NOV 2025 US State Tax Updates: Amnesty, Depreciation, and the Penny
It’s that time of year again! The calendar is flipping to December, and just when you thought you had your tax strategy figured out, the states decide to keep us on our toes. If you are managing state taxes for a business, or just trying to keep your own books in order, the sheer volume of updates can feel overwhelming. 🤯
Whether you are worried about the new “OBBBA” federal legislation impacting your state returns, or you are looking for a chance to wipe the slate clean with a tax amnesty program, I’ve got you covered. I’ve combed through the latest massive update from Deloitte (dated December 5, 2025) to break down exactly what is changing in key states like California, Texas, New York, and beyond. Let’s dive in and make sense of these changes together! 😊
Fresh Opportunities: New Tax Amnesty Programs 🏳️
Let’s start with some potentially good news. If you have outstanding tax liabilities, “amnesty” is probably your favorite word. Two states have recently announced programs that could save you a significant amount of money on penalties and interest.
Indiana: Mark Your Calendars for 2026
The Indiana Department of Revenue has dropped a hint about their upcoming amnesty program. [cite_start]Pursuant to legislation enacted earlier this year, they are required to establish a program for most taxes they administer, including adjusted gross income tax and sales tax[cite: 51].
While we are still waiting on the nitty-gritty details, here is what we know so far:
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[cite_start]
- Timing: The program is scheduled to take place in the second half of 2026[cite: 51]. [cite_start]
- Benefit: It provides for a potential waiver of all related penalties and interest[cite: 51].
The Department has stated that exact timeframes and details will be announced in the coming months, so stay tuned[cite: 52].
New Hampshire: Act Now!
Unlike Indiana, New Hampshire’s program is live and happening right now. [cite_start]Launched on December 1, 2025, this one-time opportunity runs through February 15, 2026[cite: 62].
[cite_start]This program covers all taxes administered by the Department that were due but unpaid on or before June 30, 2025[cite: 64]. [cite_start]This includes the Business Enterprise Tax (BET), Business Profits Tax (BPT), and others[cite: 64].
New Hampshire’s offer is quite generous. [cite_start]If you pay the tax due plus 50% of the accrued interest, they will grant amnesty from all penalties and the remaining 50% of the interest[cite: 62]. [cite_start]Even better, you don’t need a special form; just file the outstanding return and make the payment during the amnesty period[cite: 67].
The “OBBBA” Ripple Effect: State Conformity 🏛️
The federal “One Big Beautiful Bill Act” (OBBBA) is causing a stir, and states are scrambling to update their rules to either match (conform) or separate (decouple) from these federal changes.
Texas: A Win for Business Depreciation
Here is some fantastic news for Texas business owners. [cite_start]The Texas Comptroller has updated franchise tax depreciation rules to align with the OBBBA[cite: 277]. [cite_start]Previously, businesses often had to maintain two different sets of books because Texas used an outdated 2007 Internal Revenue Code[cite: 278].
[cite_start]Effective with the 2026 Texas franchise tax report, businesses can elect to deduct the full cost of qualifying fixed assets (like machinery and equipment) acquired after January 19, 2025[cite: 279]. [cite_start]This alignment is a huge relief that slashes red tape[cite: 280].
California: Updated Conformity Date
California is notoriously slow to update its conformity date, but they’ve made a move. [cite_start]New law updates California’s general conformity date to the Internal Revenue Code (IRC) from January 1, 2015, all the way to January 1, 2025[cite: 94].
[cite_start]This change applies to taxable years beginning on or after January 1, 2025[cite: 94]. One immediate impact? [cite_start]Most federal law changes regarding the e-filing of income tax returns now apply to California, lowering the e-filing threshold for many entities[cite: 96].
Not every state is jumping on the bandwagon. [cite_start]The District of Columbia passed emergency legislation to decouple from certain OBBBA provisions, specifically those regarding R&D expensing, business interest limitations, and special depreciation allowances[cite: 122, 123, 124, 125]. Always check your specific jurisdiction!
PTET: The Gift That Keeps on Giving 🎁
The Pass-Through Entity Tax (PTET) elections remain a hot topic for tax planning. Several states have clarified their rules to help taxpayers maximize this benefit.
| State | Key Update | Details |
|---|---|---|
| California | Extension of PTET | [cite_start]The elective PTET has been extended for taxable years beginning on or after Jan 1, 2026, and before Jan 1, 2031[cite: 97]. |
| Illinois | Investment Partnerships | [cite_start]Investment partnerships can now elect to pay the PTE tax on income earned or received in Illinois[cite: 145]. |
| Minnesota | Credit Claiming Timing | [cite_start]Owners may claim the PTET credit on their 2026 tax return if the entity’s fiscal year begins before Jan 1, 2026[cite: 180, 181]. |
Sales Tax: Pennies, Storage, and Cruises 🚢
State tax isn’t just about income; sales and use tax rules are shifting in some very interesting ways.
Iowa: Farewell to the Penny
[cite_start]In a historic move, the U.S. Mint marked the official end of the penny’s 232-year production run in November 2025[cite: 292]. Naturally, this impacts cash transactions. [cite_start]Iowa has issued guidance stating that retailers choosing to round cash transactions to the nickel must calculate sales tax on the taxable sales price before rounding[cite: 293].
[cite_start]Basically, rounding is for the total cash payment, but you still report the gross sales and sales tax based on the exact, unrounded figures[cite: 294].
South Dakota: Storage Triggers Tax
Contractors working in South Dakota need to be very careful. [cite_start]A recent newsletter clarified that use tax applies to materials purchased out-of-state as soon as they are stored in the state[cite: 300].
[cite_start]Previously, you might have delayed paying use tax until the materials were actually used in a project[cite: 302]. That loop is closed. [cite_start]Simply storing materials in a yard or warehouse now triggers the tax liability immediately[cite: 302].
🔢 NH Amnesty Deadline Checker
Are you eligible for the New Hampshire Amnesty program right now? Check the date!
Conclusion: Stay Proactive 📝
State taxes are dynamic, and 2025 is closing out with a flurry of activity. From the phasing out of pennies in Iowa to major corporate tax alignments in Texas and California, staying informed is the only way to avoid surprise bills—or missed savings.
If you have business activities in New Hampshire or Indiana, definitely look into those amnesty programs. For everyone else, check your state’s conformity to the federal OBBBA provisions to ensure your depreciation and expensing strategies are aligned. If you found this update helpful, or if you have a specific question about your state, drop a comment below! 😊
