Monthly US Tax Bulletin - September 2026

This edition provides a concise summary of recent key developments in federal and state taxes.

Key highlights:

Federal taxes

• Simplifying IRC §987 rules: The IRS and Treasury have proposed a Controlled Foreign Corporation (CFC) Exemption Election intended to simplify the recognition and reporting of foreign-currency gains and losses arising from qualified business units.
• CFC income allocation: Proposed regulations would replace the last-day ownership rule with an ownership-period approach for allocating Subpart F income, tested income and tested losses.
• Foreign-Derived Deduction Eligible Income (FDDEI) benefits: Proposed IRC §250 regulations would generally exclude income from certain dispositions of intangible and depreciable property from deduction-eligible income.
• Business interest deductions: Updated IRS FAQs reflect OBBBA-related changes to IRC §163(j), including the restoration of EBITDA-based adjusted taxable income and revisions affecting multinational groups.
• Conservation easements: The IRS has established an Office of Conservation Easements and discontinued its uniform settlement initiative in favour of a more case-specific approach.
• Federal tax interest rates: Interest rates on federal tax overpayments and underpayments will remain unchanged for the fourth quarter of 2026.

State taxes

• Indiana: The Indiana Department of Revenue has ruled that fees for certain cloud-based educational and simulated trading services are not subject to state sales tax.
• Connecticut: The Connecticut Department of Revenue will require the amortisation of qualifying research expenditures for the 2025 income year before conforming to the federal immediate-deduction treatment from 2026.
• Pennsylvania: Local sales tax in Philadelphia and Allegheny County will generally be sourced based on the customer’s delivery or service location, with enforcement beginning on 1 October 2026.
• Missouri: Proposed regulations would require registered businesses to file sales and use tax returns even when they have no taxable activity or tax liability for the reporting period.

Monthly US Tax Bulletin - September 2026

The tax and regulatory environment continues to evolve rapidly, with significant developments on both federal and state fronts. To keep you ahead of these developments, we present the September 2026 edition of the Grant Thornton Bharat Monthly US Tax Bulletin.

Download

Learn more about how our US Tax services can help you

Visit the page