Deloitte State Tax Matters April 2026: Key Multi-State Tax Updates %sep% %sitename%

If you operate a business across multiple states, keeping pace with rapidly changing state tax laws is one of the most complex compliance challenges you face. The April 2026 edition of Deloitte State Tax Matters (Issue 2026-14, released April 10, 2026) brings a dense set of developments that touch corporate income tax, digital services taxes, sales and use tax, and property tax exemptions. At SW Accounting & Consulting Corp, we monitor these multi-state developments closely because a single overlooked state change can mean thousands — or even millions — in unexpected tax liability for our business clients.

What Is Utah’s New Targeted Advertising Tax — and Who Does It Affect? 📣

Utah has enacted a Targeted Advertising Tax that imposes a 2.5% tax on revenues derived from serving targeted advertisements to Utah residents, applicable to companies with over $100 million in global gross revenues.

Utah’s Targeted Advertising Tax (SB 240, signed into law in March 2026) is modeled after Maryland’s Digital Advertising Gross Revenues Tax but with important structural differences. Key features of the Utah tax include:

• Rate: 2.5% on gross revenues from targeted advertising services delivered to Utah users
• Applicability threshold: Companies with at least $100 million in global gross revenues from all sources
• Effective date: January 1, 2027 (for revenues earned in 2027 forward)
• Nexus standard: Economic nexus — physical presence in Utah is not required
• Apportionment: Based on percentage of targeted ad impressions delivered to Utah users relative to all U.S. impressions

The tax specifically targets large digital platforms — search engines, social media companies, and ad networks — that use personal data to serve customized advertisements. E-commerce retailers whose primary business is selling goods (not advertising) are generally not subject to the tax unless they separately monetize advertising inventory. Legal challenges are anticipated, citing Commerce Clause and First Amendment concerns similar to those raised against Maryland’s digital advertising tax.

How Are States Responding to Federal Sec. 174 R&D Capitalization and OBBBA Changes? 🔬

Multiple states are decoupling from the federal OBBBA changes, including Maryland’s decision to disallow the restored 100% bonus depreciation under IRC §168(k) — creating significant book-tax differences for multi-state filers.

The One Big Beautiful Budget Act (OBBBA), enacted in early 2026, prospectively restored the immediate expensing of domestic R&D expenditures under IRC §174 for tax years beginning after 2025, and also restored 100% bonus depreciation under §168(k). However, state conformity to these changes has been inconsistent:

• Conforming states: States that roll their IRC conformity dates forward automatically will conform to the OBBBA’s changes
• Decoupling states: States with fixed conformity dates or specific decoupling legislation may deny the additional deduction, requiring addback on state returns
• Maryland specifically: Enacted legislation denying the additional bonus depreciation under the OBBBA’s §168(k) modification for Maryland purposes

The Deloitte report highlights that Maryland’s decoupling from OBBBA §168(k) means Maryland taxpayers who take enhanced bonus depreciation federally must add back that additional amount on their Maryland corporate income tax return. As of April 2026, at least 12 states have announced they will not conform to the OBBBA’s §168(k) changes.

What Are the Key State Tax Amnesty and Administrative Developments? 🏛

Indiana launched a 60-day tax amnesty program for unfiled or underreported state taxes through May 31, 2026, waiving all penalties and interest for qualifying taxpayers who come forward voluntarily.

Indiana’s 2026 Tax Amnesty Program covers most state taxes administered by the Indiana Department of Revenue (IDOR), including:

• Adjusted gross income tax (corporate and individual)
• Sales and use tax
• Withholding tax
• Financial institutions tax

To qualify, taxpayers must have a tax liability for tax periods ending before January 1, 2026, must not currently be under audit, and must file all delinquent returns and pay the full tax due (principal only) by May 31, 2026. The program is especially valuable for out-of-state businesses that recently discovered Indiana nexus through economic nexus studies — they can come into compliance at zero penalty cost.

What Are Notable Sales and Use Tax Developments in April 2026? 🛒

States continue to expand sales tax to digital products, SaaS, and marketplace facilitators — with new administrative rulings clarifying taxability of bundled transactions and software subscriptions.

The sales and use tax landscape continues to evolve rapidly. Issue 2026-14 highlights several notable developments:

• Marketplace facilitator liability: New guidance clarifying that platforms facilitating third-party sales must collect sales tax even when the seller is below the state’s economic nexus threshold
• SaaS taxability rulings: Multiple states issued letter rulings in Q1 2026 on whether AI-powered software subscriptions constitute taxable “specified digital products” or exempt “professional services” — outcomes varied dramatically by state
• Virginia construction sourcing: A TAA ruling clarified that intercompany construction management fees must be sourced to where the project is located, not where the management entity is domiciled
• California drop shipment guidance: Updated guidance on drop shipments involving non-California intermediaries, potentially affecting California nexus determinations for out-of-state distributors

For up-to-date information on state sales tax economic nexus thresholds, the Streamlined Sales Tax Governing Board maintains a comprehensive resource on participating states’ rules.

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