State Tax Updates April 2026: OBBBA Conformity, PTET, R&D Credits
If you operate across multiple states, the past two weeks have been heavy. State tax updates April 2026 include OBBBA conformity decisions, new pass-through entity taxes, novel excises on emerging industries, and a fresh round of unclaimed property pressure from Delaware. Deloitte’s State Tax Matters Issue 2026-15 (April 17) summarized the activity, and several items deserve immediate attention from CFOs and multistate tax teams.
At SW Accounting & Consulting Corp, we track state-level conformity and PTET activity for clients with operations across the country. Below are the developments most likely to affect your 2026 estimated payments, your year-end PTET election analysis, and your unclaimed property exposure.
Which states are decoupling from OBBBA in April 2026? 🔀
Oregon, Maine, Kentucky, and others updated their IRC conformity to December 31, 2025 — but selectively decoupled from key OBBBA provisions, especially bonus depreciation, R&D expensing under section 174A, and the section 163(j) interest limitation modifications.
| State | OBBBA Items Decoupled | Effective |
|---|---|---|
| Oregon (S.B. 1507, S.B. 1510) | Bonus depreciation (168(k)), small business stock exemption, passenger vehicle loan interest deduction. Adds Oregon EITC increase and new jobs tax credit. Extends PTE-E through 2027. | Tax years beginning on or after January 1, 2026 |
| Maine (L.D. 2212) | Special depreciation for qualified production property (168(n)). Phases in section 174A R&D deduction over 5 years (2026–2030). | Tax years beginning on or after January 1, 2025 |
| Kentucky (H.B. 757) | Section 174A R&D expensing and section 163(j) modifications. | Tax years beginning on or after January 1, 2026 |
For multistate filers, the practical impact is significant: federal-state add-back schedules are growing, and the income tax provision for 2026 financial reporting needs to reflect divergent state treatment of OBBBA depreciation and R&D. Don’t assume rolling conformity — verify each state.
Oregon now requires an add-back for the difference between current-year IRC 168(k) deductions and 168(k) as in effect December 1, 2017. If your federal return uses 100% bonus depreciation under OBBBA, your Oregon return will look meaningfully different. Run the deferred state tax calculation now — don’t wait until provision time.
What is the new Maine PTET and 2% surcharge? 💼
Maine created a new pass-through entity tax (PTET) at the highest marginal individual rate, with a 90% refundable credit for qualified members — and added a 2% surcharge on individuals with Maine taxable income over $1 million ($1.5M / $750K depending on filing status).
PTET mechanics in Maine:
- Annual election at the entity level for tax years beginning on or after January 1, 2026.
- Tax base: aggregate distributive share of income for all qualified members (residents include all income; nonresidents only Maine-source).
- Rate: highest marginal Maine individual rate.
- Member credit: refundable, equal to 90% of the member’s share of PTET paid.
- Nonresident estimated tax: electing entity also remits 10% estimated tax on nonresident members’ share of PTET paid.
For partners and S-corp shareholders subject to the federal $10K SALT cap, Maine PTET joins 30+ other state workarounds that effectively shift state tax to the entity level — preserving the federal deduction. Run the projection: PTET is not always advantageous for every member.
What’s happening with state R&D credits and prediction markets? 🧪
Wisconsin extended its R&D credit carryforward from 15 to 50 years; Kentucky added a 14.25% excise on prediction market operators and now taxes data brokering services.
Wisconsin’s 50-year carryforward (replacing the prior 15-year limit) is a major shift for tech and life sciences companies that historically generated more R&D credits than they could use. Companies with substantial Wisconsin nexus should re-examine prior-year carryforward expirations and consider amended returns where credits were lost.
Kentucky’s H.B. 775 introduces a novel 14.25% excise tax on prediction market operators — a direct response to the rise of platforms like Kalshi and Polymarket. Same legislation: Kentucky removes the 200-transaction sales/use tax nexus threshold (relying solely on the dollar threshold) and starts taxing data brokering services as a taxable transaction. Multistate sales tax compliance teams should add Kentucky to the immediate review list.
The Wisconsin 50-year R&D carryforward is one of the longest in the country — only a few states are even close. For technology companies considering location for R&D operations, Wisconsin just became materially more attractive vs neighboring Illinois and Minnesota for credit utilization.
What is the Washington 9.9% income tax challenge? ⚖
A complaint filed in Washington challenges the constitutionality of the new 9.9% personal income tax on state taxable income exceeding $1 million — a controversial measure given Washington’s long-standing constitutional debate over income tax authority.
Washington has historically been one of the few US states with no personal income tax. The new 9.9% high-income tax — and the litigation challenging it — will determine whether Washington remains a no-income-tax jurisdiction or shifts permanently. High-net-worth individuals with Washington residency should monitor the case and review estate planning, equity comp timing, and residency planning. The 2026 filing season is the first under this rule; the litigation outcome could trigger refunds.
Why is Delaware sending unclaimed property invitations? 📬
Delaware will mail VDA program invitations on or around April 10, 2026 and August 14, 2026. Companies have 90 days to enroll voluntarily — or face referral to a Department of Finance audit, which typically yields worse outcomes.
Delaware is the country’s most aggressive unclaimed property enforcer due to its second-priority claim on holders incorporated in Delaware (which captures most large US companies). The VDA program lets you self-report and limit the look-back period. The audit alternative often involves contingent-fee third-party auditors with broad discovery authority and can result in millions of dollars of liability for companies that didn’t even realize they had unclaimed property exposure.
If you receive a VDA invitation, the right move is almost always to enroll. Talk to a CPA or specialty unclaimed property advisor immediately.
What action items should multistate tax teams prioritize? ✅
- OBBBA decoupling matrix. Build or update a state-by-state matrix tracking conformity to OBBBA bonus depreciation, section 174A R&D, and section 163(j). Use it for your 2026 provision workpapers.
- Maine PTET election analysis. Run member-level scenarios. The 90% refundable credit means PTET is generally favorable but not universally so — especially for partial-year members or those with significant non-Maine income.
- Wisconsin R&D credit recovery. Pull historical R&D credit schedules. If you lost credits to the prior 15-year carryforward limit, evaluate amended returns under the new 50-year rule.
- Delaware unclaimed property check-in. Confirm your governance: who opens the mail, who would route a VDA invitation, what’s the response protocol? Pre-empt the 90-day clock.
- Washington high-income clients. Communicate the 9.9% rule, confirm 2026 estimated payments, and monitor the constitutional challenge.
Frequently Asked Questions 🗂
For ongoing state tax developments, see Deloitte’s State Tax Matters newsletter (issued bi-weekly) and the relevant state Department of Revenue / Franchise Tax Board pages. The AICPA tracks PTET adoption nationally.
Need help navigating multistate OBBBA conformity, PTET elections, or unclaimed property exposure? SW Accounting & Consulting Corp’s state tax team works with multistate businesses across the country — reach out for a state nexus and conformity review.
