Catalano, Caboor & Co.
Tax Alerts
IRS-CI Annual Report Highlights Significant Increase in Financial Crime Detection for FY25 (IR 2025-120)
IRS Criminal Investigation released its Fiscal Year 2025 Annual Report highlighting significant gains in identifying global financial crime. The agency reported a substantial increase in investigative...
IRS Criminal Investigation released its Fiscal Year 2025 Annual Report highlighting significant gains in identifying global financial crime. The agency reported a substantial increase in investigative...
IRS Seeks Public Comment on Proposed Voluntary Disclosure Practice Updates (IR 2025-124)
The IRS opened a 90-day public comment period to seek input on proposed updates to its Voluntary Disclosure Practice intended to simplify compliance requirements and standardize penalties. The proposa...
The IRS opened a 90-day public comment period to seek input on proposed updates to its Voluntary Disclosure Practice intended to simplify compliance requirements and standardize penalties. The proposa...
Information Letters Released by IRS (INFO 2025-0006—2025-0008)
IRS information letters have been released by the IRS National Office in response to a request for general information by taxpayers or by government officials on behalf of constituents or on their own...
IRS information letters have been released by the IRS National Office in response to a request for general information by taxpayers or by government officials on behalf of constituents or on their own...
Applicable Dollar Amount for Health Insurance Plan Fees Announced (Notice 2025-61)
The IRS has announced that the applicable dollar amount used to calculate the fees imposed by Code Secs. 4375 and 4376 for policy and plan years that end on or after October 1, 2025, and before Oc...
The IRS has announced that the applicable dollar amount used to calculate the fees imposed by Code Secs. 4375 and 4376 for policy and plan years that end on or after October 1, 2025, and before Oc...
Partnership Claimed Deduction for Wrong Year, Penalties Imposed (Corning Place Ohio LLC., CA-6)
A partnership (taxpayer) was denied a deduction for an easement donation related to a property (P1). The taxpayer claimed the deduction for the wrong year. Additionally, the taxpayer (1) substantially...
A partnership (taxpayer) was denied a deduction for an easement donation related to a property (P1). The taxpayer claimed the deduction for the wrong year. Additionally, the taxpayer (1) substantially...
AL - Machine rate applies to propane, oxygen used to process metal
The Alabama Tax Tribunal held that a scrap metal company's purchases of propane and oxygen qualified for the reduced machine rate under Alabama law, as the gases were used to process large metal piece...
The Alabama Tax Tribunal held that a scrap metal company's purchases of propane and oxygen qualified for the reduced machine rate under Alabama law, as the gases were used to process large metal piece...
AK - Integrated transmission systems legislation enacted
Alaska has enacted legislation creating new energy incentives by extending tax-exempt statutes to independent power producers. An electricity generation facility or electricity storage facility that i...
Alaska has enacted legislation creating new energy incentives by extending tax-exempt statutes to independent power producers. An electricity generation facility or electricity storage facility that i...
AZ - Local tax rate table released
Arizona's Department of Revenue released the transaction privilege tax (TPT) rate chart effective January 1, 2026. There are noted changes for previously announced tax rates changes for Holbrook, Phoe...
Arizona's Department of Revenue released the transaction privilege tax (TPT) rate chart effective January 1, 2026. There are noted changes for previously announced tax rates changes for Holbrook, Phoe...
AR - Agricultural federal relief payments are exempt
Arkansas Governor, Sarah Huckabee Sanders, announced that payments received by farmers from the Emergency Commodity Assistance Program (ECAP) are exempt from state income tax for tax years beginning J...
Arkansas Governor, Sarah Huckabee Sanders, announced that payments received by farmers from the Emergency Commodity Assistance Program (ECAP) are exempt from state income tax for tax years beginning J...
CA - Low-income housing tax credit regulation changes adopted
The California Tax Credit Allocation Committee adopted changes to its low-income housing tax credit regulations. The changes relate to definitions, reservations of tax credits, set-asides, eligibility...
The California Tax Credit Allocation Committee adopted changes to its low-income housing tax credit regulations. The changes relate to definitions, reservations of tax credits, set-asides, eligibility...
CO - Changes to tax rates effective from January 1, 2026
The Colorado Department of Revenue announced changes to sales and use tax rates for various jurisdictions, effective January 1, 2026.State Tax ChangesThe state sales and use tax rate remains at 2.9% w...
The Colorado Department of Revenue announced changes to sales and use tax rates for various jurisdictions, effective January 1, 2026.State Tax ChangesThe state sales and use tax rate remains at 2.9% w...
CT - 2026 guidance issued on withholding requirements
Updated guidance is issued, effective for calendar year 2026, regarding Connecticut personal income tax withholding requirements for individuals. The Connecticut Department of Revenue Services advises...
Updated guidance is issued, effective for calendar year 2026, regarding Connecticut personal income tax withholding requirements for individuals. The Connecticut Department of Revenue Services advises...
DE - Guidance issued on OBBBA decoupling
Delaware issued guidance on corporate and personal income tax changes decoupling from parts of the federal One Big Beautiful Bill Act (OBBBA). For businesses taxed as corporations, the state decoupled...
Delaware issued guidance on corporate and personal income tax changes decoupling from parts of the federal One Big Beautiful Bill Act (OBBBA). For businesses taxed as corporations, the state decoupled...
FL - Dealers must continue to calculate sales tax on sales price after end of penny production
Dealers must continue to calculate Florida sales tax and any applicable discretionary sales surtax (local sales tax) under current state law regardless of the customer's method of payment, after the U...
Dealers must continue to calculate Florida sales tax and any applicable discretionary sales surtax (local sales tax) under current state law regardless of the customer's method of payment, after the U...
GA - Updated chart of local sales and use tax rate history issued
The Georgia Department of Revenue published a local sales and use tax history that provides local tax by jurisdiction and tax type from 1972 forward, including rates effective January 1, 2026. Local ...
The Georgia Department of Revenue published a local sales and use tax history that provides local tax by jurisdiction and tax type from 1972 forward, including rates effective January 1, 2026. Local ...
HI - Court declines to halt implementation of new tax on cruise ship accommodations
The U.S. District Court for the District of Hawaii denied preliminary injunctions sought by cruise ship operators, local businesses, and the federal government to prevent enforcement of Hawaii's trans...
The U.S. District Court for the District of Hawaii denied preliminary injunctions sought by cruise ship operators, local businesses, and the federal government to prevent enforcement of Hawaii's trans...
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...
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...
IL - Pass through entity guidance updated
Illinois updated an income tax publication that provides comprehensive guidance on the tax obligations involving distributions from partnerships, S corporations, fiduciaries, and other pass-through en...
Illinois updated an income tax publication that provides comprehensive guidance on the tax obligations involving distributions from partnerships, S corporations, fiduciaries, and other pass-through en...
IN - January 2026 gasoline use tax rate announced
The Indiana gasoline use tax rate for the month of January 2026, is $0.154 per gallon. Departmental Notice #2, Indiana Department of Revenue, January 2026...
The Indiana gasoline use tax rate for the month of January 2026, is $0.154 per gallon. Departmental Notice #2, Indiana Department of Revenue, January 2026...
IA - Rules related to BIG program adopted
The Iowa Economic Development Authority has adopted a new Iowa Administrative Code Chapter 69, “Business Incentives for Growth (BIG) Program.” The new chapter describes the policies and procedures...
The Iowa Economic Development Authority has adopted a new Iowa Administrative Code Chapter 69, “Business Incentives for Growth (BIG) Program.” The new chapter describes the policies and procedures...
KS - Local transient guest tax rate changes announced
Kansas announced local transient guest tax rate changes for the third quarter of 2025. Effective beginning January 1, 2026, the transient guest tax rate is:8% in the City of Lawrence; and9% in the cit...
Kansas announced local transient guest tax rate changes for the third quarter of 2025. Effective beginning January 1, 2026, the transient guest tax rate is:8% in the City of Lawrence; and9% in the cit...
KY - Rent-to-own household goods not exempt
Rent-to-own household goods were not exempt from property taxation under the Kentucky Constitution because the customers did not own the goods. The household goods exemption in the constitution requir...
Rent-to-own household goods were not exempt from property taxation under the Kentucky Constitution because the customers did not own the goods. The household goods exemption in the constitution requir...
LA - Motion picture production tax credit emergency rules extended
The Louisiana Office of Economic Development has extended emergency rules for the motion picture production tax credit against corporate and personal income taxes. The emergency rules, originally effe...
The Louisiana Office of Economic Development has extended emergency rules for the motion picture production tax credit against corporate and personal income taxes. The emergency rules, originally effe...
ME - Bulletin on sales and use for vehicle dealers updated
The Maine Revenue Services has issued an instructional bulletin for vehicle dealers, providing them instructions related to sales and leases of motor vehicles, snowmobiles, all-terrain vehicles (ATVs)...
The Maine Revenue Services has issued an instructional bulletin for vehicle dealers, providing them instructions related to sales and leases of motor vehicles, snowmobiles, all-terrain vehicles (ATVs)...
MD - Legislative changes to rates, deductions summarized
The Maryland Comptroller has issued a Tax Alert summarizing personal income tax rate and standard deduction amount changes made during the 2025 legislative session.Beginning after 2025, the maximum lo...
The Maryland Comptroller has issued a Tax Alert summarizing personal income tax rate and standard deduction amount changes made during the 2025 legislative session.Beginning after 2025, the maximum lo...
MA - Transportation benefit exclusion amounts updated
Massachusetts issued guidance on personal income tax exclusions for employer-provided transportation benefits for taxable years beginning in 2026. Monthly exclusion amounts are capped at $335 for park...
Massachusetts issued guidance on personal income tax exclusions for employer-provided transportation benefits for taxable years beginning in 2026. Monthly exclusion amounts are capped at $335 for park...
MI - Home heating tax credit calculations modified
For purposes of calculating the home heating tax credit, the maximum cost incurred by a claimant for heating fuel is adjusted by the United States Consumer Price Index, rather than the Detroit Consume...
For purposes of calculating the home heating tax credit, the maximum cost incurred by a claimant for heating fuel is adjusted by the United States Consumer Price Index, rather than the Detroit Consume...
MN - Guidance on tax treatment of purchases made with SNAP benefits updated
Minnesota updated its guidance on the sales tax treatment of purchases made with Supplemental Nutrition Assistance Program (SNAP) benefits or the Women, Infants, and Children (WIC) program. Eligible p...
Minnesota updated its guidance on the sales tax treatment of purchases made with Supplemental Nutrition Assistance Program (SNAP) benefits or the Women, Infants, and Children (WIC) program. Eligible p...
MS - Slot machine winnings withholding threshold increased
Mississippi issued guidance on personal income tax withholding for gaming winnings at state gaming establishments. Effective January 1, 2026, the threshold for slot winnings subject to withholding wil...
Mississippi issued guidance on personal income tax withholding for gaming winnings at state gaming establishments. Effective January 1, 2026, the threshold for slot winnings subject to withholding wil...
MO - Taxability of items purchased by a contractor discussed
The Missouri Department of Revenue issued a letter ruling regarding the taxability of Items purchased by a contractor under a lump-sum agreement to construct a real property addition. Specifically, th...
The Missouri Department of Revenue issued a letter ruling regarding the taxability of Items purchased by a contractor under a lump-sum agreement to construct a real property addition. Specifically, th...
MT - Personal property reporting form due date changed
The Montana Department of Revenue has changed the personal property reporting form due date from March 1 to February 15. The Department acknowledged that some taxpayers may view the shortened reportin...
The Montana Department of Revenue has changed the personal property reporting form due date from March 1 to February 15. The Department acknowledged that some taxpayers may view the shortened reportin...
NE - Motor fuels tax rate remains unchanged
The Nebraska Department of Revenue has reminded taxpayers that from January 1, 2026 through June 30, 2026, the motor fuels tax rate remains 31.8 cents per gallon. News Release, Nebraska Department of...
The Nebraska Department of Revenue has reminded taxpayers that from January 1, 2026 through June 30, 2026, the motor fuels tax rate remains 31.8 cents per gallon. News Release, Nebraska Department of...
NV - Tax exemption criteria tightened for nonprofit organizations
Nevada's Department of Taxation has revised the criteria for nonprofit organizations to qualify for sales and use tax exemptions, requiring compliance with enhanced standards. In determining whether a...
Nevada's Department of Taxation has revised the criteria for nonprofit organizations to qualify for sales and use tax exemptions, requiring compliance with enhanced standards. In determining whether a...
NH - Amnesty application steps outlined
New Hampshire has outlined steps that taxpayers must take to apply for the tax amnesty authorized by the New Hampshire Legislature during the 2025 session.Amnesty runs from December 1, 2025, through F...
New Hampshire has outlined steps that taxpayers must take to apply for the tax amnesty authorized by the New Hampshire Legislature during the 2025 session.Amnesty runs from December 1, 2025, through F...
NJ - Assessed interest rate on outstanding balances for 2026 announced
New Jersey issued guidance on the assessed interest rate for outstanding tax balances for the calendar year 2026. Effective January 1, 2026, the interest rate is 10%. The rate is calculated as the pri...
New Jersey issued guidance on the assessed interest rate for outstanding tax balances for the calendar year 2026. Effective January 1, 2026, the interest rate is 10%. The rate is calculated as the pri...
NY - Group not eligible for special QETC rates
A New York appellate court affirmed a decision holding that an affiliated group of companies did not meet the definition of a qualified emerging technology company (QETC) and, accordingly, could not c...
A New York appellate court affirmed a decision holding that an affiliated group of companies did not meet the definition of a qualified emerging technology company (QETC) and, accordingly, could not c...
NC: Guidance issued on weight-based snuff tax, alternative nicotine products tax, and inventory tax
Guidance is issued regarding recently enacted legislation, effective July 1, 2025, that changed the North Carolina excise tax rate methodology for snuff, imposed a new excise tax on alternative nicoti...
Guidance is issued regarding recently enacted legislation, effective July 1, 2025, that changed the North Carolina excise tax rate methodology for snuff, imposed a new excise tax on alternative nicoti...
ND - Guidance issued on exempt organizations
North Dakota issued a guideline on the sales tax treatment of exempt organizations. The guideline addresses sales made to exempt organizations, including government units, Native American tribal gover...
North Dakota issued a guideline on the sales tax treatment of exempt organizations. The guideline addresses sales made to exempt organizations, including government units, Native American tribal gover...
OH - Withholding rate for bonuses and supplemental compensation decreases
Ohio reminds employers that the personal income tax withholding rate for bonuses and supplemental compensation decreases effective January 1, 2026. The withholding rate decreases from 3.5% to 2.75%, a...
Ohio reminds employers that the personal income tax withholding rate for bonuses and supplemental compensation decreases effective January 1, 2026. The withholding rate decreases from 3.5% to 2.75%, a...
OK - Employer’s Withholding Guide Updated
The Oklahoma Tax Commission has released its withholding guide for employers withholding personal income tax from their employees’ wages in 2026. The guide contains general information regarding reg...
The Oklahoma Tax Commission has released its withholding guide for employers withholding personal income tax from their employees’ wages in 2026. The guide contains general information regarding reg...
OR - Oral nicotine products tax begins January 2026
The Oregon Department of Revenue (DOR) is encouraging businesses that distribute and sell oral nicotine products to plan ahead for a new tax that applies to all oral nicotine products sold and distrib...
The Oregon Department of Revenue (DOR) is encouraging businesses that distribute and sell oral nicotine products to plan ahead for a new tax that applies to all oral nicotine products sold and distrib...
PA - Retailer cost percentage increased
Pennsylvania has updated the law regarding cigarette and tobacco sales and licensing. The law amends the presumed cost of doing business for retailers, increasing the rate from 7% to 8.5% starting Mar...
Pennsylvania has updated the law regarding cigarette and tobacco sales and licensing. The law amends the presumed cost of doing business for retailers, increasing the rate from 7% to 8.5% starting Mar...
RI - Division issues notice alerting of decoupling regulations
Rhode Island Division of Taxation alerts taxpayers that emergency regulations went into effect December 15, 2025, providing business corporation and personal income tax guidance for the 2025 tax year ...
Rhode Island Division of Taxation alerts taxpayers that emergency regulations went into effect December 15, 2025, providing business corporation and personal income tax guidance for the 2025 tax year ...
SC - Guidance updated on reduced rate for individuals 85 or older
South Carolina issed a ruling to update its guidance on sales of certain items to individuals 85 years of age or older who are entitled to the 1% state sales and use tax exclusion. The ruling provides...
South Carolina issed a ruling to update its guidance on sales of certain items to individuals 85 years of age or older who are entitled to the 1% state sales and use tax exclusion. The ruling provides...
SD - Guidance issued on use tax for farmers
South Dakota issued guidance on sales and use tax requirements for farmers. The ruling explains the application of state sales or use tax rates, including the 4.2% state tax rate and municipal rates r...
South Dakota issued guidance on sales and use tax requirements for farmers. The ruling explains the application of state sales or use tax rates, including the 4.2% state tax rate and municipal rates r...
TN - Various tax manuals updated
Tennessee released updated versions of a number of its tax manuals, including those outlined below.Business tax. The business tax manual was updated to specify that vapor products fall under Classi...
Tennessee released updated versions of a number of its tax manuals, including those outlined below.Business tax. The business tax manual was updated to specify that vapor products fall under Classi...
TX - Federal conformity policy change
Texas issued guidance on changes to the Texas Comptroller's policy regarding franchise tax conformity with the Internal Revenue Code (IRC), effective for the 2026 franchise tax report. Taxable entitie...
Texas issued guidance on changes to the Texas Comptroller's policy regarding franchise tax conformity with the Internal Revenue Code (IRC), effective for the 2026 franchise tax report. Taxable entitie...
UT - Governor’s budget proposal includes expanding the child tax credit
Utah Gov. Spencer J. Cox released his Fiscal Year 2027 budget proposal that includes:expanding the state child tax credit to provide an additional average benefit of $200 to families with children age...
Utah Gov. Spencer J. Cox released his Fiscal Year 2027 budget proposal that includes:expanding the state child tax credit to provide an additional average benefit of $200 to families with children age...
VT - 2026 withholding tables released
Vermont has released its 2026 income tax withholding instructions, tables, and charts. Among other topics, the instructions discuss how Vermont income tax withholding is calculated, adjustments for se...
Vermont has released its 2026 income tax withholding instructions, tables, and charts. Among other topics, the instructions discuss how Vermont income tax withholding is calculated, adjustments for se...
VA - Interest rates unchanged for first quarter of 2026
The Virginia interest rates for the first quarter of 2026 remain at 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).Taxpayers whose taxable year ends on September 30, 2025...
The Virginia interest rates for the first quarter of 2026 remain at 9% for tax underpayments (assessments) and 9% for tax overpayments (refunds).Taxpayers whose taxable year ends on September 30, 2025...
WA - Governor endorses imposition of Millionaires tax
Washington Governor, Bob Ferguson, has announced support for a millionaires' tax. The tax would be imposed on those making more than $1 million in income in a single year. The $1 million threshold wou...
Washington Governor, Bob Ferguson, has announced support for a millionaires' tax. The tax would be imposed on those making more than $1 million in income in a single year. The $1 million threshold wou...
WV - Average nonfarm payroll wage announced for EOTC
West Virginia announced the annual average nonfarm payroll wage threshold for determining the amount of the Economic Opportunity Tax Credit (EOTC). Eligible taxpayers can claim the EOTC against West V...
West Virginia announced the annual average nonfarm payroll wage threshold for determining the amount of the Economic Opportunity Tax Credit (EOTC). Eligible taxpayers can claim the EOTC against West V...
WI - Questions remain regarding possible arm's-length relationship
The taxpayer appealed a Wisconsin Department of Revenue finding that funds transferred from the sole shareholders to a business were non-deductible returns of capital contributions. The taxpayer argue...
The taxpayer appealed a Wisconsin Department of Revenue finding that funds transferred from the sole shareholders to a business were non-deductible returns of capital contributions. The taxpayer argue...
WY - Tax guidance updated for federal facility deliveries, nicotine pouches
In its quarterly newsletter, the Wyoming Department of Revenue noted that it has changed its position regarding the taxability of tangible personal property delivered to federal facilities. It will no...
In its quarterly newsletter, the Wyoming Department of Revenue noted that it has changed its position regarding the taxability of tangible personal property delivered to federal facilities. It will no...
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