Tax Updates

Key differences between U.S. sales and use tax and VAT or GST, covering tax base, services, rates, invoicing, reporting, and cross-border considerations.

International businesses entering or expanding into the U.S. market often underestimate the complexity of sales taxes and tariff planning and compliance. Learn how BDO can help.

Chicago's 2026 revenue ordinance introduces the nation's first social media amusement tax on certain data-collecting platforms and increases the personal property lease transaction tax rate, both effective Jan. 1.

Texas proposed updates to TAC §3.587 would align the margin tax “total revenue” rule with recent law and shift views on fixed-date IRC conformity, favoring federal return line amounts even if 2007 IRC differs.

The Fifth Circuit rejected the Tax Court's “passive investor” view of the SECA exemption for limited partners, adding momentum as similar “limited partner” cases remain pending in the First and Second Circuits.

Congress is weighing new digital asset tax and regulatory reforms, with the draft PARITY Act gaining traction alongside the CLARITY Act. The proposals are still drafts and not yet effective.

Congress is nearing a Jan. 30 funding deadline as the IRS faces major cuts-$1.1B less for FY 2026 plus a proposed $11.6B rescission of remaining IRA enforcement funds.

PLR 202601012 clarifies that recapitalizing a subsidiary and then converting the parent to a partnership can qualify as a downstream C reorganization under Section 368(a)(1)(C).

The IRS extended transition relief for state-paid medical leave benefits in 2026, delaying tax reporting and withholding for employer-funded portions-family leave is excluded.

USPS's new rule clarifies what qualifies as a postmark, how they're applied, and how customers can get mailing evidence-improving understanding without changing practices.

Cayman Islands' updated CRS regulations change registration, reporting, and due diligence

The IRS has extended penalty relief for the 2025 and 2026 calendar years for withholding agents that fail to withhold and report by March 15 on a dividend equivalent payment made with respect to a derivative referencing a partnership.

Virginia Tax Bulletin 25-5 clarifies how a recent court decision affects income apportionment for corporations owning pass-through entities, detailing the aggregate formula used.

See how one company transformed its tax operations by automating data processing across dozens of locations, freeing up resources and streamlining workflows for greater efficiency and scalability.

The OECD's new agreement exempts U.S.-parented MNEs from most Pillar Two GloBE rules starting in 2026, but 2024–2025 compliance and QDMTT obligations remain.

Virginia's Ruling 25-98 updates sales tax rules for software, easing documentation and clarifying taxability for service providers. Learn what's changed.

Congress faces a tight deadline to address government funding before the January 30 expiration, with a temporary extension likely. Proposed IRS funding for FY 2026 is lower than 2025, with the House suggesting $9.5B and Senate Republicans $11.8B. No shutdown threats have been made.

Illinois Gov. JB Pritzker signed S.B. 1911, updating state tax laws to align with OBBBA changes. The law is expected to prevent a $267 million budget gap in 2026.

Companies can reduce tariffs by legally changing a product's country of origin through qualifying manufacturing changes. One propane grill importer saved on tariffs by relocating operations and securing a CBP binding ruling for compliance.

The IRS plans to issue proposed regulations that would set out a rule under which certain borrow fees paid with respect to securities lending transactions and sale-repurchase transactions would be sourced based on the residence of the recipient.