Direct Pay Offers Free Way to Pay Federal Taxes (IR 2026-109) The IRS reminded taxpayers with bank accounts that Direct Pay can be used to pay federal taxes from a checking or savings account. The service is available on IRS.gov, and taxpayers do not need to s...
IRS Warns of Fake Tribal Tax Credits (IR 2026-112) The IRS warned taxpayers, tribal communities, businesses and tax professionals about promoters selling fake “Tribal Tax Credits” that do not exist under federal law. Promoters may claim these cred...
AL - Autauga County rates increased and rental levy imposed Alabama announced Autauga County local sales, use, and rental tax changes effective September 1, 2026. The changes increase the county's general sales and general use tax rate from 2% to 2.5% and impo...
AZ - Updated local tax rate table released Arizona's Department of Revenue released the transaction privilege tax (TPT) rate chart effective October 1, 2026. It includes rate changes for San Tan Valley and Tusayan. Transaction Privilege and Ot...
AR - Local tax rate chart updated The Arkansas Department of Finance and Administration has released an updated list of local sales and use taxes imposed by counties and cities effective October 1, 2026. List of Cities and Counties Wi...
CA - Business interest deduction fix and other cleanup enacted California has enacted legislation that:decouples for personal income tax purposes from the federal limitations on IRC Sec. 163(j) business interest deductions enacted under the Tax Cuts and Jobs Act ...
DE - E911 wireless surcharge increases October 1 Delaware is increasing the emergency 911 system surcharge (E911) on the retail sale of prepaid wireless services from $0.60 to $0.90, effective beginning October 1, 2026. Retailers selling prepaid wir...
DC - Guidance for appealing FMV by recorder issued The District of Columbia has issued guidance discussing the procedure for appealing determinations of fair market value (FMV) by the recorder of deeds for imposing recordation and/or transfer taxes fo...
GA - Local Rate chart released for Q4 of 2026 The Georgia Department of Revenue has released a local sales and use tax rate chart for the quarter beginning October 1, 2026. Georgia Sales and Use Tax Rate Chart, Georgia Department of Revenue, Sept...
HI - Relief available for taxpayers affected by Hurricane Lowell Hawaii announced relief for taxpayers affected by Hurricane Lowell who may be unable to timely file their general excise/use tax (GET) or transient accommodations tax (TAT) returns and make timely pay...
ID: Reminder issued on exemption for small sellers daho residents are reminded about previously enacted legislation that provides a sales and use tax exemption for certain small sellers with annual sales of $5,000 or less. The exemption is effective J...
IN - October 2026 gasoline use tax rate announced The Indiana gasoline use tax rate for the month of October 2026 is $0.238 per gallon. Departmental Notice #2, Indiana Department of Revenue, October 2026...
IA - Freight charges tax exempt Petitioner is a contractor that designs and installs steel storage tanks. The storage tanks are shipped from the manufacturer to the building site, typically through an independent carrier. Petitioner...
KY - Standard deduction announced for 2027 tax year Kentucky announced that the individual income tax standard deduction is $3,470 for the 2027 tax year. News, Kentucky Department of Revenue, September 11, 2026...
LA - Change in procedure for roof tax credit announced The Louisiana Department of Revenue has announced that a preliminary fortified home evaluation is no longer required to qualify for the fortified roof tax credit against personal income tax. Revenue I...
ME - PTE tax filing and estimated payment information issued Maine Revenue Services has issued information on pass-through entity tax filing and estimated payments, including revised withholding tables and an estimated payment worksheet.The pass-through entity ...
MA - Interest rates remain unchanged for the fourth quarter of 2026 The interest rates on the underpayment and overpayment of Massachusetts taxes are unchanged for the period October 1, 2026, through December 31, 2026. The rates have held steady at 6% for overpayments...
MI - Reminder issued on home heating tax credit deadline Michigan Governor, Gretchen Whitmer, has reminded taxpayers that renters and homeowners have until September 30, 2026 to submit a claim for the home heating tax credit. Applicants must meet certain in...
MN - Conformity bill bulletin issued Minnesota issued a legislative bulletin on the Internal Revenue Code (IRC) conformity-related changes enacted in Article 1 of Ch. 128 (H.F. 2438), Laws 2026. Provisions discussed in the bulletin inclu...
MS - Ackerman restaurant tax imposed Mississippi announced that restaurants within the corporate limits of the City of Ackerman must collect the miscellaneous Ackerman Tourism and Parks and Recreation Tax beginning October 1, 2026. The M...
MT - Shareholder promissory notes were not straight debt Taxpayers appealed a final decision by the Montana Department of Revenue (Department) denying a deduction for interest paid on shareholder promissory notes (Subject Transactions). The Department concl...
NE - Rates for property tax credit relief announced The Nebraska Department of Revenue has announced that property owners will receive tax relief for real property taxes levied in 2026 through the Property Tax Credit Act and the School District Propert...
NV - Governor signs executive order on data center development Nevada Gov. Joe Lombardo signed an Executive Order that establishes the Nevada Standard for Responsible Data Center Development. The Order bars the Governor’s Office of Economic Development Board fr...
NH - Interest rates unchanged for 2027 The interest rates for the underpayment and overpayment of New Hampshire taxes administered by the Department of Revenue Administration are unchanged for calendar year 2027. The interest rate for unde...
NJ - Net operating loss deduction temporarily capped New Jersey is temporarily capping the corporate business tax net operating loss deduction at $1 million, for privilege periods ending on or after July 31, 2026 but before July 31, 2030. For privilege ...
NM - 2026 Q4 interest rates announced New Mexico has announced that its interest rate on underpaid and overpaid taxes will remain at 7% for the fourth quarter of 2026. Penalty & Interest Rates, New Mexico Taxation and Revenue Departme...
ND - Local rate changes announced North Dakota has announced the following local sales and use tax changes effective October 1, 2026: (1) the city of Kindred will remove its maximum tax (refund cap); (2) the city of Minot will increas...
OH - Disbursement service taxability needs clarification The Ohio Supreme Court vacated in part and remanded a sales-tax refund case because the Ohio Board of Tax Appeals’ lack of clarity concerning the taxability of the taxpayer’s disbursement-authoriz...
OK - SST taxability matrix and certificate of compliance updated Oklahoma has updated its Streamlined Sales and Use Tax (SST) Agreement taxability matrix and certificate of compliance. The changes are effective August 1, 2026. Taxability Matrix: Tax Administration...
OR - Multnomah County preschool for all rate increase delayed Oregon's Multnomah County delayed its Preschool for All personal income tax rate increase from January 2, 2027, to January 1, 2028. The delayed increase will add 0.8%. Ord. No. 2026-053, Laws 2026, ef...
PA - Philadelphia issues guidance on delivery location Philadelphia has issued sales and use tax guidance explaining that, starting October 1, 2026, businesses must collect the city’s 2% local sales tax based on where a taxable purchase is delivered rat...
RI - Certain farmers will be exempt from tax Effective July 1, 2027, certain urban and small farmers are exempt from Rhode Island personal income, sales, and property taxes. A "small farmer" is a farmer engaged in agricultural operations on fewe...
SD - Guidance on agricultural product exemptions revised South Dakota revised its sales and use tax guidance on how state and local taxes apply to agricultural products. The guidance states that South Dakota imposes a 4.2% state sales or use tax and a 1% to...
TN - Mineral severance tax announced for Jackson County Tennessee announced that Jackson County enacted a mineral severance tax rate of 20 cents per ton on certain minerals severed within the county, effective September 1, 2026. The rate applies to all san...
UT - Local tax rate changes announced The Utah State Tax Commission announced the following local sales and use tax rate changes, effective October 1, 2026.Emergency Services TaxWashington City and Hildale (Washington County) impose a 0.3...
VT - Updated guidance issued on use tax Updated guidance is issued regarding the calculation, filing, and payment requirements of use tax. Additional topics discussed include filing and paying the use tax electronically, local option tax, a...
VA - Interest rates unchanged for fourth quarter of 2026 The Virginia interest rates for the fourth quarter of 2026 remain at 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).Taxpayers whose taxable year ends on September 30, 202...
WA - Business and occupation tax exemption for insurers clarified The Washington Department of Revenue has clarified the business and occupation (B&O) tax exemption for insurers to reflect that a taxpayer is not exempt only because it receives payment from an in...
WV - Acute care hospital tax rate change announced West Virginia announced a change to the tax rate imposed on acute care hospitals that provide Medicaid and Medicare services in the state. Effective October 1, 2026, the rate is 2.5%. Administrative N...
WI - Municipality not entitled to full party status The Wisconsin Tax Appeals Commission has determined that when a person is not aggrieved by a decision of the Board of Assessors, the Commission lacks jurisdiction to hear their appeal. Municipalities ...
WY - Property tax exemption standards rule amended Wyoming adopted amendments to its rules regarding property tax exemption standards effective August 26, 2026. These amendments implement legislation effective July 1, 2026. This legislation made vario...
The Treasury Department and IRS have finalized regulations regarding the deduction of up to $10,000 in personal car loan interest by individuals for tax years 2025 through 2028. This includes regulations on information returns required to be filed by a lender or other person engage in a trade or business who receives $600 or more of qualified interest during the calendar year. The final regulations adopt the proposed regulations published in January 2026 (NPRM REG-113515-25) with some changes in response to public comments.
The Treasury Department and IRS have finalized regulations regarding the deduction of up to $10,000 in personal car loan interest by individuals for tax years 2025 through 2028. This includes regulations on information returns required to be filed by a lender or other person engage in a trade or business who receives $600 or more of qualified interest during the calendar year. The final regulations adopt the proposed regulations published in January 2026 (NPRM REG-113515-25) with some changes in response to public comments.
Qualified Personal Vehicle Loan Interest
For tax years beginning in 2025 through 2028, a noncorporate taxpayer may claim a deduction of up to $10,000 for qualified personal vehicle loan interest (QPVLI) paid or accrued during the tax year on a specified passenger vehicle loan (SPVL) incurred by the taxpayer for the purchase of an applicable personal vehicle (APV) for personal use. Generally, interest includes an amount paid, received, or accrued as compensation for the use or forbearance of money under the debt instrument.
The final regulations clarify that QPVLI also includes prepaid interest in the form of points and deferred or capitalized interest. In addition, it may include origination-related or financing-related charges, prepayment penalties, late-payment charges, default-related charges, and similar fees, if characterized as an interest expense for federal income tax purposes.
Secured by First Lien
Interest is QPVLI only if it is paid or accrued on debt for the purchase of an APV for personal use that is secured by a first lien. The final regulations clarify that an SPVL is secured by a first lien with the first voluntary security interest recorded against the vehicle. Any involuntary liens are disregarded even if given temporary higher priority at a later date.
A vehicle also may be considered secured by a first lien even if the lien has not yet been perfected or recorded due to short-term delays arising under State or local law. It may also be considered secured by a first lien where the lien is removed in connection with the taxpayer no longer owning the vehicle, but the taxpayer continues to be liable for the loan (repossession or insurance payout).
Purchase of Applicable Passenger Vehicle
An SPVL is qualified only to the extent the debt is incurred for the purchase of a new vehicle and any other items or amounts customarily financed in the same purchase transaction (for example, vehicle service plans, extended warranties, sales taxes, and vehicle-related fees). Any portion of a loan for items or amounts not customarily financed in the purchase are not qualified.
The taxpayer must allocate the debt on a pro rata basis. Whether items are customarily financed and directly related to the purchase of the vehicle is determined on an industry-wide basis and not on the particular financing terms. The final rules, however, expand the list of examples of items customarily financed in an APV purchase. The final regulations also maintain that debt incurred for negative equity in a prior purchased vehicle is not incurred for the purchase of an APV.
The requirement that an APV must be a new vehicle under the loan documentation refers to the lender’s classification of the vehicle for purposes of its financing programs. The original use of the vehicle must commence with the taxpayer. However, original use does not commence with a dealer if the vehicle is held primarily for sale to customers in the ordinary course of its trade or business. Original does not commence with a lessee if the lessee purchases the vehicle during or at the end of the lease term.
Information Reporting
Any lender or other person who, in the course of that trade or business, receives from any individual interest aggregating $600 or more for any calendar year on an SPVL, must report the receipt of interest on Form 1098-VLI to the IRS and the payee. The final regulations affirm that lenders are required to include only interest received on an SPVL for the purchase of an APV, the first use of which begins with the payee. This is required by statute and may require the lender to collect information it currently does not collect. The lender must file Form 1098-VLI for each SPVL.
The Treasury Department and IRS have issued proposed regulations providing that a private school is not eligible for Federal income tax exemption under section 501(c)(3) if it considers race, color, or national or ethnic origin in any of its educational, admissions, scholarship, athletic, or other school-administered policies. Any such consideration, under the proposed regulation subsection, would be considered de facto racial discrimination. The proposed rules would apply to taxable years beginning after May 31, 2027.
The Treasury Department and IRS have issued proposed regulations providing that a private school is not eligible for Federal income tax exemption under section501(c)(3)if it considers race, color, or national or ethnic origin in any of its educational, admissions, scholarship, athletic, or other school-administered policies. Any such consideration, under the proposed regulation subsection, would be considered de facto racial discrimination. The proposed rules would apply to taxable years beginning after May 31, 2027.
Racial Nondiscrimination
The proposed regulations would treat all race-based consideration in private education as contrary to a fundamental public policy, regardless of its purpose, including remedial or diversity-related objectives. This restriction does not inclulde policies or actions designed to eliminate prejudice or other forms of discrimination. The rules would cover private primary and secondary schools, colleges, professional or trade schools, and universities. The rules specifically do not include governmental units, any agency or instrumentality of a governmental unit, or any organization owned or operated by such an agency or instrumentality.
Application to Private Schools
To qualify for tax exemption, a private school could not consider race, color, or national or ethnic origin in:
(1) Educational or admissions policies
(2) Scholarship or loan programs
(3) Athletic or other school-supported programs
The proposal would not prevent religious schools from maintaining religious missions or selecting students based solely on religious affiliation. If finalized,Rev. Proc. 75-50would also be modified to remove provisions permitting certain race-based preferences for minority groups.
The proposed regulations would add§1.501(c)(3)-2and apply to taxable years beginning after May 31, 2027.
A Notice of Final Partnership Adjustment (FPA) issued by the IRS to a partnership was timely under Code Sec. 6235 because the partnership and IRS had agreed to extend the limitations period for making partnership adjustments. It was determined that the extended period under Code Sec. 6235(a)(1) controlled because the statute permits adjustments until the latest of the periods specified in Code Sec. 6235(a). Accordingly, the partnership’s motion for summary judgment was denied.
A Notice of Final Partnership Adjustment (FPA) issued by the IRS to a partnership was timely underCode Sec. 6235because the partnership and IRS had agreed to extend the limitations period for making partnership adjustments. It was determined that the extended period underCode Sec. 6235(a)(1)controlled because the statute permits adjustments until the latest of the periods specified inCode Sec. 6235(a). Accordingly, the partnership’s motion for summary judgment was denied.
The partnership, which was subject to the centralized partnership audit (CPA) regime, challenged an FPA disallowing a charitable contribution deduction. The partnership argued that the FPA was issued outside the applicable limitations period because the 330-day period following the notice of proposed partnership adjustment had expired. However, the parties had previously executed an agreement extending the limitations period for partnership adjustments underCode Sec. 6235(b).
Further, it was concluded that the periods specified inCode Sec. 6235(a)were not sequential deadlines. The statutory phrase “later of” required use of the latest applicable period, and an agreed extension underCode Sec. 6235(b)extended the limitations period for making adjustments, including issuance of the FPA. Because the FPA was mailed before expiration of the agreed extended period, the FPA was timely.
The Doug LaMalfa Federal Disaster Tax Relief Certainty Act has been signed into law by President Trump.
The Doug LaMalfa Federal Disaster Tax Relief Certainty Act has been signed into law by President Trump.
The law (H.R. 5366) allows victims of federally declared disasters to deduct qualified losses above $500 per disaster without itemizing and removes the 10 percent adjusted gross income threshold for those losses. A fact sheet on the bill can be foundhere.
Under the law, this treatment of personal casualty loss is available until Jan. 1, 2027.
It also excludes wildfire relief payments from taxable income regardless of when they are received, so long as the wildfire disaster declaration occurs after Dec. 31, 2014, and before Jan. 1, 2027.
President Trump signed the bill into law on Sept. 11, 2026.
The IRS has modified automatic accounting method change procedures for research or experimental expenditures and certain residential construction contracts. Rev. Proc. 2026-32 modifies sections 7 and 19 of Rev. Proc. 2025-23 to reflect changes made by the One, Big, Beautiful Bill Act (OBBBA).
The IRS has modified automatic accounting method change procedures for research or experimental expenditures and certain residential construction contracts.Rev. Proc. 2026-32modifies sections 7 and 19 ofRev. Proc. 2025-23to reflect changes made by the One, Big, Beautiful Bill Act (OBBBA).
For research expenditures, the procedure modifies accounting method changes underCode Secs. 174and174A.Code Sec. 174continues to require capitalization and 15-year amortization for foreign research expenditures.Code Sec. 174Agenerally allows a current deduction for domestic research expenditures paid or incurred in tax years beginning after December 31, 2024.
The procedure also revises rules governing adjustments associated with accounting method changes. It coordinates certainCode Sec. 481adjustments with the OBBBA transition method for recovering unamortized domestic research expenditures. It also extends through tax years beginning before 2028 waivers of certain eligibility restrictions for specified automatic changes.
Further, the IRS provides automatic accounting method changes for residential construction contracts affected by the OBBBA amendments toCode Sec. 460. Taxpayers may change from the percentage-of-completion method to an exempt contract method for qualifying contracts entered into in tax years beginning after July 4, 2025. Certain taxpayers may also change their treatment of costs underCode Sec. 263A.
The modified procedures generally apply to Form 3115, Application for Change in Accounting Method, filed after September 4, 2026. Special transition rules apply to certain previously filed Forms 3115.