than tangible personal property (e.g., all other forms property and services) that are fulfilled or distributed from a point outside the state. In addition to current prohibitions, a state would not be able to impose a net income tax on income derived within the state by any person from interstate commerce if the only business activity in the state is: (1) the furnishing of information to customers or affiliates in such state, or the coverage of events or other gatherings of information in the state by which the information is used or disseminated from a point outside the state; (2) the business activities directly related to such person's potential or actual purchase of goods or services within the state if the final determination to purchase is made outside the state; or (3) by reason of sales or transaction of a digital good or digital service. HR 9244 was introduced on June 10, 2026 and referred to the House Committee on the Judiciary. Arizona: New law (HB 4168) updates the state's date of conformity to the IRC to January 1, 2026 (from January 1, 2025), including provisions that became effective during 2025 with specific adoption of retroactive effective dates, but excluding changes to the IRC enacted after January 1, 2026. For purposes of computing income tax for tax years beginning from and after December 31, 2024, through December 31, 2025, the IRC means the IRC in effect on January 1, 2025, including provisions of the OBBBA that are retroactively effective during tax years beginning from and after December 31, 2024, through December 31, 2025. Effective for tax years beginning from and after December 31, 2025, corporate and individual taxpayers are required to addback to Arizona gross income the amount of the special depreciation allowance for qualified production property under IRC Section 168(n), to the extent not previously added. The law also clarifies that the subtraction from Arizona gross income for corporate income taxpayers for the amount of dividend income received from foreign corporations applies to income described in IRC Section 951A (i.e., net controlled foreign corporation tested income (NCTI)), deleting the reference to global intangible low-taxed income (GILTI) — the term used prior to changes made by the OBBBA. This change applies retroactively to tax years beginning from and after December 31, 2024. For individual income tax purposes, the law allows a subtraction for qualified tips received during the tax year that are deductible for federal tax purposes under IRC Section 224, qualified overtime that is deductible under IRC Section 225, and the amount deduction for qualified passenger vehicle loan interest under IRC Section 163(h)(4). The law also increases the amount of the optional standard deduction. For tax years beginning from and after December 31, 2025, the law limits to $10,000 the amount of the deduction for state and local taxes. Ariz. Laws 2026, ch. 140 (HB 4168), signed by the governor on June 13, 2026. Florida: The U.S. Supreme Court denied Florida's motion for leave to file a bill of compliant in a case brought by the Florida Attorney General, seeking to challenge the constitutionality of California's single-sales factor apportionment provisions when combined with a special rule that excludes from the sales factor "substantial amounts of gross receipts [that] arise from an occasional sale of a fixed asset or other property held or used in the regular course of the taxpayer's trade or business … " Florida v. California and Franchise Tax Bd., Dkt. No. 220163 (U.S. S. Ct., reviewed denied, June 1, 2026). Florida: New law (HB 7031) updates Florida's date of conformity to the IRC to January 1, 2026 (from January 1, 2025), while decoupling from select provisions of the One Big Beautiful Bill Act (OBBBA). The new law decouples from IRC Sections 168(n) and 174A by providing that these provisions are not included. Florida also decouples from OBBBA changes to IRC Sections 163(j), 168(k), 174(a), 179 and 274 by adopting these provisions as they were amended and in effect on January 1, 2025. These changes are retroactively effective to January 1, 2026. HB 7031 authorizes the Florida Department of Revenue to adopt emergency rules implementing these changes. Fla. Laws 2026, ch. 137 (HB 7031), signed by the governor on June 11, 2026. New Jersey: The New Jersey Division of Taxation revised its technical bulletin on nexus for corporation business tax purposes to clarify when the transfer of nonfungible tokens (NFTs) does not exceed the protections of PL 86-272. In the technical bulletin published in 2023, the NJ DOT said that the offering, soliciting, selling, accepting or buying of digital assets such as virtual currency or NFTs and/or offering services related to such digital assets is the offering and selling of financial products, financial instruments and financial services or other intangibles and is not protected by PL 86-272. The revised technical bulletin, clarifies that the use of NFTs for a transaction when the sole use and purpose is to transfer the ownership of an item of tangible personal property, and not for any other purpose, is an in-state activity that does not exceed the protections of PL 86-272. The NJ DOT noted that this protection only applies when the NFT transferred is solely for a transfer of the legal ownership rights in the underlying tangible personal property, and not to transfers of intangible property, intellectual property, real estate or the purchase of a service. N.J. Div. of Taxn., TB-108(R) "Nexus for Corporation Business Tax for Privilege Periods Ending on and after July 31, 2023" (revised June 5, 2026). Texas: The Texas Comptroller of Public Accounts adopted amendments to 34 Tex. Admin. Code Section 3.558 "Margin: Cost of Goods Sold" (final rule) to incorporate a recent policy that conforms the franchise tax to the current year federal income tax provisions, except where a statute or rule references the IRC, in which case the taxable entity must compute such amounts using the 2007 IRC. As an example of how this rule applies, the cost of goods sold (COGS) deduction depreciation rules, which do not expressly reference the IRC, align with the bonus depreciation provisions of the One Big Beautiful Bill Act (i.e., the current year IRC). Recovery claimed under IRC Section 197, however, is determined under the 2007 IRC, as the IRC is specifically referenced by statute. On the 2026 franchise tax report, a taxpayer also may include in its COGS deduction a one-time net deprecation adjustment for qualifying assets. The final rule specifies the proper order of applying the one-time net depreciation adjustment with other allowable costs and procedures for when the adjustment results in the entity's margin being reduced below zero. The term "qualifying assets" is defined as "those placed in service prior to the accounting year begin date on the 2026 report, if the assets have not been disposed of prior to this date and are associated with and necessary for the production of the goods." The final rule allows any unused net depreciation adjustment to be carried forward to consecutive reports until exhausted. For franchise tax reports prior to the 2026 report, an entity will use the 2007 IRC to determine the allowable depreciation, including amounts for which the entity elected to expense certain depreciable business assets under IRC Section 179. The final rule also implements recent statutory changes concerning expenses paid with qualifying grant proceeds received for broadband deployment in Texas and expenses paid with qualifying loan or grant proceeds received for COVID-19 relief, among other changes related to film and broadcasting and movie theaters. The final rule takes effect on June 21, 2026. Tex. Register, Vol. 51 No. 24, June 12, 2026. Florida: New law (SB 1074), in response to the end of the production of the penny, gives dealers the authority to round to the nearest nickel for in-person cash transactions as follows: if the final digit of a cash transaction ends in (1) one or two cents, the transaction is rounded down to zero, (2) three or four cents, the transaction is round up to five cents, (3) six or seven cents, the transaction is round down to five cents, and (4) eight or nine cents, the transaction is round up to 10 cents. Rounding is not allowed if the final digit of the cash transaction is zero or five cents. Rounding does not apply to non-cash transactions such as transactions for which payment is made by electronic funds transfer, check, gift or credit card, money order or mixed tender. The law also states that rounding to the nearest nickel does not alter the sales price, the amount of tax collected, or any surcharges, assessments or fees imposed on the sale. Rounding to the nearest nickel may apply to the amount of the transaction or the amount of change tendered to the purchaser. SB 1074 took effect upon becoming law. Fla. Laws 2026, ch. 68 (SB 1074), signed by the governor on May 11, 2026. See also, Fla. Dept. of Rev., TIP 26A01-03 (June 10, 2026) (replaces TIP #25A01-18, December 19, 2025). Illinois: The Illinois Department of Revenue (Department) issued guidance on the remote retailer1 tax amnesty program that will run August 1, 2026 through October 31, 2026. During the amnesty program, the Department will accept returns and payment of State and local retailers' occupation taxes (ROTs) at the simplified ROT rate for eligible transactions occurring during the eligibility period — i.e., the period from January 1, 2021 through June 30, 2026. For remote retailers that satisfy their state and local ROT during the amnesty program, the Department will abate and not seek to collect interest or penalties on eligible transactions, and it will not seek civil or criminal prosecution of the remote retailer for the period for which amnesty has been granted. For amnesty to be granted, the remote retailer must be registered with the Department, have an active MyTax Illinois logon, and file amnesty-related returns and make full payment of all state and local ROT for its eligible transactions during the amnesty period, unless the retailer enters into an approved repayment plan. A remote retailer also may produce a valid exemption certificate, resale certificate or direct pay permit issued by the Department. Failure to pay all tax due using the simplified ROT rate, unless previously remitted using the applicable state and local ROT rate, will invalidate any amnesty granted. Amnesty will not be granted for/to: (1) any ROT remitted to the Department before the start of the program; (2) taxpayers who are a party to any criminal investigation or to any civil or criminal litigation that is pending in any circuit court, appellate court or State Supreme Court for nonpayment, delinquency or fraud in relation to any Illinois tax; (3) taxpayers who commit fraud or intentional misrepresentation of a material fact in any document filed under the remote retailer amnesty program. Amnesty is only available for ROT due from a remote retailer in its capacity as a remote retailer and not any other taxes owed by the remote retailer. Ill. Dept. of Rev., Informational Bulletin FY 2026-28 (June 2026); "2026 Illinois Remote Retailer Tax Amnesty"(June 2026); see also Tax Alert 2025-1373. Iowa: New law (HF 2757) creates a sales and use tax exemption for sales of tangible personal property (TPP) or specified digital products sold to or of services furnished to a nuclear electric generation facility directly and primarily used in specified activities. Such activities include site preparation, construction, reconstruction, expansion, replacement, alteration, repair, safe storage, and restarting after a period of decommissioning of nuclear electric generation facility. The exemption for sales of TPP and specified digital goods for restarting a nuclear electric generation facility, applies to such TPP and goods sold to the facility occurring on or after January 1, 2026 and ends when the facility begins or restarts commercial operation. For all the other activities, the exemption applies to TPP and specified digital goods sold or services furnished to a nuclear electric generation facility when such exemption is permitted via an agreement the facility enters into with the economic development authority and ends when the facility begins or restarts commercial operations. The law provides that this exemption applies to the sales price of TPP and specified digital products sold to or services furnished to a nuclear electric generation facility that are directly and primarily used in the activities described above such that these activities result in a new nuclear electric generation facility, an increased nameplate capacity for an existing nuclear electric generation facility, or the restart of a decommissioned nuclear electric generation facility. Facilities receiving the exemption must make an annual contribution to the nuclear energy workforce fund. Exemptions will have to be repaid if certain conditions are not met such as when the facility does not make the required contributions to the fund or it fails to timely commence or restart commercial operation. Iowa Laws 2026, HF 2757, signed by the governor on June 1, 2026. Iowa: New law (HF 960) modifies the sales tax exemption for purchases of central office equipment or transmission equipment used by certain entities providing commercial telecommunication services. As revised the exemption applies to the sale of central office equipment or transmission equipment "used" (changed from "primarily used") in the furnishing of telecommunications services, internet access services, or a combination of both, on a commercial basis by: (1) local exchange carriers and competitive local exchange service providers, (2) franchised cable television operators, mutual companies, municipal utilities, cooperatives and companies furnishing communications services that are not subject to rate regulation, (3) providers of commercial mobile radio services, and (4) long distance companies. HF 960 takes effect on July 1, 2026. Iowa Laws 2026, HF 960, signed by the governor on May 19, 2026. Federal: The IRS has released the 2026 inflation adjustment factor and reference prices for calculating the IRC Section 45 production tax credit (PTC) for qualified energy resources. Taxpayers originally could claim a PTC equal to 1.5 cents (adjusted annually for inflation) per kilowatt hour of renewable electricity produced at a qualified facility. The inflation adjustment factor for calendar-year 2026 is 2.0570. The 2026 reference price for facilities producing electricity from wind is 3.17 cents per kilowatt hour; because this price does not exceed the 8 cents multiplied by the inflation adjustment factor in IRC Section 45(b)(1), the phaseout of the credit under IRC Section 45(b)(1) does not apply for calendar 2025. Reference prices for facilities producing electricity from closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy have not been determined for 2026. For additional information on this development, see Tax Alert 2026-1186. Arizona: New law (HB 4168), effective for tax years beginning from and after December 31, 2025, repeals:
Beginning July 1, 2026 through June 30 2029, the law prohibits the Arizona Commerce Authority from accepting applications for any new computer data centers and provides that no new computer data centers qualify for tax relief under Ariz. Rev. Stat. Section 41-1519. Ariz. Laws 2026, ch. 140 (HB 4168), signed by the governor on June 13, 2026. Colorado: New law (HB26-1014) extends Colorado's annual job growth incentive income tax credit through tax years beginning before January 1, 2035 (from before January 1, 2027). Colo. Laws 2026, ch. 206 (HB26-1014), signed by the governor on May 29, 2026. Georgia: New law (HB 1129) modifies enterprise zone provisions by providing that any redevelopment project used to qualify an area for designation as an enterprise zone will not, upon approval of such designation, qualify for the state's sales and use tax exemption within the boundaries of such project, unless such exemption is approved by the governor or his designee. Such projects may qualify for an exemption from local sales and use taxes levied within the project's boundaries. An enterprise zone may not be designated under this provision in a county in which four enterprise zones are wholly or partially located. HB 1129 takes effect on July 1, 2026 and applies to enterprise zones designated on or after that date. Ga. Laws 2026, Act 459 (HB 1129), signed by the governor on May 11, 2026. Virginia: New law (SB 181) allows a governing body of any county, city or town, by ordinance, to provide a partial exemption from taxation of real estate for buildings that have undergone a qualifying residential conversion. The law defines "qualifying residential conversion" as "the conversion of a building and its structural components from retail, commercial, or religious use to residential use … " The building must have been first placed into service at least 15 years before the start of such conversion and depreciation must be allowed for such building. After conversion, at least 30% of the residential units in the building must be reserved for or offered to households with per capita income at or below 80% of the median per capita income for the locality in which the building is located or the building owner is subject to a binding, written agreement with Virginia or the locality regarding the provision of affordable housing, among other requirements. The adjusted basis of the building shall be determined as of the first day of the tax year in which a credit under this section is claimed. The amount of the partial exemption may be an amount equal to the increase in assessed value or a percentage of such increase resulting from the repurposing of the structure not to exceed the amount of expenses incurred in connection with converting the building into residential. A locality may recapture all or a portion of the tax exemption if the building no longer meets the exemption's requirements. SB 181 takes effect on July 1, 2026. Va. Laws 2026, ch. 994 (SB 181), signed by the governor on April 22, 2026. Arkansas: Governor Sarah Huckabee Sanders signed into law HB 1001, which retroactive to January 1, 2026, lowers the top individual tax rate from 3.9% to 3.7%. This action reflects the state's policy direction since 2015 to lower income tax rates and is the fifth time since 2023 that the top personal income tax has been lowered. The Arkansas Department of Finance and Administration has released an updated income tax withholding formula reflecting the revised tax rates and tax brackets. If bonuses, commissions, or overtime wages are paid at the same time as regular wages, the income tax withheld is determined by deducting 3.7% (previously, 3.9%) of the bonus or commission for state income tax. For more on this development, see Tax Alert 2026-1239. Georgia: Under HB 463, and effective retroactive to January 1, 2026, Georgia's personal income tax rate is reduced from 5.19% to 4.99%, with additional annual decreases of 0.125% until the rate reaches 3.99%. This is the third rate cut since a 2022 law created a flat rate of 5.49% beginning in 2024, with future reductions. The Georgia Department of Revenue has issued an updated Employer's Withholding Guide (Rev. June 2026), which contains the revised withholding formula and tables resulting from the decrease in the personal income tax rate effective retroactive to January 1, 2026. The updated withholding formula/tables apply immediately. In addition, HB 463 increases the annual retirement income tax exclusion from a maximum of $65,000 to $70,000 effective January 1, 2027. It also adopts the qualified overtime and tip exemption under the One Big Beautiful Bill Act effective January 1, 2026. For additional information on this development, see Tax Alert 2026-1249 and Tax Alert 2026-1294. Federal: On June 2, 2026, the United States Trade Representative (USTR) announced determinations in 60 Section 301 investigations (initiated on March 12, 2026) concerning the failure of various economies to impose and effectively enforce prohibitions on the importation of goods produced wholly or in part with forced labor. The USTR determined that all 60 investigated economies failed either to impose or to effectively enforce such prohibitions, and that these acts, policies and practices are unreasonable and burden or restrict US commerce. As a result, the USTR has proposed imposing additional duties on imports from these economies, with differentiated tariff rates based on the extent of each economy's forced-labor import prohibition framework and related commitments. The USTR concluded that failures to impose and effectively enforce forced-labor import prohibitions distort global competition by allowing goods produced with forced-labor inputs to benefit from lower costs, thereby disadvantaging US producers and other market participants that comply with labor standards. For additional information on this development, see Tax Alert 2026-1183. Federal: On June 1, 2026, the United States (US) President issued a proclamation titled "Further Adjusting the Tariff Regimes for Imports of Aluminum, Steel, And Copper into the United States," amending the tariff regimes imposed under Section 232 of the Trade Expansion Act of 1962 on imports of aluminum, steel and copper and their derivative products. The action modifies tariff rates and product coverage established under prior proclamations, including the most recent framework introduced under Proclamation 11021, which imposed a tiered duty structure of 50%, 25% and 15% depending on product characteristics. Key changes include expanding the scope of products eligible for the reduced 15% duty rate, revising tariff treatment for certain imported products, adding new derivative products to coverage and lowering the US-origin content threshold required for preferential treatment. These changes are intended to balance national security objectives with economic considerations affecting downstream industries and supply chains. For additional information on this development, see Tax Alert 2026-1175. Federal: The United States Trade Representative (USTR) has taken significant action under Section 301 of the Trade Act of 1974 involving Brazil and Vietnam, reflecting increased scrutiny of both tariff and non-tariff trade barriers in the two countries. For Brazil, the USTR issued a determination at the conclusion of its investigation initiated on July 15, 2025, stating that a wide range of acts, policies and practices are actionable under Section 301. The issues addressed include digital trade, preferential tariffs, anti-corruption enforcement, intellectual property (IP) protection, ethanol market access and illegal deforestation. The USTR has proposed imposing 25% tariffs on all goods from Brazil, subject to certain exemptions. For Vietnam, the USTR initiated a Section 301 investigation into IP protection and enforcement following its identification as a priority foreign country. The investigation will evaluate whether Vietnam's practices are unreasonable or discriminatory and burden or restrict US commerce, with potential for future trade actions. For additional information on this development, see Tax Alert 2026-1174. Federal: On June 3, 2026, United States (US) President Trump issued an Executive Order titled "Strengthening Customs Enforcement." The order builds upon the administration's policy concerns regarding customs enforcement, particularly in areas related to customs valuation, misclassification and duty evasion. It directs the Department of Homeland Security and US Customs and Border Protection to implement reforms that improve transparency, enhance compliance and ensure full collection of duties. For additional information on this development, see Tax Alert 2026-1196. Tuesday, July 14, 2026. Navigating state tax implications for REITs: A journey from basics to advanced concepts (1:00-2:00 pm ET / 10:00-11:00 am PT). This webcast will examine the state and local tax treatment of real estate investment trusts (REITs), addressing the technical complexities with practical approaches. We will go through common pitfalls with REIT state income tax reporting: dividends-paid-deduction mechanics, net operating loss (NOL) utilization and combined reporting regimes. As we delve into more advanced considerations, we will discuss transaction and transfer-tax obligations, emerging legislative developments, and critical 2025 filing season considerations. The following topics will be discussed: (1) REIT basic concepts for state and local taxation; (2) dividends-paid-deduction complexities; (3) NOL utilization considerations; (4) combined reporting requirements; (5) transaction and transfer-tax considerations; (6) state legislative updates impacting REITs; and (7) filing season reminders for tax year 2025. Register here. Wednesday, August 5, 2026. FSO SALT transactions quarterly webcast: Navigating emerging state tax developments and transaction trends (1:00-2:00 p.m. ET; 10:00-11:00 a.m. PT). Join us for the inaugural episode of our new quarterly Financial Services (FSO) state and local tax (SALT) transactions webcast series, where we will provide timely insights into emerging SALT developments impacting financial services, real estate, and asset management transactions. Topics to be discussed include: (1) recent state and local legislative developments impacting income and transfer taxes; (2) emerging state and local trends and developments for transactions; (3) state and local considerations for data center investments, including: sales and use taxes, real estate transfer tax and property tax considerations, and credits and incentives opportunities. Register here. Because the matters covered herein are complicated, State and Local Tax Weekly should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.
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