Well Seasoned: Q2 2026 SALT Insights
Summary: This collection of Q2 2026 state and local tax insights explores key legislative, judicial, and policy developments affecting businesses and taxpayers across the country, including Indiana’s 2026 legislative changes; a California court decision expanding opportunities to challenge single-sales-factor apportionment; the growing trend of state wealth taxes; evolving sales tax considerations related to cash rounding; Kentucky’s expansion of sales tax to data brokering services; and Ohio’s return to a traditional back-to-school sales tax holiday.
Staying ahead of state and local tax developments requires more than monitoring headlines. It demands a clear understanding of how evolving rules impact compliance, risk, and planning opportunities. These insights highlight key considerations to help businesses navigate complexity, reduce exposure, and make more informed tax decisions.
2026 Indiana Legislative Update
The 2026 Indiana legislative session delivered impactful tax and policy updates, focusing on clarifying laws, closing loopholes, and refining compliance requirements across the board. Lawmakers also introduced stricter enforcement measures, expanded taxpayer obligations, and advanced initiatives such as tax amnesty expansion and incentives tied to a potential Chicago Bears stadium development.
California Court Decision Opens Potential New Path for Challenging Single-Sales-Factor Apportionment
California’s recent Smithfield Packaged Meats decision may provide multistate businesses with a roadmap for challenging single-sales-factor apportionment when it overstates in-state business activity. The ruling highlights how payroll, production, and other value-creating functions may support alternative apportionment positions in California and similar states.
State Wealth Taxes Expanding as Budget Pressures Mount: What Taxpayers Need To Know
States are increasingly targeting high-income and high-net-worth individuals through income surtaxes, capital gains taxes, investment income taxes, and taxes on high-value or second homes. As proposals continue to evolve, taxpayers should monitor developments that could affect residency, investment income, real estate ownership, and overall state tax liability.
A Nickel for Your Thoughts? Cash Rounding Creates New Sales Tax Questions
As penny production winds down, retailers should understand how cash rounding affects sales tax compliance. States are adopting different cash-rounding rules, creating compliance challenges for multistate businesses. This article reviews approaches in Indiana, New York, Ohio, and Illinois and outlines practical considerations for retailers.
Kentucky Expands Sales Tax to Data Brokering Services Beginning Aug. 1
Effective Aug. 1, 2026, Kentucky will apply sales tax to data brokering services under a broad new definition that may affect more businesses than expected. Companies should evaluate whether the law changes their sales tax collection, remittance, or compliance obligations as additional guidance becomes available.
Ohio Reverts To Traditional Back-To-School Sales Tax Holiday
Ohio’s 2026 back-to-school sales tax holiday returns Aug. 7-9, exempting qualifying clothing, school supplies, and instructional materials subject to statutory price limits. Businesses should review the updated eligibility rules, as many items covered under recent expanded holidays no longer qualify.
KSM’s tax professionals follow tax legislation across the country. If you have questions about how these or other legislative actions might affect your business, please contact your KSM advisor or fill out the form below.
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