Key takeaways:

• • • Understanding is not preparation 鈥� Most EU businesses are aware of 鈥� but not necessarily prepared for 鈥� the sweeping changes that ViDA is bringing.

    • Few businesses have a solid transition plan in place 鈥� Only 22% of tax and finance professionals surveyed say their organization has a formal, funded ViDA transition program in place.

    • Some key requirements are already changing 鈥� With e-invoice and real-time reporting requirements already shifting, businesses are in danger of falling behind, risking business continuity and non-compliance.

The European Union鈥檚 reforms around its value added tax (VAT) 鈥� known as VAT in the Digital Age (ViDA) 鈥� represent the most significant shift in tax compliance for businesses operating in the EU in a generation. ViDA is more than merely another new compliance requirement or technology upgrade. Indeed, many organizations will need to modernize their entire invoicing and tax reporting systems to get into compliance.

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The new compliance horizon: 2026 ViDA Readiness Report

While ViDA鈥檚 EU-wide mandates for cross-border e-invoicing and digital reporting take effect in 2030, the pressure on organizations is already mounting as individual EU member states roll out a patchwork of national requirements.

Digging deeper on this, a new report from the 成人VR视频 Institute, , reveals a striking paradox in how EU tax and finance professionals are preparing for this overhaul. While awareness is nearly universal, a significant gap remains between awareness of ViDA and tax teams鈥� readiness for its changes.

Indeed, 86% of EU tax and finance professionals say they are familiar with ViDA; however, a deeper look reveals that only 35% possess a detailed understanding of the specific requirements of the regulatory reform package. This creates a state of “comfortable uncertainty,” in which high initial confidence can often mask a lack of preparation for the massive technological and operational changes ahead.

Riding the 鈥淐onfidence Curve鈥�

One of the most compelling findings from the report is the “Confidence Curve” that shows how many organizations often start their journey with high levels of optimism. In fact, even among respondents who say their organization does not yet have a transition program in place or has one that is fragmented across EU member states, 90% say they feel confident in their organization鈥檚 ability to achieve ViDA compliance.

However, the Confidence Curve shows that confidence often regresses during the assessment and planning phase. As teams begin to uncover the complexities of new multi-jurisdictional compliance and real-time reporting requirements, the percentage of respondents who say they are “not very confident” doubles. It is only after a program is funded and embedded into digital transformation strategies that confidence strongly rebounds.

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Despite the high stakes, the majority of organizations are still finding their footing, the report shows. Unfortunately, more than three-quarters (78%) of respondents say their organization has no formal, funded ViDA transition program with central governance in place, meaning that they鈥檙e working in a fragmented country-by-country fashion or are still in the assessment stage.

These delays are risky Many EU member states have already begun rolling out e-invoicing mandates. That leaves those organizations without programs in place at greater risk of falling further behind.

The ViDA-enabled opportunity

Despite the massive changes in VAT requirements that ViDA brings, the reform package also offers corporate tax functions a tremendous opportunity to elevate themselves from a cost center to a strategic business partner. As the report outlines, taking that path forward requires a cross-functional commitment across numerous corporate functions, including tax, finance, IT, and legal departments.

Yet, those organizations that move beyond providing the “minimum viable compliance” and instead take the opportunity to invest in standardized data and central governance will be better positioned to turn these regulatory mandates into a compliance advantage for the tax function and a competitive advantage for the organization going forward.

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a full copy of the 成人VR视频 Institute’s 听丑别谤别

Key takeaways:

• • • The 2027 end date is not a runway 鈥� The One Big Beautiful Bill sets a statutory de minimis end date of July 1, 2027, but its own legislative history explicitly preserves the president鈥檚 authority to restrict it before that date. Sellers banking on a two-year transition period are reading the headline, not the fine print.

    • The Supreme Court win didn鈥檛 save the refunds 鈥� The Supreme Court鈥檚 IEEPA decision was real, but the administration switched legal authority to Section 1321 and kept the suspension running. Combined with congressional cover from the One Big Beautiful Bill, the path to recovering tariffs already paid is genuinely uncertain 鈥� not just delayed.

    • The refund clock just reset 鈥� The lead test case for processing refunds through CBP鈥檚 KAPE system, Atmos, just settled, forcing the process to restart with a new test case. Sellers waiting on refunds are further back in the queue than they realize.

Most e-commerce merchants couldn鈥檛 have told you what de minimis meant two years ago 鈥� mostly because they didn鈥檛 need to. It was the invisible infrastructure of cross-border trade, the threshold below which imported goods pass through customs without duties or taxes. And in the United States, that threshold sat at $800. For small online sellers sourcing internationally, it wasn鈥檛 a technicality 鈥� it was their business model. Now, that model is over.

De minimis was deliberate trade policy built on simple logic: the cost of collecting duties on a $25 phone case exceeds the revenue it generates. Let low-value goods flow freely, the thinking went, and e-commerce would grow 鈥� and it did.

The Trump administration鈥檚 first moves targeted Canada, Mexico, and China on fentanyl-related grounds. Then came Executive Order 14324, suspending duty-free de minimis for all countries effective August 29, 2025. Sellers who had never filed a customs entry suddenly had to file informal entries for goods valued up to $2,500 鈥� and pay tariffs on every single one. Last count, that has meant $175 billion in tariffs paid annually, with small shipments accounting for roughly 63% of that.

The legal basis for Trump鈥檚 tariffs 鈥� the International Emergency Economic Powers Act (IEEPA) 鈥� went to the Supreme Court, which constrained presidential authority to pass these tariffs. Many sellers took that as a signal that tariff refunds were coming 鈥� they shouldn鈥檛 have.

Then came the legislative layer that changed everything. The One Big Beautiful Bill Act (OBBBA) 鈥� H.R. 1, now law 鈥� codifies the end of de minimis under Title 19 with a statutory end date of July 1, 2027. Buried in the legislative history, however, is language explicitly stating that nothing in the bill limits the president鈥檚 existing authority to restrict de minimis before that date. The current suspension has congressional cover, meaning that any court challenge faces a much tighter call than it would have had a year ago.

What most sellers are getting wrong

What鈥檚 making matters worse, however, is that many small e-commerce merchants may not fully understand all the nuances of the laws and regulations they are trying to navigate. Indeed, there are certain aspects of the situation that many are getting wrong, including:

The 2027 date is a headline, not a lifeline 鈥� When the ne Big Beautiful Bill passed with a July 1, 2027, , many sellers assumed they had a transition period 鈥� time to adjust pricing, renegotiate supplier terms, and build a compliance infrastructure. Buried in House Report 119-106, however, is language explicitly stating that nothing in the bill limits the president鈥檚 existing authority to restrict de minimis before that date. Congress didn鈥檛 create breathing room; rather, it codified the end while leaving the accelerator fully intact. The 2027 date is when de minimis ends by law. Indeed, it could end sooner 鈥� and effectively already has.

The Supreme Court decision didn鈥檛 unlock refunds 鈥� The Court鈥檚 IEEPA ruling was significant, but the administration鈥檚 response was swift: reimposed the suspension of tariffs under Section 1321 authority as of February 24. The tariff meter never stopped; and now, with the OBBBA鈥檚 legislative history providing congressional cover, the 鈥� which specifically addresses whether sellers are entitled to refunds in the de minimis context 鈥� faces a much harder statutory construction argument than it would have a year ago. This may mean that the Supreme Court win was a legal victory that may not translate into money back.

The refund process just lost its test case 鈥� For sellers hoping to recover duties paid, the most practical path was through the KAPE system run by the U.S. Customs and Border Protection (CBP) 鈥� a workaround allowing refund claims to feed directly into an听听for verification. The lead case proving out that process, , just settled. Now, the trade legal community has to start over with a new test case, and nobody knows how long that is going to take. Sellers who filed protests rather than complaints at the Court of International Trade (CIT) are in a particularly difficult position 鈥� protests have time limits, and the CBP is under court order to re-liquidate open ones. Which legal bucket your entries fall into matters enormously right now.

The bottom line

The de minimis era enabled a generation of small merchants to compete globally on terms that would have been unimaginable 20 years ago. Its sunset doesn鈥檛 mean the end of cross-border e-commerce 鈥� but it does mean the end of operating on assumptions. The 2027 date, the Supreme Court decision, the refund process 鈥� each looked like relief and turned out to be more complicated than the headline suggested.

E-commerce merchants impacted by these de minimis developments need to talk to a trade attorney 鈥� not for the basics, but to understand where your claims stand, whether your protest strategy is still viable, and what the Atmus settlement means for you.

The storm isn鈥檛 over 鈥� and it may be more complicated than most sellers have been told.

For more on this, please tune into the 成人VR视频 Institute鈥檚 recent 鈥淐larity鈥� podcast, featuring , about the challenges facing small e-commerce merchants today

Key takeaways:

• • • Profits continue to be strong 鈥� Most tax & accounting firms saw revenues and profits increase in 2025 despite a chronic talent shortage and other systemic challenges.

    • Optimism around AI adoption 鈥� Tax professionals are generally optimistic about AI-enhanced technologies, and their firms are backing their optimism with unprecedented levels of investment.

    • Expansion of advisory services 鈥� Firms are expanding their advisory service offerings to clients in such areas as tax strategy and business consulting, fueling growth and providing opportunities for competitive differentiation.

Tax, audit & accounting firm professionals have been concerned for years that the one-two punch of do-it-yourself tax software and automation might eventually erode the value of 鈥攁nd demand for 鈥� their services. However, according to the 成人VR视频 Institute鈥檚 “2026 State of Tax Professionals Report”, which surveyed more than 600 tax professionals worldwide, firms of all sizes are adapting remarkably well to the current era of rapid technological change and political upheaval.

Indeed, tax professionals surveyed say that, in addition to traditional tax preparation, their customers want and need more advisory services, a trend that has been gaining momentum for several years. In response, many firms are continuing to expand their service offerings in the areas of tax strategy, business consulting, decision support, and financial planning 鈥� especially at larger firms with more abundant resources.

The result of this gradual shift in service offerings is that profit margins for tax & accounting firms worldwide averaged about 30% in 2025, with some firms registering profit margins of more than 40%.

Efficiency and growth were top strategic priorities

When asked about their top strategic priorities for the coming year, survey respondents cite efficiency and promoting firm growth as the top factors on the strategic agenda for 2026, even more emphatically than they did in 2025.

Further, they see that making more and better use of technology is still the most immediate path to greater efficiency, 听which is why introducing additional automation and AI 鈥� or just trying to get the most out of a firm鈥檚 existing technology stack 鈥� was also mentioned as an important focus for the upcoming year.

Still searching for solutions to talent challenges

Challenges still abound, however. An anemic pipeline of new talent and the ongoing retirement of senior personnel are among the top barriers to progress and profitability at many firms, the report indicates. The report also notes that the resulting competition for qualified candidates leads to overwork, skills gaps, and capacity restraints, all of which can impede a firm鈥檚 ability to compete and grow.

Many respondents say their firms are using multiple strategies to address these issues, including more targeted training, career development, outsourcing, task reallocation, and automation. Competition for top talent is intense, nevertheless; and the report shows that midsize tax firms may feel the talent squeeze harder than others, chiefly because larger firms can offer higher salaries and more career opportunities to retain top talent.

Another way firms are addressing their talent challenges is by automating more tax processes and workflows; however, the report also suggests that many firms have reached the point in their technological maturity at which it may be more difficult to identify additional processes to be automated. As a result, these firms find themselves in somewhat of a holding pattern, unable to advance technologically because of unyielding systemic and cultural impediments.

Meanwhile, many larger firms have already built the technological infrastructures they need to support more advanced forms of automation and data analysis. Now, the report reveals, these firms are shifting their focus to make better use of workflow-enhancing tools that can enable more efficient operations, expand their firm鈥檚 capabilities, and serve as a competitive differentiator.

Not surprisingly, the conversation around AI is heating up as well. While tax professionals may not be so interested in public chatbots such as Claude and ChatGPT, their attention is directed toward the many ways in which AI can enhance the tools they already use and how intelligent deployment of these tools can benefit their firms. Indeed, AI was the only category of technological investment which experienced year-on-year budget growth, the report shows.

Overall, the “2026 State of Tax Professionals Report” offers invaluable insight into where tax professionals see their firms and their industry now, shedding light on how the world鈥檚 top tax leaders are advancing the profession.

You can download a free copy of the full 成人VR视频 Institute 鈥�2026 State of Tax Professionals Report鈥� by filling out the form below:

Key takeaways:

• • • Mandatory compliance mandates are growing 鈥� Pillar 2, DAC6, and other real-time reporting mandates are increasing obligations in dozens of jurisdictions today, and those tax departments without the infrastructure to meet these obligations are already behind.

    • Real-time documentation is critical 鈥� The window between a transaction occurring and a tax authority scrutinizing it is shrinking to near zero in some markets, meaning that documentation must exist at the moment it is generated, not reconstructed afterward.

    • Data quality is compliance quality 鈥� Real-time compliance brings with it heightened pressure to avoid incomplete or inconsistent inputs, because increasingly sophisticated analytics used by tax authorities will find them.

In 2023, a major European manufacturer was hit with a seven-figure penalty not because its tax return was wrong, but because it couldn’t demonstrate how it arrived at the right answer. No documented governance framework, no clear ownership, and no audit trail. The numbers were defensible, but the process wasn’t.

That gap 鈥� between getting the right answer and being able to prove it 鈥� is where corporate tax risk now lives.

Governments and tax authorities worldwide are to self-report accurately. They are building legal frameworks, digital infrastructure, and enforcement mechanisms to verify compliance in real time. And for tax departments accustomed to managing compliance on their own terms, the window for a comfortable transition is closing fast.

A global tightening

Tax governance requirements are intensifying on multiple fronts. In the United States, for example, the IRS’s Large Business & International division has significantly expanded its compliance campaigns, targeting transfer pricing, research & development (R&D) credits, and multinational structures. Section 174 of the 2017 Tax Cuts and Jobs Act now requires companies to amortize R&D expenditures over five or 15 years depending on where research occurs 鈥� a change that many tax departments are still working through while absorbing new obligations on top of it.

Internationally, the pace is faster still. The framework that the Organisation for Economic Co-operation and Development (OECD) created for its base erosion and profit shifting (BEPS) rules has been adopted by more than 135 countries. Pillar 2 鈥� the global 15% minimum corporate tax rate 鈥� is already in effect in dozens of jurisdictions and is actively reshaping how multinationals structure their tax affairs. These are not coming changes 鈥� they are current ones.

Mandatory disclosure regimes have expanded in parallel. The European Union’s DAC6 directive requires intermediaries and taxpayers to report potentially aggressive cross-border arrangements, with penalties in some member states reaching hundreds of thousands of euros. The United Kingdom’s Senior Accounting Officer regime goes even further, placing personal legal accountability on named senior executives for the adequacy of their company’s tax accounting arrangements. Similar regimes are expanding in Australia, Canada, and Brazil.

These are not isolated experiments. They represent that is not going to reverse any time soon.

The real-time reporting challenge

That means, corporate tax departments must respond to this shift because the traditional audit model 鈥� authorities review historical returns and request documentation years later 鈥� is being replaced in a growing number of markets. Spain, Hungary, and South Korea already require taxpayers to submit transactional data directly to tax authorities through mandatory electronic systems. The EU’s Value added tax (VAT) in the Digital Age initiative will extend similar requirements across all 27 member states beginning in 2028.

For tax departments, this reporting compression is the central operational challenge of the next five years. A team that once had 12 to 18 months to reconstruct documentation for an audit now needs that documentation to be accurate and defensible at the moment it is generated. That requires a fundamentally different operating model 鈥� not just better record-keeping, but automated data capture and real-time reconciliation built into core financial systems 鈥� along with the ability to transfer that documentation electronically in real time.

3 actions tax departments must take now

To begin to address this dramatic change, corporate tax departments need to act now, taking steps that include:

1. Building a formal governance framework

Tax departments need written governance frameworks that clearly define what party owns each compliance decision, how decisions are reviewed and approved, and what controls exist to catch errors before filing. This means named ownership of obligations, documented sign-off processes, and regular internal reviews against a compliance calendar.

In the UK, this is already a legal requirement ; and similar standards are emerging in Germany, Australia, and across the EU. A framework should cover at minimum; the ownership of each material filing obligation; the review and approval chain for positions taken; escalation procedures for uncertain tax positions; and a schedule for internal control testing. Without these processes in place, tax departments could face regulatory penalties, personal liability for senior leaders, and reputational damage that may be difficult to recover from.

2. Fixing the data access problem

Tax departments consistently lack reliable, timely access to the financial data they need. This is primarily an organizational problem, not a technology one. Tax functions often sit downstream from finance systems designed without tax requirements in mind 鈥� meaning data often arrives aggregated, reclassified, or stripped of the granularity needed for compliance work.

Solving this requires tax leaders such as finance, IT, and business operations 鈥� not just to request data, but to influence how that data is captured at its source. That means participating in enterprise resource planning implementations, establishing data requirements for new business lines before they launch, and building direct feeds from source systems rather than relying on manual extracts.

3. Treating data hygiene as a compliance control

Tax authorities in the UK, the Netherlands, Germany, and the US are deploying advanced analytics to identify anomalies in corporate filings. Unexplained variances between statutory accounts and tax returns, inconsistencies in intercompany pricing, or mismatches between VAT and corporate income tax data could all trigger closer scrutiny.

Data hygiene must be treated as a compliance control, not an IT issue. In practice that means establishing reconciliation checkpoints between source data and tax inputs, maintaining documented data lineage so any figure in a return can be traced to its source, and conducting data quality reviews before filing deadlines 鈥� not after.

The bottom line

The regulatory trajectory is set, so that means the question for tax leaders whether their department will be ready when tested. Governance, data access, and data quality are no longer back-office concerns 鈥� they are the foundation upon which defensible compliance is now built.

Tax department leaders need to build that foundation now, before the examiner asks.

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Key insights:

• • • Real-time tax compliance has restructured the tax function 鈥� Dozens of nations now require structured invoice data in real time, with the EU mandating cross-border digital reporting by 2030. The traditional file-and-wait audit cycle is gone now, replaced by clearance regimes that can freeze multi-million-dollar invoices for nonconforming data.

    • Regulators have pulled ahead of the businesses they oversee 鈥� Tax authorities in mature CTC jurisdictions now arrive at audits with structured transaction data already processed by their own analytics. Government turnaround times that took months now take weeks, forcing multinational tax leaders to compress multi-year roadmaps into 12- and 18-month cycles to keep up.

    • The lessons travel beyond tax 鈥� There are two ways to lose this race: Outrun your own controls or surrender entirely. Both showed up in Las Vegas, and both will show up in every other regulated profession over the next decade.

LAS VEGAS 鈥� The听 sold out. A guest list that included tax directors from Amazon, Walmart, and Procter & Gamble, OpenAI’s tax department, the Big Four, 成人VR视频 and every other major tax software provider in the market spent three days at the Aria with pool deck, casino floor, and restaurants worth lingering over all a few steps away.

The room had every reason to spend its evenings somewhere else other than a sunless conference room talking about tax. Yet almost no one did. They were too busy grappling with an arms race the corporate audit side had begun to suspect it was losing.

And it鈥檚 one they cannot afford to lose.

End of the traditional model

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade. By April, more than 60 jurisdictions have moved or are moving to continuous transaction controls. Italy and Hungary were early; Poland, France, Belgium, Brazil, Saudi Arabia, India, and Singapore are now operational or imminent, and countries like Spain, Germany, the United Kingdom and the United Arab Emirates are on the way. The European Union has locked onto a 2030 deadline for cross-border real-time digital reporting and a 2035 backstop for harmonizing what’s left.

The traditional model 鈥� issue an invoice, file a return weeks later, audit when the auditor gets around to it 鈥� no longer exists in those jurisdictions. Tax authorities now see the transaction as it happens, validates it in structured form, and pre-fills the return on the taxpayer’s behalf.

What this new process has done to the tax function is fundamentally alter its structure in a way leaves practitioners reeling. The job used to be a craft of Excel, judgment, and institutional memory. Now, at the high end, it has become as much a data science problem as an accounting one.

The arms race is real-time tax compliance, and it has dramatically restructured the ground beneath the tax profession in less than a decade.

Attendees at TEI鈥檚 2026 Tax Technology Seminar polled themselves on tooling, and the answers came back as a list of data pipelines that dozens of attendees seemed to favor: Alteryx, Power Platform, Snowflake, Databricks, Microsoft Fabric, & Palantir Foundry. These platforms are running agentic AI systems against historical filings, deploying validation agents to critique their own outputs, and using AI-driven image-to-text solutions to pull structured data out of state tax notices that never arrive in the same format twice. They are data integration pipelines in 15 minutes that would have sat in an IT queue for two months before being answered.

They have little choice as the stakes are far higher and the challenges far more demanding than they used to be. In a clearance regime, an invoice has no legal force until the tax authority returns its identifier. Did you submit the wrong VAT ID, malformed schema, or mismatched master data? Congratulations! Your invoice is rejected. That means the truck doesn’t move, the buyer doesn’t pay an invoice that may be in the millions of dollars and then the penalties stack on top. Italy, for instance, charges a fee of 70% of the disputed VAT.

And then there are the audits.

Outgunned

The audit isn’t an occasional event anymore. In government jurisdictions with mature continuous-transaction-control tax regimes, it is a conversation that started weeks before the auditor walked in, on data their analytics had already processed.

A speaker on a seminar panel led by Deloitte and 成人VR视频 described the dynamic plainly: Tax authorities in those jurisdictions have arrived at audits already knowing more about the transactions than the companies and their in-house audit teams sitting across the table. Not because anyone is hiding anything, but because the data arrived at the tax authority in structured form, in real time, and the authority had run its analytics on it before the meeting was even on the calendar. One panelist said this represents “a shift from us preparing returns to us answering notices on the data that’s been shared.”

What the room kept circling around, however, was that regulators have not just kept pace with their counterparties, they鈥檝e now pulled ahead. Singapore, one panelist noted, is doing more with AI than even major companies. Indeed, government turnaround times that used to take months are now closing in weeks, which is forcing multinational tax leaders to compress their multi-year roadmaps into 12- and 18-month cycles 鈥� not because they want to but because their counterparties already had.

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI鈥檚 2026 Tax Technology Seminar as cautionary tales.

This asymmetry is structural, and that is what makes it an arms race rather than a transition. There is no version of this dynamic in which the company being audited wins by being more careful, more thorough, or more well-prepared at the end of the quarter. The advantage now accrues to the side with the fastest and cleanest pipelines, that runs the smartest AI, and that understands the way these increasingly complex systems interact. Increasingly, that winning side is the government. And, more alarming, this isn鈥檛 just a problem for this particular industry 鈥� tax just happened to get here first. However, it鈥檚 coming for everyone.

Two ways to lose

The lesson that corporate tax functions have been forced to absorb is that there are two ways to lose this race, and both were on display at TEI鈥檚 2026 Tax Technology Seminar as cautionary tales. The first is to outrun your own controls. AI coding tools that let a tax analyst build a working data integration pipeline in 15 minutes are genuinely valuable; they also let that same analyst deploy something nobody else has reviewed, documented, or knows how to maintain. An OpenAI panelist conceded the point when an audience member asked about the security implications of vibe coding 鈥� clearly, a new capability is also a new problem.

The second way to lose is harder to talk about. One panelist described, to attendees鈥� general dismay, hearing of companies that have given up on compliance entirely 鈥� instead, they pad their numbers with a safety margin and treat the eventual audit as the cheaper of the two costs. The panel recoiled 鈥� one member responded with a flat “Do not do this.” However, the anecdote landed because it isn’t theoretical. When the gap between what regulators can see and what your team can produce becomes wide enough, surrender starts to look rational.

Playing to win

Of course, the attendees at TEI鈥檚 2026 Tax Technology Seminar were not surrendering. If they were, they’d have been at the pool deep into their third cocktail. Or they’d have been on the casino floor or were about to catch an afternoon show. Instead, day after day, the tables filled, the exhibit hall ran hot, and the room was buying, listening, and building.

The game has changed and the stakes have risen 鈥� and the room is dead set on playing to win.

You can find more of听our coverage of Tax Executives Institute events here

• • • The reactive phase is partly a mindset problem 鈥� More than half of tax departments remain stuck in reactive, compliance-focused operations, not only because of frozen budgets, but because of cost-center thinking that shapes cost-center behavior.

    • The value is there, but the measurement isn’t 鈥� Two-thirds of tax professionals say their department鈥檚 technology investment has already enabled more strategic work; yet 22% say they track no performance metrics at all, making that value invisible to the people who control the budget.

    • The rebrand starts internally 鈥� With AI integration timelines compressing to between 1 and 2 years, tax departments that shift their posture now by measuring wins, designating leadership, and building the business case will be better positioned to lead 鈥� and those that don’t will fall further behind, faster.

Apart from the sales department, most other departments within a business are simply viewed as a cost center, and the tax department is no exception. However, like so much of that thinking, this view isn鈥檛 quite accurate because it is the tax department that can uncover the most savings for the business.

You need not look further than recent data that shows while 67% of tax professionals say their department鈥檚 technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department鈥檚 value to the C-Suite.

Given this, it鈥檚 somewhat unsurprising that this cost-center view persists. Worse yet, is often internalized by in-house tax teams themselves. It is one thing to be viewed and treated as a cost center but to act like one is a different matter.

So, what if the bigger problem isn’t how the rest of the business views the tax department but instead how the department views itself?

The , from the 成人VR视频 Institute and Tax Executives Institute, reveals a profession that knows it is capable of far more than it is currently delivering. And yet the same patterns repeat: Budgets stay flat, technology adoption stays slow, and a majority of departments remain stuck in a reactive phase in regard to their technological development that has “remained stubbornly consistent over the past few years,” according to the report.

That’s not just an organizational failure; rather, that’s a mindset problem 鈥� and it starts from within the tax department.

The choices we keep making

The report outlines a Technology Maturity Curve that maps a progression in tech development from chaotic through reactive, proactive, optimized, and predictive stages.

This year, 64% of respondents placed their tax department at the chaotic or reactive end of the spectrum 鈥� up from 57% last year. The reactive phase is the operational definition of a cost center: Heads-down, output-focused, and disconnected from the broader business.

The report reveals something even more important. In those cases in which the budget isn’t the primary constraint, behavior doesn’t change. Almost one-third of respondents (32%) said their strategy for addressing capacity constraints is process optimization 鈥� without new technology or additional hiring. Not because they can’t pursue more, but because that’s the default mode.

One respondent put it plainly: “鈥ur company as a whole is making significant changes, but the tax department is typically an afterthought in those decisions.”

This raises a question that鈥檚 worth asking: Who taught the company to treat tax as an afterthought?

There鈥檚 evidence showing that tax departments are more

The data to challenge the cost-center identity isn’t missing; rather, it’s just not being captured or communicated to the C-Suite.

Two-thirds of respondents (67%) said their tax department鈥檚 technology investment over the past three years has already enabled a shift toward more strategic, proactive work, such as data analytics, forecasting, risk assessment, and decision-making support. Among larger departments, nearly half (48%) are now spending more time on these higher-value activities. This clearly shows that companies that have invested in tax automation are reporting real results, such as improved accuracy, reduced errors, lower costs, and streamlined workflows.

And yet, 22% of tax departments track no technology performance metrics at all, according to the report 鈥� not time savings, not error reduction, not ROI. Nothing.

While 67% of tax professionals say their department鈥檚 technology investment has already enabled them to do more strategic work, 22% say they track no performance metrics at all, making it difficult to demonstrate the tax department鈥檚 value to the C-Suite.

That is cost-center thinking in action 鈥� the belief that it鈥檚 the job of the tax department to do the work, but not to prove its value. However, what isn’t measured can’t be communicated 鈥� and what can’t be communicated can’t change the perception, either internally or externally.

The rebrand starts with how departments see themselves

The most important audience for the tax department’s rebrand isn’t the C-Suite. It’s the department itself.

That means tracking wins and building a formal business case for investment 鈥� grounded in hard ROI and cost savings, which the report identifies as the metrics that are most important to Finance and IT, the two functions that frequently share control of the tax technology budget.

It also means getting serious about leadership. The portion of tax departments with a designated person leading tax technology strategy jumped to 88%, from 51%, in a single year. However, a title only goes so far; and the report is clear 鈥� that role only works when backed by a team that believes it belongs at the decision-making table.

Finally, this rebranding means treating AI as an opportunity, not a threat. The majority of tax professionals have compressed their expectations for AI integration to 1鈥�2 years, from 3鈥�5 years, with 7% saying AI is already central to their workflow. Those departments still locked in cost-center mode are the least prepared for that shift 鈥� because cost centers don’t invest ahead of the curve.

The narrative changes when the mindset changes

No one is going to rebrand the tax department on its own, it has to come from within. Further, it has to be built through deliberate measurement, consistent communication, and a shift in how tax professionals think about our own work.

Your department is not a cost center. The work proves it, and the data backs it up. Now, you should act like you believe it.

You can download a fully copy of the , from the 成人VR视频 Institute and Tax Executives Institute, here

Key takeaways:

• • • Your post-OBBBA forecasts should look different 鈥� If the tax department doesn’t own the OBBBA model, someone else will own the OBBBA story.

• • • Rely on your department鈥檚 inner strengths 鈥� It鈥檚 governance and analysis 鈥� not tools 鈥� that get you into the strategy room.

    • Factor in the conflict in the Middle East 鈥� The Iran war risk belongs in your tax model, not just in your CFO’s macro deck.

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, enacted large business tax cuts, most notably by providing permanent full expensing of many forms of investment. Under the previous major corporate tax legislation, 2017鈥檚 Tax Cuts and Jobs Act (TCJA), bonus depreciation was scheduled for gradual phase-out following 2023. The OBBBA restored that expensing 100% retroactively for assets acquired from mid-January 2025 onwards.

The after-tax cost of new machinery, fleets, and equipment has effectively fallen by around 21%, designed to encourage immediate capital outlays by allowing businesses to write off these expenses in the year they are incurred rather than amortizing them over five years.

For corporate tax departments, that’s not a disclosure footnote 鈥� that’s your capital plan.

Capital-intensive corporations will see tax burdens reduced through permanent rate extensions, depreciation adjustments, and expansion of the state and local tax (SALT) deduction cap 鈥� but only if your models are built to capture the timing and location of investment, the mix of debt compared to equity, and where your organization books its next dollar of income.

Not surprisingly, most corporate tax departments aren’t there yet. They’re still recalculating last year, plus a few adjustments. That’s glorified compliance, not modeling.

A standout tax department doesn’t ask, What’s the OBBBA impact? Rather, it asks, Which version of OBBBA do we choose for this business? 鈥� and it has the models to back it up.

From spreadsheet heroics to controlled modeling

For many organizations, tax modeling still means creating a massive spreadsheet that only one director truly understands. The spreadsheet gets pulled out for budget season, rebuilt under pressure, and quietly retired until next year. That’s a single point of failure, not a process.

And after OBBBA, continuing that practice is dangerous. One wrong assumption on expensing or interest limitation can move cash tax by millions of dollars and blindside the Finance Department.

Here’s what disciplined modeling looks like in practice:

• • • Create a unified model 鈥� Build one integrated model that the whole team can use or accept that your department is choosing to fly blind.
    • Use the same assumptions 鈥� Standardize the levers that matter most (such as capex timing, financing mix, jurisdiction, and incentives) and make sure every scenario runs off the same assumptions.
    • Conduct modeling reviews 鈥� Treat major OBBBA-driven decisions (such as large capex, funding shifts, supply-chain redesign) as tax deals that must go through a modeling review before they’re greenlit.
    • Document your assumptions explicitly 鈥� Under permanent full expensing, the difference between a well-supported assumption and a poorly documented one isn’t just an audit risk, rather it’s a credibility problem with your CFO.

It鈥檚 also important to remember that in a post-OBBBA world, this level of disciplined modeling is not technology transformation 鈥� it鈥檚 basic survival.

Governance: Where leaders quietly win or loudly fail

The differentiator isn’t which corporate tax department has the fanciest tool 鈥� it’s which one has the cleanest governance. And the data is unambiguous: More than half (55%) of tax departments are still in the reactive phase of their technological development, stuck with five capex models circulating with five discount rates and the tax team arriving late to the planning meeting.

Those tax departments that are breaking out of that pattern share one trait: They put someone formally in charge. In the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report, a large portion (88%) of survey respondents said their company had appointed a person to lead the tax department’s technology strategy. That number jumped a whopping 37 percentage points, from 51%, from the previous year鈥檚 survey. That single structural move separates those departments with a governance model from those that simply hold a governance conversation every budget cycle and forget about it.

Clearly, this type of ownership drives results. Two-thirds of those surveyed agreed that their company’s investment in technology has enabled a shift from routine, reactive work to more strategic, proactive, higher-value work.

Under OBBBA, the kind of governance isn’t housekeeping. It’s how you get invited into strategy discussions instead of having to clean up after things go awry.

Why your OBBBA win may not feel like a win

On paper, the tax changes embedded in the OBBBA look generous. In practice, your effective tax benefit is colliding with something you don’t control.

When the war on Iran began, all shipping through the Strait of Hormuz was effectively halted, removing roughly one-fifth of the world’s oil and gas supply from the market. Fuel prices throughout the world spiked and are likely to remain elevated as long as conflict persists.

With oil prices hovering around $100 a barrel, there are will wipe out the benefits of higher tax refunds this year for most Americans. If those benefits, arising from Trump’s 2025 tax cuts, are erased for the average American, only the top 30% of taxpayers will still seeing a net gain.

For corporate planning purposes, the parallel dynamic is real: The topline OBBBA benefit is being eroded by higher fuel, freight, and financing costs across the business and its supply chain.

Inflationary pressures are being driven by higher energy prices tied to the Iran war, and the conflict’s impact on a wide range of goods and services is likely to last for months 鈥� with experts saying even a ceasefire is unlikely to immediately ease global energy shortages.

A serious corporate tax department doesn’t handwave these concerns away. It takes three actions:

1. 1. 1. Run a war-extended scenario 鈥� The scenario should show exactly how sustained higher energy costs and borrowing rates change the payoff from accelerated expensing and leverage 鈥� with specific numbers, not just directional commentary.
      2. Share your forecasts internally 鈥� Put your monthly or quarterly cash-tax forecasts on the table for Finance to see, so that it can manage liquidity rather than hope the annual plan holds.
      3. Force the hard conversation 鈥� Ask the tough question: At today’s rates and fuel costs, the after-tax return on this project is X. Are we still in? That question should come from the tax team now, not from the finance team six months later.

Clearly, the daily fluctuations in oil prices matter less than monthly and quarterly averages 鈥� and volatility will likely remain elevated given the absence of a clear timeline for the end of the war. That’s exactly the kind of sustained uncertainty that belongs front and center in your scenario set, not in a footnote.

The bottom line

The OBBBA gives corporate tax departments a genuine opportunity to move from being simply a compliance function to becoming more of a strategic advisor. Permanent full expensing, richer cost recovery, and more flexible interest rules can create real levers to add value, but only for those organizations that model them rigorously, govern them cleanly, and stress-test them against the macro environment their business actually faces today.

Indeed, the Iran war is a live test of that readiness. The corporate tax departments that show up with modeled scenarios, cash-tax forecasts, and a clear point of view on after-tax returns will earn a seat at the strategy table. The ones that show up with caveats will be asked to leave it.

You can download a full copy of the 成人VR视频 Institute鈥檚 recent 2026 Corporate Tax Department Technology Report here

Key takeaways:

• • • Country-by-country reporting will only increase in complexity 鈥� Australia’s enhanced Country-by-country reporting (CbCR) requirements 鈥� reconciling taxes accrued against taxes credited 鈥� are a preview of where other high-scrutiny jurisdictions are heading, and companies need to build that explanatory analysis capability now, systematically, rather than scrambling later.

    • There has to be a shared narrative from corporate teams 鈥� The EU鈥檚 public CbCR is a reputational event, not just a filing. So that means tax, communications, and investor relations teams need a shared narrative before the data goes public 鈥� inconsistencies create exposure you do not want to manage reactively.

    • Rethink your filing jurisdiction in light of changes 鈥� If EU filing jurisdiction was chosen at initial implementation and never revisited, look again. Guidance has matured, and a more efficient or better-suited option may now be available.

WASHINGTON, DC 鈥� Among the many pressing topics discussed in detail at the recent , country-by-country reporting (CbCR) and its ability to reshape the corporate tax industry, certainly had its place. Between escalating local jurisdiction requirements, the , and for deeper explanatory disclosures, CbCR has quietly evolved from a transfer pricing filing obligation into something far more strategically consequential.

The floor is just the floor

The creation of the by the Organisation for Economic Co-operation and Development (OECD) was intended as a minimum standard for countries. And now jurisdictions are increasingly layering additional requirements on top of the OECD鈥檚 basic template, resulting in a widening gap between the standard requirements and what tax authorities actually want.

Currently, Australia is the most pointed example. Australian tax authorities are now requiring multinational groups to go beyond the standard CbCR data fields and provide explanatory narratives that reconcile taxes accrued against taxes actually credited. This requires corporate tax departments to bridge the gap between financial statement accruals and their organizations鈥� cash tax positions in a way that is coherent, defensible, and consistent with positions taken elsewhere.

At the TEI event, panelists explained that for tax departments this will carry complex timing differences, deferred tax positions, or significant jurisdictional mismatches between booked and cash taxes. Indeed, this additional layer of scrutiny will need dedicated attention.

The broader signal matters: Australia will not be the last jurisdiction to move in this direction. So that means that tax departments should treat Australia’s approach as a leading indicator of where other high-scrutiny jurisdictions could be heading. Building the capability to produce this kind of explanatory analysis systematically 鈥� rather than scrambling jurisdiction by jurisdiction 鈥� would be the smarter long-term investment for corporate tax teams.

Public CbCR in the EU: The transparency ratchet has turned

For US-based multinationals with significant European operations, the EU’s public CbCR directive has fundamentally changed the calculus. Unlike the confidential tax authority filings most corporate tax departments are accustomed to, the EU鈥檚 public CbCR rules put organizations鈥� jurisdictional profit and tax data into the public domain, making it visible to investors, journalists, civil society groups, and organizations鈥� employees and customers.

The EU framework specifies which entities trigger the reporting obligation and which entity within the group is responsible for making the public filing. That scoping analysis is not always straightforward for complex multinational structures and getting it wrong could present both reputational and legal risk.

Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data.

For US-headquartered groups, the implications extend well beyond Europe. Public CbCR data is now being read alongside US disclosures, reporting on ESG activities, and public narratives about tax governance. Inconsistencies, including those technically explainable, could create unwanted noise about the company. This is clearly another reason why the tax function should partner across the business 鈥� in this case with the communications team 鈥� to make they both are aligned to tell the CbCR story instead of being caught off guard by a journalist or an investor during an earnings call.

Questions that US multinationals should be asking

Fortunately, US multinationals with multiple EU subsidiaries are not required to file public CbCR reports in every EU member state in which they have a presence. Instead, under the EU framework, a qualifying ultimate parent or standalone undertaking can satisfy the public disclosure requirement through a single filing in one EU member state, provided the relevant conditions are met. Germany and the Netherlands have emerged as two of the more popular choices for this consolidated filing approach, given their well-developed regulatory frameworks and the depth of available guidance on what compliant disclosure looks like in practice.

The strategic implication is meaningful. Choosing a filing jurisdiction is not purely an administrative decision 鈥� it is a choice that affects the regulatory environment that governs the disclosure, the language requirements, the timing, and the interpretive framework that applies to data. Corporate tax departments that defaulted to a filing jurisdiction early in the EU implementation process should take a fresh look. Regulatory guidance has matured significantly, and there may be a more efficient or better-suited path available than the one originally chosen.

The uncomfortable divergence

There is a notable irony in the current environment. Domestically, the IRS and U.S. Treasury’s 2025-2026 Priority Guidance Plan reflects an explicit focus on deregulation and burden reduction, detailing dozens of projects aimed at reducing compliance costs for US businesses. Meanwhile, the international compliance environment has moved in the opposite direction, adding disclosure layers, explanatory requirements, and public transparency obligations that many US businesses cannot avoid simply because they are headquartered in the United States.

This divergence has a direct implication for how tax departments allocate resources and make the internal case for investment in international compliance infrastructure. The burden internationally is not going down 鈥� indeed, it is intensifying 鈥� and that argument is now backed by concrete examples rather than projections.

3 things worth doing now

There are several actions that corporate tax teams should consider, including:

Audit CbCR data quality with Australia’s enhanced requirements in mind 鈥� If you cannot readily reconcile taxes accrued to taxes credited at the jurisdictional level, that gap needs to be closed before it becomes an authority inquiry.

Revisit EU filing jurisdiction strategy 鈥� If your jurisdictional decision was made at the time of initial implementation and has not been reviewed since, it is worth a fresh look before the next reporting cycle.

Develop an internal narrative around public CbCR data before it circulates externally 鈥� Your company鈥檚 tax story should not be a surprise to the corporate teams involved in communications, investor relations, or ESG 鈥� and in today鈥檚 world, assuming such news stays quiet is no longer a safe assumption.

While CbCR started as a tool for tax authorities, it today has become something more visible, more public, and more consequential than that 鈥� and that trajectory is not reversing any time soon.

You can download a full copy of the 成人VR视频 Institute鈥檚

Key takeaways:

• • • Only IEEPA鈥慴ased tariffs are up for refund 鈥� Refunds will flow electronically to importers of record through ACE, the government鈥檚 digital import/export system, but only once CBP鈥檚 process is finalized.

    • Liquidation and protest timelines are now critical 鈥� An organization鈥檚 tax concepts that directly influence which entries are eligible and how long companies have to protect claims.

    • Tax functions must quickly coordinate with other corporate functions 鈥� In-house tax teams need to coordinate with their organization鈥檚 trade, procurement, and accounting functions to gather data, assert entitlement, and get the financial reporting right on any tariff refunds.

WASHINGTON, DC 鈥� When the United States Supreme Court issued its much-anticipated ruling on President Donald J. Trump鈥檚 authority to impose mass tariffs under the International Emergency Economic Powers Act (IEEPA) in February it set the stage for what it to come.

The Court ruled the president did not have authority under IEEPA to impose the tariffs that generated an estimated $163 billion of revenue in 2025. In response, the Court of International Trade (CIT) issued a ruling in requiring the U.S. Customs and Border Protection (CBP) to issue refunds on IEEPA duties for entries that have not gone final. That order, however, is currently suspended while CBP designs the refund process and the government considers an appeal.

At听the recent , tax experts discussed what this ruling means for corporate tax departments, outline what is and isn鈥檛 a consideration for refunds and the steps necessary to apply for refunds.

As panelists explained, the key issue for tax departments is that only IEEPA tariffs are in scope for refund 鈥� many other tariffs remain firmly in place. For example, on steel, aluminum, and copper; Section 301 tariffs on certain Chinese-origin goods; and new of 10% to 15% on most imports still apply and will continue to shape effective duty rates and supply chain costs.

So, which entities can actually get their money back?

Legally, CBP will send refunds only to the importer of record, and only electronically through the government鈥檚 digital import/export system, known as the Automated Commercial Environment (ACE) system. That means every potential claimant needs an with current bank information on file. And creating an account or updating it can be a lengthy process, especially inside a large organization.

If a business was not the importer of record but had tariffs contractually passed through to it 鈥� for example, by explicit tariff clauses, amended purchase orders, or separate line items on invoices 鈥� they may still have a commercial basis to recover their share from the importer. In practice, that means corporate tax teams should sit down with both the organization鈥檚 procurement experts and its largest suppliers to identify tariff鈥憇haring arrangements and understand what actions those importers are planning to take.

Why liquidation suddenly matters to tax leaders

As said, the Atmus ruling is limited to entries that are not final, which hinges on the . CBP typically has one year to review an entry and liquidate it (often around 314 days for formal entries) with some informal entries liquidating much sooner.

Once an entry liquidates, the 180鈥慸ay protest clock starts. Within that window, the importer of record can challenge CBP鈥檚 decision, and those protested entries may remain in play for IEEPA refunds. There is also a 90鈥慸ay window in which CBP can reliquidate on its own initiative, raising questions about whether final should be read as 90 days or 180 days 鈥� clearly, an issue that will matter a lot if your company is near those deadlines.

Data, controversy risk & financial reporting

The role of in-house tax departments in the process of getting refunds requires, for starters, giving departments access to entry鈥憀evel data showing which imports bore IEEPA tariffs between February 1, 2025, and February 28, 2026. If a business does not already have robust trade reporting, the first step is to confirm whether the business has made payments to CBP; and, if so, to work with the company鈥檚 supply chain or trade compliance teams to access ACE and run detailed entry reports for that period.

Summary entries and heavily aggregated data will be a challenge because CBP has indicated that refund claims will require a declaration in the ACE system that lists specific entries and associated IEEPA duties. Expect controversy pressure: As claims scale up, CBP resources and the courts could see backlogs. If that becomes the case, tax teams should be prepared for protests, documentation requests, and potential litigation over entitlement and timing.

On the financial reporting side, whether and when to recognize a refund depends on the strength of the legal claim and the status of the proceedings. If tariffs were listed as expenses as they were incurred, successful refunds may give rise to income recognition. In cases in which tariffs were capitalized into fixed assets, however, the accounting analysis becomes more nuanced and may implicate asset basis, depreciation, and potentially transfer pricing positions.

Coordination between an organization鈥檚 financial reporting, tax accounting, and transfer pricing specialists is critical in order that customs values, income tax treatment, and any refund鈥憆elated credits remain consistent.

Action items for corporate tax departments

Corporate tax teams do not need to become customs experts overnight, but they do need to lead a coordinated response. Practically, that means they should:

• • • confirm whether their company was an importer of record and, if so, ensure ACE access and banking information are in place now, not after CBP turns the refund system on.
    • map which entries included IEEPA tariffs, identify which are non鈥憀iquidated or still within the 180鈥慸ay protest window, and file protests where appropriate to protect the company鈥檚 rights.
    • inventory all tariff鈥憇haring arrangements with suppliers, assess contractual entitlement to pass鈥憈hrough refunds, and align with procurement and legal teams on a consistent recovery approach.
    • work with accounting to determine the financial statement treatment of potential refunds, including whether and when to recognize contingent assets or income and any knock鈥憃n effects for transfer pricing and valuation.

If tax departments wait for complete certainty from the courts before acting, many entries may go final and fall out of scope. The opportunity for tariff refunds will favor companies that are data鈥憆eady, cross鈥慺unctionally aligned, and willing to move under time pressure.

You can find out more about the changing tariff situation here

• • • Changing the balance of taxes 鈥� Budget鈥慸riven tax swaps and incentive reforms are changing the balance between income, property, and sales taxes, forcing large companies to revisit their multistate footprint.

    • How revenue is sourced is changing, too 鈥� Rapidly evolving digital and AI鈥憆elated taxes are creating new nexus, sourcing, and base鈥慸efinition issues for businesses that rely on revenue from digital advertising, social platforms, data monetization, and automated tools.

    • Planning amid continued uncertainty 鈥� New federal tax regulations, tariff鈥憆elated uncertainty, and even the elimination of the penny are all amplifying state鈥慴y鈥憇tate complexity for in鈥慼ouse tax departments.

WASHINGTON, DC 鈥� Tax industry experts who gathered at to provide updates on the current landscape of state and local tax (SALT) policy and offer insight that corporate tax departments should consider found, not surprisingly, that they had a lot to talk about in the current economic environment.

Mapping the new SALT frontier

For starters, this year鈥檚 SALT agenda is not just an abstract policy story for large, multistate businesses, rather, it鈥檚 a direct driver of cash taxes, effective tax rate (ETR) volatility, and audit exposure. Indeed, several state legislatures are advancing new taxes on digital advertising and data, revisiting incentives and data center exemptions, and using conformity to federal law 鈥� especially the tax provisions in the One Big Beautiful Bill Act (OBBBA) 鈥� as a policy lever, all against the backdrop of slowing revenues and contentious elections.

鈥淭ax swaps鈥� and incentives 鈥� States that are facing budget pressure are, unsurprisingly, looking at tax swaps to reduce income or property taxes while broadening the sales & use tax base and trimming exemptions. For example, on March 3, the state of Florida 鈥� which already doesn鈥檛 have a state income tax 鈥� passed legislation that in the state.

Moreover, with the rapid expansion of AI come the extensive need for data centers. Several states are reassessing data center exemptions and credits, either tightening qualification standards, requiring centers to supply more of their own power, or repealing incentives outright. A decision in Virginia to , for example, is viewed as a potential template for other states, particularly in those areas in which energy and environmental concerns are priorities. At the same time, proposals targeting include expanded corporate tax disclosures, CEO compensation surcharges, and enhanced reporting on apportionment and group filing methods.

What companies should consider 鈥� Large companies operating over multiple states should consider making an inventory of their credits and incentives by jurisdiction, including looking at sunset dates and political risk indicators.

Companies should also build forward鈥憀ooking models that show how any sales tax base expansion would interact with their supply chain and their procurement of digital and professional services.

New exposure for tech, marketing & data

Bipartisan legislators in several states are continuing to expand on digital economies as a revenue and policy target. For example, Maryland continues to lead with its digital advertising tax; while Washington state鈥檚 expansion of its sales tax to include certain digital and IT services and Chicago鈥檚 social media taxes illustrate the variety of approaches that state and local jurisdictions are exploring to expand their tax base and raise revenue.

Data and 鈥渄igital resource鈥� taxes 鈥� Proposals in states such as New York would tax companies that derive income from resident data, treating data as a natural resource. While no state has fully implemented a comprehensive data tax, however, large platforms and data鈥慸riven enterprises are monitoring these bills closely.

AI鈥憆elated SALT rules 鈥� Many states still classify AI solutions under existing Software as a Service (SaaS) or data鈥憄rocessing categories, but some 鈥� including New York 鈥� are exploring surcharges tied to AI鈥慸riven workforce reductions. And at least two states are explicitly taxing AI, similarly to the way software is taxed.

For corporate tax leaders, some practical next steps should include mapping those areas in which your group has digital ad spending, user bases, data monetization, or AI deployments. Then, overlaying that with current and pending digital tax proposals. In parallel, it is increasingly critical for the tax team to partner with IT and marketing teams to understand how contracts, invoicing structures, and platform design will affect nexus, tax base definition, and sourcing.

Federal shifts magnify multistate complexity

The OBBBA made permanent several of , while expanding SALT relief on the individual side and creating new interactions for multinational groups. Because most states start from federal taxable income 鈥� either on a rolling, static, or selective conformity basis 鈥� OBBBA changes reverberate across state corporate income tax bases, especially in those states that have decoupled themselves from interest limits, R&D expensing, or new production鈥憆elated incentives.

Corporate tax departments must now juggle different conformity dates and selective decoupling rules across rolling and static states, including jurisdictions that automatically decouple when a federal change exceeds a revenue impact threshold. This requires more granular state鈥慴y鈥憇tate modeling of OBBBA impacts on apportionable income, deferred tax balances, and cash tax forecasts. It also heightens the risk that political disputes 鈥� such as 鈥� produce mid鈥慶ycle changes that complicate provision and compliance processes.

Penny elimination 鈥� With federal , states now are moving toward symmetrical rounding for cash transactions, rounding the final tax鈥慽nclusive total to the nearest five cents while attempting not to alter the underlying tax computation. For retailers and consumer鈥慺acing enterprises, this shifts the focus to point of sale (POS) configuration, consumer鈥憄rotection exposure, and class鈥慳ction risk if rounding is implemented incorrectly.

Tariffs and refunds 鈥� The U.S. Supreme Court鈥檚 Learning Resources, Inc. v. Trump decision under the International Emergency Economic Powers Act in February leaves open how more than $100 billion in and what that means for prior sales & use tax treatment. Streamlined guidance generally treats tariffs embedded in product prices as part of the taxable sales price but excludes tariffs paid directly by a consumer鈥慽mporter from the tax base, raising complex questions if tariff refunds reduce costs or sales prices retroactively.

For indirect tax department teams, the confluency of the 2026 SALT changes 鈥� including the impacts around everything from data center credits to the recent Supreme Court tariff decision 鈥� the need to rely on internal partners across the business has never been stronger. Combining that with a greater reliance on technologies, including dedicated research tools to stay abreast of state-by-state tax changes, may be the best way for corporate tax teams to keep up with compliance requirements and avoid penalties.

You can download a full copy of here