Newsletter

Monthly US Tax Bulletin - December 2025

insight featured image
The December 2025 edition of the Grant Thornton Bharat Monthly US Tax Bulletin provides a concise summary of recent key developments in federal and state taxes in the US.

Key highlights:

Federal taxes

  • Businesses with foreign branches and Qualified Business Units (QBUs) must adopt the new Foreign Exchange Exposure Pool (FEEP) method for currency translation, replacing the old “earnings and capital” approach, starting in 2025.
  • The IRS proposes new regulations under the Foreign Investment in Real Property Tax Act (FIRPTA) to eliminate the “look-through” requirement for domestic C corporations when testing the domestic control of Qualified Investment Entities (QIEs), easing compliance and expanding the tax relief for foreign investors.
  • The IRS proposed rules to source borrow fees in securities lending based on the recipient’s residence.
  • The FinCEN has postponed the implementation of its new real estate reporting rule to March 2026, providing additional time for compliance preparation.
  • The IRS launched a two-year Post Appeals Mediation pilot programme for faster dispute resolution.

State taxes

  • Massachusetts: The state revised its corporate tax rules; certain internet-based activities are no longer protected under Public Law 86-272, creating potential income tax nexus for online businesses.
  • Rhode Island: The state is decoupling from the federal provisions under the One Big Beautiful Bill Act; it will maintain its own rules for taxable income and allow limited amortisation relief over future years.
  • Iowa: From 2026, Iowa will tax Net Controlled Foreign Corporation Tested Income (NCTI) and adopt Foreign-Derived Deduction Eligible Income (FDDEI) deduction, replacing Foreign-Derived Intangible Income (FDII) under rolling conformity.
  • Minnesota: The state has issued an updated guidance for digital products, webinars, and non-fungible tokens linked to taxable goods unless they meet specific exemption criteria, are subject to sales and use tax, while accredited online courses remain exempt.
  • New Mexico: All employers must e-file quarterly withholding returns and annual statements starting January 2026.
Monthly US Tax Bulletin - December 2025

Monthly US Tax Bulletin - December 2025

The December 2025 edition of the Grant Thornton Bharat Monthly US Tax Bulletin provides a concise summary of recent key developments in federal and state taxes in the US.

Download
Learn more about how our US Tax services can help you
Visit the page
Learn more about how our US Tax services can help you